Latest / The PhilStockWorld Investing Podcast / The Trillions at Stake: Trump, Dot Plots, the Dollar's Demise and the Crypto "Hidden Tax"

Transcript

The Trillions at Stake: Trump, Dot Plots, the Dollar's Demise and the Crypto "Hidden Tax" · The PhilStockWorld Investing Podcast

• 0:00
  Dave: You ever stop and think about the money in your pocket? I mean, not just what it used to buy, but what is that buying right now, you know, compared to other currencies? It's something that, well, often just flies under the radar, but it really hits every single one of us. Welcome to the deep dive. Today, we're jumping, headfirst into something really critical, something timely that touches everyone's finances.
• 0:20
  We're talking about the US dollar, defense interest rate moves, and, yeah, the controversial player crypto. Our main source today is a piece called Which Way Wednesday FOMC edition. It's by Phil Davis over at fullstockworld.com. Just published 09/17/2025. And, honestly, this article is a really fantastic example of the kind of sharp, deep financial insight you can find there, stuff that goes way beyond the usual headline.
• 0:44
  So our mission today is to unpack what Phil's describing as kind of hidden taxes and the complex effects rippling through the economy right now.
• 0:49
  Penny: Exactly. And it's so important to remember, this isn't just for, you know, Wall Street types, this is about your buying power. It's about your savings. It's about how much it costs to fill up the tank or buy groceries. Understanding this stuff is, well, it's crucial.
• 1:03
  It directly impacts your life.
• 1:05
  Roy: Okay. Let's kick this off with something pretty alarming from Phil's article right at the start. He notes the dollar lost another 1% just this past week. That 1% might sound small. Right?
• 1:15
  But add it up. It takes the total drop from 110 Mhmm. Back in January. That's when Trump took office down to $96.04 $4.00 now in September. That's a huge 12.36% fall in less than a year.
• 1:28
  Penny: Yeah. 12 plus percent. And that's where Phil Davis brings this really unique angle. He basically says he seems to be the only analyst in America who cares about this. That's a direct quote.
• 1:38
  He's really questioning why no one's challenging President Trump on this massive devaluation, I mean, given the impact.
• 1:44
  Roy: So, okay, if the dollar's weakening like that, what's the article say is driving it? It lays out a pretty clear mechanism. President Trump putting pressure, constant pressure, on Fed Chair Powell to cut interest rates. But how does that translate into such a big drop for the dollar, especially for investors overseas?
• 2:02
  Penny: Right, that's where the dominoes start to fall. When the Fed cuts rates, holding dollar assets just isn't as attractive for foreign investors. The yield, the return they get, it drops. So less reason to hold dollars, they start selling them, buying other currencies instead. And that selling just increases the supply of dollars out there on the global market.
• 2:21
  Roy: And it's not only foreign investors selling off. Right? The article mentions the Fed itself.
• 2:25
  Penny: Exactly. Lower rates also signal the Fed is actively creating more dollars to stimulate the economy.
• 2:32
  Roy: More supply.
• 2:32
  Penny: Basic economics. Yeah. Mhmm. More supply usually means lower prices. Phil puts it pretty bluntly, cutting the rental rate interest and making it less scarce by printing more.
• 2:42
  Well, it makes the dollar worthless. Maybe even, he asks, worthless. It's pure supply and demand, but for our actual currency.
• 2:50
  Roy: And this cycle, the article suggests, it can get pretty nasty.
• 2:54
  Penny: You bet. Lower rates, weaker dollar. That weak dollar makes imports pricier, which fuels inflation.
• 3:01
  Roy: Right.
• 3:01
  Penny: And then that inflation might push the Fed to cut rates again just to help consumers who are struggling with those higher prices, especially if they're deep in debt.
• 3:09
  Roy: So the cycle just keeps going.
• 3:10
  Penny: Keeps going, and the numbers Phil uses are quite stark. His analysis suggests each 1% cut in rates typically leads to about 35% dollar weakness. Wow. So if President Trump gets rates down from where they are now, around 4.37% to maybe 3%, we could be looking at another four to 7% drop in the dollar.
• 3:31
  Roy: On top of the 12% that's already gone.
• 3:33
  Penny: On top of the 12.36% already lost, that's a potential huge hit.
• 3:38
  Roy: And what does that mean for, you know, regular folks?
• 3:40
  Penny: Well, translating that like the article does
• 3:43
  Roy: Yeah.
• 3:43
  Penny: It means your gas, your food, pretty much anything imported could cost, say 15 to 20% more, and at the same time, your savings. They buy 15 to 20% less stuff.
• 3:53
  Roy: That's the hidden tax.
• 3:54
  Penny: That's what the article calls it. Yeah. A hidden tax on every American that almost nobody talks about. It does mention, you know, stocks go up, is great if you own them.
• 4:03
  Roy: But terrible if you don't.
• 4:04
  Penny: Right. Terrible if you don't. It just shows how unevenly these policies can hit.
• 4:09
  Roy: Okay. Now this is where the article really pivots. It gets pretty provocative. It makes this claim that while many Americans are feeling this hidden tax, certain people like President Trump who the article states has 60% of his net worth in cryptocurrencies these days are actually doing just fine.
• 4:29
  Penny: Doing just fine is putting it mildly according to the piece. It claims Trump has made billions this year and because his policies are quote trashing the dollar.
• 4:38
  Roy: That is quite a claim.
• 4:40
  Penny: It is. And what's fascinating is how crypto fits in here. The analysis says it's being treated like a commodity. But as the article points out, it's a commodity you can basically create out of nothing, out of thin air overnight on a laptop. So it immediately makes you question, what is the fundamental value here, especially when traditional money is losing ground?
• 4:59
  Roy: Yeah. The article really hammers home how easy it is to make these things. It says creating a crypto is literally easier than setting up a website.
• 5:06
  Penny: Mhmm.
• 5:07
  Roy: You grab some open source code, change the name, call it Philcoin or, I don't know, dollar destroyer. Like, the article jokes tweak a few settings.
• 5:14
  Penny: And boom. You launch it in under an hour.
• 5:17
  Roy: That easy?
• 5:17
  Penny: Apparently so. And because it's that easy, the scale is just immense. The article states thousands of people do this every day.
• 5:25
  Roy: Wow.
• 5:26
  Penny: Leading to, get this, over 13,000 different cryptocurrencies out there right now. 13,000. The barriers to entry, essentially zero. It's nothing like traditional markets or commodities.
• 5:37
  Roy: Which brings us to a really core argument Phil Davis is making in the piece. He basically says, unlike actual commodities or businesses, these cryptocurrencies, they generate no cash flow, pay no dividends, and produce nothing of value.
• 5:52
  Penny: Right. Their only function, according to him, to be sold to the next person at a higher price.
• 5:57
  Roy: That sounds familiar.
• 5:58
  Penny: It raises that big question about the whole market structure, doesn't it? Yeah. Especially when the article flat out claims the crypto market is fundamentally a massive Ponzi scheme.
• 6:07
  Roy: A Ponzi scheme.
• 6:08
  Penny: That's the term used, suggesting the early folks only get rich if they can convince enough new suckers to buy in at higher prices. The classic playbook, just, you know, digitized.
• 6:19
  Roy: And he gives a specific example. Right? This Trump meme coin.
• 6:22
  Penny: He does. It's quite detailed. Launched around $30 back in January, spiked to $77 just days later.
• 6:29
  Roy: Okay.
• 6:29
  Penny: Then crashed, now trading around $8.50.
• 6:32
  Roy: Ouch. But here's the real kicker according to the article.
• 6:36
  Penny: Yeah. The ownership structure. It states Trump and his family kept 80% of all the coins for themselves.
• 6:41
  Roy: 80%.
• 6:42
  Penny: 80%. Only releasing 20% to the public.
• 6:45
  Roy: So wait. Let's break down those numbers.
• 6:46
  Penny: Okay. The article says there were 1,000,000,000 coins created in total. Trump's companies, it names CIC Digital LLC and Fate Fate Fight LLC control 800,000,000 of those coins.
• 6:58
  Roy: 800,000,000.
• 6:59
  Penny: Or how
• 7:00
  Roy: much then? Even at today's lower price of $8.50, that's roughly $6,800,000,000.
• 7:05
  Penny: 6,800,000,000.0.
• 7:07
  Roy: Meanwhile, the article estimates that out of the 2,000,000 public buyers, over 764,000 of them are underwater. They paid more than it's worth now.
• 7:16
  Penny: So they lost money?
• 7:17
  Roy: A lot of them. Yes. Mhmm. The article calls this the classic insider pump and dump scheme. The promoter keeps most of the product, sells a bit to the, quote, rubes at inflated prices.
• 7:29
  Penny: So if we connect these dots Right. The weakening dollar, the crypto gains, the article is painting a picture of what it calls a grand deception.
• 7:37
  Roy: That's the phrase used. Yeah. Phil Davis argues that Trump profits billions from the very policies that, according to the article, destroy the currency 340,000,000 Americans depend on.
• 7:48
  Penny: And the cost everyone else is huge.
• 7:50
  Roy: Staggering based on his calculation. He estimates Trump's quote deliberate dollar destruction has cost Americans roughly 12,360,000,000,000.00 in lost purchasing power.
• 8:00
  Penny: 12,000,000,000,000. How does he get that number?
• 8:02
  Roy: It's that 12.36% decline applied to an estimated 100,000,000,000,000 in total dollar based assets held by Americans.
• 8:09
  Penny: Now compare that $12,000,000,000,000 loss for the public to Trump's crypto portfolio gain, which the article pegs at approximately $57,000,000,000.
• 8:20
  Roy: So Americans lost trillions. He gained billions.
• 8:23
  Penny: The article claims Americans have collectively lost about 1,000 times more wealth than Trump has gained.
• 8:29
  Roy: Now, again, these are incredibly strong claims Phil Davis is making here.
• 8:33
  Penny: Extremely strong. Article calls this the most brazen conflict of interest in presidential history. It even says there's mathematical proof linking Trump's crypto gains directly to the losses of American dollar holders. Wow. And the author's final point is just stinging, that he's getting rich selling worthless computer code to his own supporters while devaluing the actual money in their bank accounts.
• 8:56
  Roy: It's definitely a very, very pointed critique coming from the source material we're looking at.
• 9:01
  Penny: Absolutely. And we need to be clear, we're reporting what's in the article.
• 9:04
  Roy: Right. So we've gone through the dollar decline, this whole crypto angle, which is fascinating and frankly kind of mind boggling.
• 9:11
  Penny: Yeah.
• 9:11
  Roy: But the title of the piece is FOMC edition. So ultimately a huge part of this story still comes back to the Federal Reserve. Right? Yeah. Especially today.
• 9:21
  Penny: Exactly. Despite all these other dynamics, the Fed is central. And the article points out, the market's pretty much decided what's gonna happen. There's a near certainty, like 96 probability priced in that the Fed will cut rates by 25 basis points this afternoon.
• 9:35
  Roy: Just a quarter point cut.
• 9:36
  Penny: Right. A bigger cut, 50 basis points, that's seen as a tail risk scenario. Possible, but very unlikely.
• 9:43
  Roy: But the article says the cut itself isn't the main event.
• 9:46
  Penny: Not really because it's so expected. The real action, as Phil puts it, isn't the cut itself. It's going to be in Chair Powell's press conference afterwards and in the new summary of economic projections, you know, dots.
• 9:58
  Roy: Ah, the dot plot.
• 9:59
  Penny: Yeah. That's what will signal if this is just a one time tweak or if it's the start of a whole new easing cycle, more cuts to come.
• 10:05
  Roy: And the article also mentions the politics here. Trump trying to influence the Fed's voting members.
• 10:11
  Penny: It does. It notes the potential impact of changing members like Cook and Kugler, adding that Project twenty twenty five strategists don't miss the subtle details. It ties it back to that political pressure.
• 10:23
  Roy: So Powell's really walking a tightrope here.
• 10:25
  Penny: A very fine line. Every rate cut makes US assets less attractive compared to Europe or Asia. Right? That speeds up foreigners selling dollars, putting more downward pressure on the currency.
• 10:36
  Roy: But he can't just say that.
• 10:37
  Penny: The article suggests he can't acknowledge that dynamic not without risking more instability in the financial system. So the prediction is he'll try to talk tough on inflation, try to project confidence to stop the dollar from, you know, outright collapsing.
• 10:53
  Roy: It's a tricky balancing act
• 10:54
  Penny: Mhmm.
• 10:54
  Roy: And the markets are already reacting.
• 10:56
  Penny: Seems like it. Phil Davis points to signals like gold already at record highs and oil creeping back towards $65. He says, the tape is telling us that investors are hedging against Fed induced dollar weakness before the announcement even happens.
• 11:09
  Roy: Okay. This is where the article gets really practical offering that Fed Day playbook. This seems like a key part of the analysis from PhilStockWorld dot com.
• 11:17
  Penny: Absolutely. It's a great feature laying out three distinct scenarios and what they likely mean for different markets. Really useful stuff.
• 11:24
  Roy: So scenario one Yeah. The base case. 96% odds, the article says.
• 11:30
  Penny: Right. That's the 25 basis point cut we expect plus a generally dovish or easy money tone from Powell.
• 11:36
  Roy: Any impact?
• 11:37
  Penny: Dollar weakens more. The DXY index could test 95. Stocks might pop initially, but watch out for a buy the rumor, sell the fact pullback.
• 11:45
  Roy: Okay.
• 11:46
  Penny: Bonds, the yield curve steepens, and gold, crypto, they rip higher as people buy them to hedge against the weaker dollar.
• 11:54
  Roy: And the big picture implication.
• 11:55
  Penny: According to the article Yeah. It accelerates the dollar decline cycle, Phil flagged import inflation comes next. Basically, more the same problems.
• 12:03
  Roy: Got it. What scenario two? The hawkish surprise.
• 12:07
  Penny: Yeah. So still a 25 BPS cut, but Powell sounds more cautious, maybe hints that future cuts aren't guaranteed a dovish fade, they call it.
• 12:14
  Roy: What happens then?
• 12:15
  Penny: Dollar probably stabilizes, maybe even bounces up a bit. Stocks. Likely a knee jerk dip as hopes for lots more easing fade. Short term bond yields might rise. Long term stay steady.
• 12:26
  Roy: And the implication here?
• 12:27
  Penny: Phil suggests this would be Powell trying to slow the dollar slide, but doing so risks spooking the stock market, that balancing act again.
• 12:34
  Roy: Okay. And the last one, the shock and awe. Low odds.
• 12:39
  Penny: Very low odds, but possible. This is a big 50 basis point cut, double the expected amount.
• 12:44
  Roy: Woah. What'd that do?
• 12:46
  Penny: Big flush for the dollar. DXY could break below 95 fast. Stocks might surge right at first, but could reverse hard later as serious inflation fears kick in. Blonds. Rally hard, yields fall across the board.
• 12:58
  And gold, crypto, an explosive move higher. Gold might even test $3,800 an ounce.
• 13:03
  Roy: And a takeaway from that?
• 13:05
  Penny: Clear signal. Fed prioritizes growth jobs over currency stability. In other words, according to the article, dollar destruction in full swing.
• 13:12
  Roy: Wow. Okay. That playbook really lays out the potential paths clearly. It's a lot to take in. What a deep dive this has been.
• 13:19
  We've covered the dollar, the Fed's balancing act, political pressures, crypto, this whole shifting financial landscape. And it's all brought into focus by this detailed analysis in Which Way Wednesday FOMC edition from fullstockworld.com.
• 13:33
  Penny: Absolutely. It really underscores how vital it is to find analysis that goes beyond just the surface level news. The kind of forecasting and frankly unique perspectives that Phil Davis offers here, well, they're invaluable for anyone trying to navigate what's happening. It's exactly this type of in-depth forward looking thinking that helps cut through all the noise. It really shows the value you get from sources like philstockworld.com that offer these detailed, sometimes unconventional takes.
• 13:58
  Roy: So for you listening, what does all this mean? If our own currency's value can swing like this influenced by politics and policy and if, as the article claims, some influential people might actually benefit from that instability through things like crypto, what does that signal about the future? About traditional wealth, about trust in the system, about just, you know, basic economic security for everyday people?
• 14:23
  Penny: Yeah. What's the long term cost of what the article calls this farce playing out on the world stage?
• 14:28
  Roy: Definitely gives you a lot to think about.