Latest / Financial Survival Network / Trump GPT Takes the Fed - Parag Amin #6299

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Trump GPT Takes the Fed - Parag Amin #6299 · Financial Survival Network

0:00
Speaker 1: There's almost no doubt that Pal's going to be out
0:02
Speaker 1: when his time is up, and he's realistically not going
0:07
Speaker 1: to be reappointed. President Trump has really made no secret
0:10
Speaker 1: about that, and I think President Trump would fire him
0:12
Speaker 1: if he could, but he can't. So this is why
0:15
Speaker 1: he's doing what he believes is the next best thing
0:17
Speaker 1: and looking at shadow fed chairs.
0:20
Speaker 2: You are listening to Carrie Leutz's Financial Survival Network, where
0:23
Speaker 2: you get valuable information you just can't find anywhere else
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0:40
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0:47
Speaker 3: And welcome. You are listening to and watching the Financial
0:50
Speaker 3: Survival Network. I'm your host Carrie Lutz. And well, we
0:55
Speaker 3: know there's a big stink that's been going on between
0:58
Speaker 3: the President and chair Jerome Powell. Has he outlived his usefulness?
1:05
Speaker 3: Is he on his way out? What's the real story here? Well,
1:10
Speaker 3: Paragh el Amin is with us now an attorney and
1:15
Speaker 3: well you can find him at lawpla dot com. Parukh
1:20
Speaker 3: great to have you on the show. So you're an attorney,
1:23
Speaker 3: but obviously interested in economics and economic policy here, what's
1:29
Speaker 3: your take on what's going on with the FED?
1:32
Speaker 1: That's right, Kerrie, and I've got a background in finance.
1:34
Speaker 1: I mean, in terms of what's going on in the FED.
1:36
Speaker 1: This is something we've seen which is classic President Trump style,
1:40
Speaker 1: which is he's running the government more like Trump organization
1:44
Speaker 1: then as the president. And what I mean by that
1:47
Speaker 1: is President Trump is very used to having a lot
1:50
Speaker 1: of control over his organization and decision making ability, and
1:54
Speaker 1: I think we've seen time and time again where he
1:56
Speaker 1: gets frustrated when other people aren't doing what he wants
2:01
Speaker 1: them to do. And that's what we're seeing here with
2:04
Speaker 1: Jerome Powell and President Trump hinting at the fact that
2:08
Speaker 1: he may end up appointing a shadow FED chair, which
2:12
Speaker 1: is unprecedented, We've never seen anything like that before, but
2:16
Speaker 1: all because he doesn't really like the fact that Jerome
2:20
Speaker 1: Powell is continuing to allow higher interest rates than President
2:25
Speaker 1: Trump would like.
2:26
Speaker 3: Right. So I have a theory that this is the
2:29
Speaker 3: first AI driven administration in history. All the policies coming down,
2:35
Speaker 3: whether it's immigration, legal policies, economic, it's all driven by AI.
2:41
Speaker 3: And if in fact it is what do you think
2:45
Speaker 3: the AI is pointing to in terms of monetary policy.
2:50
Speaker 1: Well, that's an interesting theory. I haven't heard that before, Carrie.
2:54
Speaker 1: So to clarify what you're saying and asking, are you
2:58
Speaker 1: saying that you believe that the Trump administration is using
3:02
Speaker 1: literally AI to help come up with its policies.
3:06
Speaker 3: Oh, there's no question in my mind. I call it
3:08
Speaker 3: Trump GPT, and having used AI pretty extensively for the
3:15
Speaker 3: past three years, I can just pick up the patterns
3:17
Speaker 3: and such like. For instance, you know as an attorney
3:21
Speaker 3: that to drift an executive order, it's not just the
3:25
Speaker 3: thing where you just write it out. A lot of research,
3:28
Speaker 3: memorandums have to be done. Every law that's on the
3:31
Speaker 3: books has to be run through to make sure that
3:35
Speaker 3: you're not conflicting with the law, constitutional aspects, all these things,
3:40
Speaker 3: and the fact that he had so many of them
3:43
Speaker 3: literally ready the moment he took his hand off the
3:47
Speaker 3: Bible and was sworn in, he was signing executive orders.
3:52
Speaker 3: And there's two reasons why I know that this is
3:55
Speaker 3: AI driven. Number one is the secrecy he knew about this,
4:00
Speaker 3: which means there's a very small core group that's responsible
4:06
Speaker 3: for this and to have a law firm do it
4:10
Speaker 3: could take months, years, dozens of lawyers running around, running
4:16
Speaker 3: up hours. Not to say that lawyers haven't reviewed it,
4:20
Speaker 3: but that the core of it probably is AI generated.
4:24
Speaker 3: And then just pattern recognition where I can see AI
4:29
Speaker 3: rearing its head, where just certain certain things that happen.
4:34
Speaker 3: It's just a pattern. So it's my theory and nobody
4:38
Speaker 3: has proven me wrong yet. But if I'm wrong, I'm wrong. Yeah.
4:43
Speaker 1: And so you think that President Trump's idea of maybe
4:47
Speaker 1: a shadow fed chair came from AIH.
4:50
Speaker 3: Very possible, or it might have come from somebody else,
4:54
Speaker 3: and then run through the AI to see if it
4:57
Speaker 3: could in fact be accomplished, and you know it'll run
5:03
Speaker 3: itself out. I know for sure for legal strategy, it's happening.
5:07
Speaker 3: I can see it there. We've never seen cases go
5:12
Speaker 3: to the Supreme Court. He's only been in power five
5:16
Speaker 3: months and yet three or four cases have already hit
5:20
Speaker 3: the Supreme Court and been decided. And that's just something.
5:25
Speaker 3: As a follower, as an attorney, recovering attorney, I've never
5:29
Speaker 3: seen anything like where Supreme Court taking cases on an
5:33
Speaker 3: emergency basis the way they have.
5:36
Speaker 1: That's right, And look part of this is traditional Trump fashion.
5:42
Speaker 1: President Trump likes to move quickly and he makes a
5:45
Speaker 1: lot of moves at any given time, so a lot
5:47
Speaker 1: of his presidency has a lot of unprecedented moves, including
5:52
Speaker 1: the potential appointment of a shadow FED chair before Jerome
5:57
Speaker 1: Powell's appointment is up May in May twenty twenty six.
6:02
Speaker 1: But look, the reality is that President Trumps hasn't made
6:06
Speaker 1: it a secret that he is frustrated at your own
6:09
Speaker 1: Powell being slow to lower the interest rates. And look,
6:13
Speaker 1: something to keep in mind is the Fed has a
6:15
Speaker 1: tough job to balance between economic growth as well as inflation.
6:22
Speaker 1: And as a core component of this employment because the
6:27
Speaker 1: reverse to the challenge is that low interest rates will
6:32
Speaker 1: spur economic growth, which is good. But what happens with
6:35
Speaker 1: economic growth is most of the time it will also
6:38
Speaker 1: lead to inflation. And that's one of the core pieces
6:42
Speaker 1: of the mandate of the Fed is to also control inflation.
6:46
Speaker 1: So many times it becomes very difficult between finding the
6:49
Speaker 1: balance of lower interest rates to spur economic growth, which
6:52
Speaker 1: is something that President Trump has made no secret about
6:55
Speaker 1: the fact that he's an avid supporter of and I
6:58
Speaker 1: think he believes that he wants it to be a
7:00
Speaker 1: core part of his legacy. So it's balancing that while
7:05
Speaker 1: still also tempering inflation. And so President Trump seems to
7:10
Speaker 1: make a lot of decisions from the gut, as he
7:12
Speaker 1: has as a businessman, and Jerome Powell is much more
7:15
Speaker 1: by the books, by the data, and he's very cautious
7:18
Speaker 1: about the moves he makes. And I think that's the
7:21
Speaker 1: dichotomy and the just the position that we're seeing between
7:24
Speaker 1: these two people.
7:25
Speaker 3: Yeah, yeah, for sure, he doesn't have an easy job
7:28
Speaker 3: Jerome Powell, for sure. And the inflation, yes, definitely a factor. Well,
7:37
Speaker 3: what do you think of DOGE though, as far as
7:39
Speaker 3: bringing down the federal deficit and perhaps bringing that under control.
7:47
Speaker 1: Well, I would look to the head of DOGE, which
7:51
Speaker 1: was once Elon Musk and him no longer being involved
7:55
Speaker 1: in DOGE and then simultaneously now criticizing President Trump's latest bill,
8:01
Speaker 1: and he's criticized both sides. And so this is why
8:05
Speaker 1: Elon Musk has said that he wants to form a
8:08
Speaker 1: third party is because the challenge I think Elon Musk
8:12
Speaker 1: is faced and seen firsthand from being involved INDULGE is
8:16
Speaker 1: it's seemingly impossible with the way government is structured to
8:20
Speaker 1: really get the balance or the debt in control and
8:25
Speaker 1: balance because of the way the government spends money in
8:28
Speaker 1: both sides vying for control, in favoritism amongst their lobbyists.
8:35
Speaker 1: And that's the big challenge here, is that everybody is
8:38
Speaker 1: looking to short term rather than looking at what's best
8:42
Speaker 1: for the long term future of America.
8:45
Speaker 3: Yeah, and you know, interest rates, well, they might be
8:47
Speaker 3: higher than zero percent where they were a couple of
8:51
Speaker 3: years ago, are probably right around where they should be
8:55
Speaker 3: on a normalized basis prior to the Great Financial Crisis
9:01
Speaker 3: which set off all these negative interest rates. You don't
9:05
Speaker 3: really want negative interest rates, negative real interest rates. It's
9:09
Speaker 3: unhealthy for the economy. And somebody's got to buy these treasuries, right,
9:16
Speaker 3: That's right.
9:17
Speaker 1: And so what a lot of people don't realize is
9:19
Speaker 1: there's the balance between the monetary policy, the buying and
9:23
Speaker 1: selling of bonds to control the money supply in the economy,
9:27
Speaker 1: as well as fiscal policy in terms of how a
9:29
Speaker 1: government is spending money. And ideally those really should be
9:33
Speaker 1: balanced against each other, but typically many times, unfortunately they
9:38
Speaker 1: kind of go their separate ways and each side is
9:42
Speaker 1: kind of doing what they believe is best without necessarily
9:45
Speaker 1: looking at what's best for America as a whole, because look, ultimately,
9:50
Speaker 1: monetary policy and fiscal policy are each wings to a bird,
9:54
Speaker 1: and you need both for the economy to be able
9:57
Speaker 1: to soar. And it is interesting that unfortunately the US government,
10:03
Speaker 1: whether it's under Democratic party rule or Republican Party rule,
10:09
Speaker 1: is still spending far more than it should be and
10:14
Speaker 1: not really accounting for how it's going to reduce the debt,
10:19
Speaker 1: because some amount of debt is good, but an excessive
10:21
Speaker 1: amount of debt is really really bad.
10:23
Speaker 3: Yeah, and all lower interest rates do is increased debt.
10:27
Speaker 3: As we know, you know, there's some interesting cases I
10:30
Speaker 3: think that we'll be coming up this term. First and
10:33
Speaker 3: foremost is the Impoundment Control Act of nineteen seventy four,
10:38
Speaker 3: which basically said that if Congress allocates the money, if
10:43
Speaker 3: they say it's getting spent, then it's getting spent, no
10:47
Speaker 3: matter how absurd the program might be. And that really
10:52
Speaker 3: wasn't the way that the Constitution was designed. Presidents had
10:57
Speaker 3: impoundment authority up until you know, fifty years ago. And
11:03
Speaker 3: now he wants it back, and I believe he's going
11:08
Speaker 3: to get it. I believe the case is coming and
11:11
Speaker 3: it's just it'll probably come up this term in one
11:14
Speaker 3: way or another.
11:15
Speaker 1: That's right carried it. Unfortunately, this use it or lose
11:18
Speaker 1: it type financing with Congress and the allocation of funds
11:21
Speaker 1: is something we typically see throughout the government, and the
11:25
Speaker 1: challenge is balancing the two. For example, I worked for
11:29
Speaker 1: a summer in private consulting where the consulting company did
11:34
Speaker 1: consulting for veterans' affairs, which I'm an avid believer in
11:37
Speaker 1: that we should be taking care of our veterans, caring
11:39
Speaker 1: for war years. And unfortunately, regardless of which department you're in,
11:45
Speaker 1: there is a competitive eating process, and part of it,
11:47
Speaker 1: regardless of which agency it is, they do look at
11:51
Speaker 1: the prior year's budget and whether it was fully allocated,
11:55
Speaker 1: and many times if it wasn't, what will happen is
11:58
Speaker 1: the government will take back that money and reallocate it.
12:01
Speaker 1: So it does create this perverse incentive to spend spend
12:05
Speaker 1: because the challenge and the risk is, for example, let's
12:08
Speaker 1: say you don't necessarily need all those funds this year, Well,
12:12
Speaker 1: if you don't use them, what might happen is if
12:14
Speaker 1: you need them the following year, they might not be
12:17
Speaker 1: available for distribution. And that's the biggest challenge here is
12:21
Speaker 1: that therefore, unfortunately, it fuels this never ending spending cycle,
12:28
Speaker 1: which with each agency trying to max out their budgets
12:31
Speaker 1: year after year.
12:33
Speaker 3: Yeah, and for an example of the absurd things they
12:36
Speaker 3: could do, put this in an article. If Congress decides
12:41
Speaker 3: that they're going to have a tomb for the faceless bureaucrat,
12:49
Speaker 3: all right, like we have the tumb of the unknown soldiers,
12:52
Speaker 3: so we have one with a tumb for the faceless bureaucrat,
12:56
Speaker 3: and they're going to fund it. They're going to have
12:59
Speaker 3: a bond are running twenty four to seven, and the
13:04
Speaker 3: bonfire will be fed with freshly printed one hundred dollars
13:08
Speaker 3: bills from the Federal Reserve. All the president can do
13:12
Speaker 3: under the current state of the law is like the match.
13:16
Speaker 3: He really has no ability to actually rein in this
13:20
Speaker 3: insane spending. And I mean, this is like absurd. You know,
13:24
Speaker 3: they're I don't think they're going to do it, but
13:26
Speaker 3: I wouldn't put it past them because we've seen from
13:30
Speaker 3: Doge the types of insane things they're spending money on.
13:34
Speaker 3: That's right.
13:35
Speaker 1: Well, President Trump is in sort of a unique and
13:39
Speaker 1: special situation, which is where he's the president of the
13:43
Speaker 1: Republican Party, as well as having the Republican Party control
13:48
Speaker 1: both the Senate and the House. So in terms of
13:52
Speaker 1: the best chances of being able to get some sort
13:54
Speaker 1: of cooperation from the two portions and segments of the
14:00
Speaker 1: US Congress, both the Senate and the House of Representatives,
14:03
Speaker 1: President Trump has a unique advantage in being able to
14:06
Speaker 1: do that. And we've still seen the dysfunction that goes
14:10
Speaker 1: on between the executive branch and the legislative branch, including
14:15
Speaker 1: in terms of how policies are supposed to be put
14:19
Speaker 1: forth and how spending is supposed to occur, including with
14:22
Speaker 1: this latest spending bill. With President Trump.
14:24
Speaker 3: Yeah, so, and still getting the Congress to do things,
14:29
Speaker 3: it's like herding cats, that's right.
14:32
Speaker 1: And you know part of this is I've joked with
14:35
Speaker 1: friends that if members of the government were treated the
14:39
Speaker 1: same way as we are in the private sector, which
14:41
Speaker 1: is you're going to get paid and get raises for
14:43
Speaker 1: your results, and if you don't do your job, you're
14:46
Speaker 1: going to get fired, I think we'd have a lot
14:49
Speaker 1: less dysfunction on Capitol Hill and in Washington, DC.
14:54
Speaker 3: And that's probably another case that's coming up in this
14:57
Speaker 3: term that we don't know about yet, but basically the
15:02
Speaker 3: ability to reschedule all these employees under Section F and
15:08
Speaker 3: then get rid of them as needed. You know, the
15:13
Speaker 3: government is seriously out of step with technology, with modern
15:18
Speaker 3: economics and the world for that matter, and he's trying
15:23
Speaker 3: to bring the government up to date here and as expected,
15:29
Speaker 3: getting resistance from all parties.
15:32
Speaker 1: That's right. Unfortunately, what we're saying is the effects of complacency. Unfortunately,
15:37
Speaker 1: many government employees and parts of government have become very
15:41
Speaker 1: complacent with America's place in the world economy. But the
15:44
Speaker 1: reality is they've been gifted that privilege by the people
15:47
Speaker 1: before them who did all the work to make America
15:50
Speaker 1: the great country that it is. And unfortunately, we have
15:52
Speaker 1: a lot of government employees who don't necessarily make it
15:57
Speaker 1: their job to look at the advancement of the United States,
16:03
Speaker 1: including things like AI, which is going to be a
16:05
Speaker 1: major part of the future, and understanding it. I mean,
16:09
Speaker 1: we've seen this Carrie with some of the hearings even
16:11
Speaker 1: relating to for example, Facebook or social media, where the
16:16
Speaker 1: questions from the various senators re laughable in terms of
16:19
Speaker 1: the types of questions they were asking shown showed a fundamental,
16:24
Speaker 1: in complete misunderstanding as to how technology works, how social
16:28
Speaker 1: media platforms work, and what they're able to do. And
16:32
Speaker 1: it's not just the social media hearings. Anytime we have
16:34
Speaker 1: a hearing relating to technology, we see this over and
16:39
Speaker 1: over again, where we have congress people, government employees who
16:43
Speaker 1: don't understand fundamentally most parts of the technology, if any
16:48
Speaker 1: part of the technology.
16:50
Speaker 3: Yeah, well they think they still think email and texting
16:53
Speaker 3: are major innovations, and we're way past that now. But
16:58
Speaker 3: the AI doge forget about the optics of musk leaving
17:05
Speaker 3: and all that. That is a permanent fixture now of
17:10
Speaker 3: the government, and I think we're going to see it
17:12
Speaker 3: spread to state and local governments as well, and internationally
17:18
Speaker 3: to the UN and countries around the world, because every
17:22
Speaker 3: country is basically the way they spend is modeled after
17:26
Speaker 3: the US to some extent. They're all running deficits, They've
17:31
Speaker 3: all over promised and at some point they're going to
17:34
Speaker 3: have to underdeliver and there's really no way out. The
17:38
Speaker 3: only thing that can kind of contain this is AI.
17:43
Speaker 1: Well, that's right, and unfortunately, many times government is a
17:46
Speaker 1: repeated series of under delivery, and unfortunately, what happens is
17:51
Speaker 1: politicians then just point the fingers at each other and
17:54
Speaker 1: don't take full responsibility for what happened or try to
17:58
Speaker 1: fix it, so unfortunately becomes a blame game. So the
18:03
Speaker 1: reality is, if US households ran their budgets the way
18:08
Speaker 1: the US government is currently running their budgets, regardless of
18:14
Speaker 1: whether it's Republican or Democrat controlled, the reality is you
18:18
Speaker 1: cannot run a household even if you drop a bunch
18:23
Speaker 1: of the numbers and reduce them to ones that we
18:26
Speaker 1: could all make sense of. For example, if we've got
18:29
Speaker 1: a median household income of let's say sixty thousand dollars
18:33
Speaker 1: and allocating those funds between groceries, insurance taxes, food, those
18:41
Speaker 1: various things, you would be running an astronomical deficit to
18:46
Speaker 1: the point where you'd never be able to pay it off.
18:49
Speaker 1: And unfortunately, because the numbers with the US deficit and
18:53
Speaker 1: the budget are so large, it makes it very difficult
18:56
Speaker 1: to really understand that. But I saw this one calculation
18:58
Speaker 1: where if you look at those numbers and simply drop
19:01
Speaker 1: off a bunch of the zeros, the vast majority of
19:03
Speaker 1: those zeros, and make it into numbers that somebody can
19:06
Speaker 1: actually understand and they're used to seeing. You'll see very
19:10
Speaker 1: quickly how problematic this is in terms of actually being
19:14
Speaker 1: able to pay it off.
19:15
Speaker 3: Yeah, I couldn't agree with you more. So, what do
19:18
Speaker 3: you think will be the net outcome? You think Powell
19:20
Speaker 3: is out?
19:21
Speaker 1: Well, I think that there's almost no doubt that Palell's
19:24
Speaker 1: going to be out when his time is up, and
19:28
Speaker 1: he's realistically not going to be reappointed. President Trump has
19:32
Speaker 1: really made no secret about that, and I think President
19:34
Speaker 1: Trump would fire him if he could, but he can't.
19:36
Speaker 1: So this is why he's doing what he believes is
19:39
Speaker 1: the next best thing and looking at shadow fed chairs
19:42
Speaker 1: to be able to say, here's my next fedchair pick.
19:46
Speaker 3: All right, well we're gonna sit back, wait and see
19:50
Speaker 3: what happens. Just tell us again, how we connect with
19:52
Speaker 3: you on the web, how we find out more about you?
19:55
Speaker 1: He garry yes, on Instagram, on parrague pa r A
19:59
Speaker 1: g A, meme A, M I n E s Q.
20:02
Speaker 1: And on the web. My website is www dot law
20:06
Speaker 1: p l A dot com. Again, that's www dot law
20:10
Speaker 1: PLA dot com.
20:11
Speaker 3: And the links in the show notes to this interview
20:13
Speaker 3: on financial Survival Network dot com. Go click it and
20:17
Speaker 3: we just ask if you go there, please sign up
20:19
Speaker 3: for your free newsletter, got one coming out shortly and
20:23
Speaker 3: if you've got a question, comment for myself or Parague,
20:27
Speaker 3: or just tell us what you think of this. Do
20:29
Speaker 3: you think it's time for Powell to go? Just shoot
20:32
Speaker 3: me an email, klatcarrieluts dot com. Parag been a pleasure,
20:37
Speaker 3: Thanks for stopping by.
20:38
Speaker 2: Thank you, Kerry, thanks for listening to Carrie Lets's Financial
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