Welcome back everyone, long time no see.
I am Cass PNC. I am joined as usual by my
partner in crime, Mr. Bennett Tomlin.
How are you today? I'm doing OK, a little scared
but hanging in there. How are you doing, Cass?
Same, same. We decided it was a good idea to
do a live stream today because, yeah, what the hell, What the
hell? And we're just going to kick it
off by showing you the statement from Jerome Powell.
So yeah. Good evening.
On Friday, the Department of Justice served the Federal
Reserve with grand jury subpoenas threatening a criminal
indictment related to my testimony before the Senate
Banking Committee last June. That testimony concerned, in
part, a multi year project to renovate historic Federal
Reserve office buildings. I have deep respect for the rule
of law and for accountability in our democracy.
No one, certainly not the Chair of the Federal Reserve, is above
the law. But this unprecedented action
should be seen in the broader context of the Administration's
threats and ongoing pressure. This new threat is not about my
testimony last June or about the renovation of the Federal
Reserve buildings. It is not about Congress's
oversight role. The feds, through testimony and
other public disclosures, made every effort to keep Congress
informed about the renovation project.
Those are pretexts. The threat of criminal charges
is a consequence of the Federal Reserve setting interest rates
based on our best assessment of what will serve the public,
rather than following the preferences of the president.
This is about whether the Fed will be able to continue to set
interest rates based on evidence and economic conditions, or
whether instead monetary policy will be directed by political
pressure or intimidation. I have served at the Federal
Reserve under 4 administrations, Republicans and Democrats alike.
In every case, I have carried out my duties without political
fear or favor, focused solely on our mandate of price stability
and maximum employment. Public service sometimes
requires standing firm in the face of threats.
I will continue to do the job the Senate confirmed me to do,
with integrity and a commitment to serving the American people.
Thank you. So no Federal Reserve Chairman
has ever had to make a statement like that before.
Yeah, I just point something out to anyone who was listening to
that, he said. Threat or threatening five times
in that very short speech. And he said intimidation as
well. So that gives you a sense of the
message that he was trying to get across.
And I think he got that message across quite effectively.
I think people, at least in finance and politics, I guess as
well, we're quite freaked out by all of this.
I, I don't know if you want to add anything, but I think the,
the one thing I want to add to this right now at this very
particular second is that this morning, in response to this,
Senator Tillis and Senator Murkowski both put out
statements saying, hey, this is not OK.
You cannot go after Jerome Powell like this.
And we are going to hold up any nomination that you put forward
until this stops. And we urge you to investigate
the DOJ. So I think that really sets back
the momentum that maybe Donald Trump in this administration
thought they had on this this issue.
I don't know. What do you think, Bennett?
I think it would have been great if Tillis and Murkowski were
willing to make those statements after Lisa Cook was targeted by
criminal indictments by the OR was was targeted with criminal
investigations and where Trump tried to fire her.
Because a lot of those same things they're saying now about
Powell applied in that case as well.
But more broadly, whatever like you want to say about when they
should have said it. This is one of those critical
moments. And during this administration,
I think half of the episodes we've done, it feels like have
been about these attacks on the Federal Reserve because it is
such an important institution and it has for so long been seen
as independent from some of these political processes and
especially from like the day-to-day vagaries of the
executive. And that seems to have, that
seems to be crumbling and like even more than that, it seems
like when it started to crumble when we were raising this alarm
months ago. Almost a year.
Yeah, 11 months ago. People close to the
administration were confident that they were going to be able
to redirect Trump to keep him focused on other issues and
things like that. And based on, like the reporting
about Scott Besson, like calling Trump up today or meeting with
Trump today and freaking out and stuff like that, it suggests
that, one, a lot of people didn't know that this was about
to happen. And two, they were unsuccessful
in distracting Trump from what Trump said he was going to do.
Well, that that, and I think someone else pointed out that in
that was it called the 2025, the Project 2025 thing or whatever
that they specifically called for getting complete control and
essentially destroying the independence and usefulness of
the Federal Reserve. So they are doing exactly what
they said they were going to do. And there is nobody who is
successfully going to stop them from doing that.
And I don't think, as I said earlier today, I don't think
that Scott Besant calling Donald Trump and being like, I'm really
disappointed in you is going to have any effect whatsoever on
this administration. So you know that, that it's,
it's a silly, it's a silly retort.
I also want to bring up, sorry, we, we forgot to do this.
So the, there was also a joint statement from Ben Bernanke,
Jared Burns. I guess I should Ben Bernanke,
who served 2 terms as the chair of the Board of Governors of the
Fed. Jared Bernstein, who served as
the chair of the Council of Economic Advisers under Joe
Biden. Jason Furman served as chair of
the Council of Economic Advisers under Barack Obama.
Tim Geithner, the 75th Secretary of the Treasury and the
president and CEO of the Federal Reserve Bank of New York.
Alan Greenspan, who served 5 terms as the chair of the Board
of Governors of the Fed. He's 99 years old.
Apparently he is still going ahead and talking to these
people about this stuff. Janet Yellen, who served as the
78th Secretary of Treasury and had numerous titles at the Fed,
and Henry M Paulson, who was the 74 secretary of the Treasury.
Basically a who's who of people who have worked in the Treasury
and the Federal Reserve all saying.
Every living Fed chair, I believe, is a signatory to this
statement. And we should be clear like
we'll just read the statement. It's a couple of sentences.
So there's all these signatories.
And it says the Federal Reserve's independence and the
public's perception of that independence are critical for
economic performance, including achieving the goals Congress has
set for the Federal Reserve of stable prices, maximum
employment and moderate long term interest rates.
The reported criminal inquiry into Federal Reserve Chair Jay
Powell is an unprecedented attempt to use prosecutorial
attacks to undermine that independence.
This is how monetary policy is made in emerging markets with
weak institutions with highly negative consequences for
inflation and the functioning of their economies more broadly.
It has no place in the United States, whose greatest strength
is the rule of law, which is at the foundation of our economic
success. Pretty damning stuff.
So look, I know a lot of our listeners are anti Fed and I
know a lot of our listeners are anti central bank in general
probably. I just want to make sure
everyone understands that this is a dual decision.
Either you have central bank independence with a Federal
Reserve that doesn't get persecuted for the decisions
that they make or you don't. And that's that's it.
That's the choice you have right now.
And while I would love to, I know we had Rohan Grey on
multiple times and you know, no love lost from Rohan for the
Fed. I know that and I know that he's
likely just looking at this and just shaking his head like these
idiots. They had every opportunity to
fix this for decades and they didn't do it.
I urge everyone to listen to those episodes as well.
They're very informative and interesting, but I, I just need
people to understand that this is, it's a dual choice right
now. You don't, there is not this
third grader idea where we can be like, well, so we're going to
slowly move away from the Fed and do this other central bank
like, no, that's not a thing. So we are in the midst of chaos.
I mean, this is complete and utter chaos.
Well, and in so far as like that could be a thing, like there are
alternative conceptions of like central bank independence that
you'll encounter in like modern monetary theory and things like
that. But all of those involve like
the legislative branch branch Congress having like complete
control over the purse, like absolute control over the purse.
And we've seen that Congress no longer really has the power of
the purse. And so discussing that right now
is missing the point that like Donald Trump is specifically
attacking like the dollar in these under these financial
institutions that underpin the United States and for like the
world's dumbest pretext, right? Like this entire thing is
because the Federal Reserve decided they needed to do some
renovations across like 12 of their different banks or
whatever. And they've made a bunch of
those changes. They disclosed all of it to
Congress at the appropriate times with the appropriate
reports. Everything was approved by all
the appropriate people at all the appropriate times.
Powell went to the Senate Banking Committee to testify
about all this. And yet despite, despite like
Powell said, all that openness about these things, that
willingness to engage with the congressional oversight of the
Fed, they are still trying to find something he misrepresented
in that testimony. Like it's fundamental nonsense,
right? It's they're doing renovations
like the East Wing, the ballroom, that Coinbase can fund
the East Wing. But like this is not OK.
I think this is a really important point that someone
else, a mutual of ours, Jen on blue sky pointed out, which is
if Trump really wants to go down the road of exploring every
renovation overrun and construction overrun cost like
you're you were going to find a lot of skeletons in that closet
for Donald Trump. So if he really wants to go down
this path, we should do it. And we should do it for
everything that he had he's involved with from, you know,
the, his hotels to the, the East wing of the, the White House to
whatever, like every, every single thing he touches should
be deeply investigated. And if there's any cost overrun
whatsoever, well, what the hell, man?
That's fraud, right? According according to the
Donald Trump administration, I guess.
But sorry to pause for a second. I just want to also add that
while we have all of this fed drama going on, which is insane
and important and unprecedented, truly unprecedented, we also
have like strange capital control decisions happening
right now, right? We have you pointed it out.
The the was it Besant? Who who was it Besant?
Yeah, Besant talking about, Oh, well, if you have SNAP benefits
or if you have any benefits at all that you received from the
government, you can't do any remittances anymore.
You can't send, you can't wire money abroad anymore.
And this is a crazy decision and it is a crazy capital control
that I don't think there's any justificate like I don't know
what entity is allowed to suddenly do that on a whim
without congressional approval and right like other approval.
Maybe the Fed or the OCC could like in their bank supervisory
role, change the expectations for what's documented with each
wire. But like, doing it in the middle
of an interview on CNBC or whatever it was that Besant was
is crazy. It's that's not how this works.
That's how you do this. And like, like, that's crazy.
We're we're doing capital controls in the United States
when we're not at war. One crazy, crazy thing we don't
do. And like two, Trump is trying to
do monetary policy without even going to the Fed, right.
We saw, I think it was last week, Trump announced that he
was going to order Fannie Mae and Freddie Mac to sell 200
billion in no sorry to buy 200 billion in mortgage bonds in an
attempt to drive down mortgage rates.
And like one that's not going to make that big of a difference.
I mean, like the Federal Reserve has $2 trillion worth of
mortgage bonds on their balance sheet.
If the Fed wanted, they could entirely cancel out Freddie Mae
and Fannie Mac there. And like 2, what are you doing?
Why are you trying to affect mortgage rates by by mortgage
bonds on the open market? Why are you going to true social
and announcing that you're going to crap cap credit card interest
rates at 10% and then saying that any firm that doesn't do
that is somehow breaking the law despite there being no law
involved? It's it's just absurd.
It's absurd. We've, like crossed through a
looking glass into like, this place where a single bad
decision by the Trump administration could
fundamentally destabilize the entire global financial system
and lead to millions of deaths. Like that's where we're at.
Yep. I mean, we really did.
They like, I know that this sounds insane, but a year ago,
this was the discussion that we had, which was they're going to
try to destroy the Federal Reserve, the independence of the
Federal Reserve, and that will destroy the dollar, and that
will destroy a lot of things. And so I guess I feel bad that
we were right because you don't want to see that.
I wish that we were wrong. I wish that in the year since
that we recorded that episode, the Trump administration
realized that this was a silly cause and that everyone was
going to push back against this. But they have.
And most of them apparently have, right?
Like the White House is going to every political reporter they
can and like leaking that they're upset about this.
Besant is going around saying he's upset about this, right?
Like, it's out there that a bunch of people in the
administration are mad. But fundamentally, you are part
of the Trump administration. Your entire administration is
centered around the one mad king who governs by edict on true
social. Like your madness is pointless.
He said he was going to do this. He tried to do this term 1.
Like, if you actually didn't think a president should do
this, you should not be involved with Donald Trump.
And that applies similarly to like all of the billionaires and
venture capitalists and stuff who supported Trump in the 1st
place. Like they are the ones who in a
very substantial sense need and depend upon this, like global
financial system, global system of trade, global system of
finance that largely benefits the United States and these
billionaires well, and they are supporting the person who is
taking the most direct steps to destroy it.
Yeah, so I'm the, I'm going to push back on this just for a
second. And I know we're a little off
topic now, but I am going to push back on this just because I
think that billionaires in general have reached a level of
wealth where they no longer believe that they they're immune
to with the problems with the dollar.
They're immune to problems with the global economy.
They can ride it out no matter what as far as they're
concerned, like they can figure out ways they have the means to
escape any kind of global catastrophe.
So they're not worried about it. And in fact, I think a lot of
them want this to happen because it will it'll, it'll put in
concrete these foundations of we're the upper class now,
right? Like who do financial collapses
hurt the most? It's not like you see
Rockefeller taking the L during the Great Depression like.
Hey, hey, some of those rich people lost more dollars than
anyone else. They still had more dollars than
anyone else at the end of it. Yeah, well, no, I think what
we've, I think there, it's already been determined that
Elon Musk is both made the most money and lost the most money of
anybody in history but it, or at least in a single day.
I guess it's the way they've they've termed it.
But yeah, so I like that it's a little off topic, but I do think
that it's I I think the billionaires are all almost all
on board with this. They're they're OK with this.
It's fine for them. They don't see, they don't think
they're going to feel the repercussions of this.
The politicians do. I think the politicians do, and
I think the financial experts do, right.
But I don't think, I do not think that the billionaires
care. They they're desperate to push
this narrative as well. Which also kind of like leads
into like, I remember when we had Georgie on Moonkat to talk
about her video and we were talking about techno feudalism,
There was a tendency in certain circles to dismiss it, like
saying the only people who actually believe in this are
cranks with no real power, right?
This isn't actually in line with their best interests.
None of them are actually going to go through with it.
And I just want to say Moon Cat was right and everyone who said
that was apparently wrong because they literally do want
citadels. They really do want to secure
themselves as the plutocrats over a burning husk of what was
once the most powerful nation on Earth.
Yeah, I do think we're learning to tape take people in general
at their word, if nothing else, from all of this.
Right? Like, like if Donald Trump says
he wants to destroy the Federal Reserve, just believe him.
I know that it's hard to believe.
If he says he's going to fight to take Green England, you might
as well just believe him. Even if it doesn't seem like a
real thing, you might as well just believe him.
I like the and. Well cuz even saying it in the
first place should be disqualifying.
Being like I'm going to personally take over the Fed or
I'm going to personally take over Greenland should be
something that makes you go. This person cannot have power.
Even if you think they can't actually do it, you shouldn't
want them anywhere close to that button.
So I do think that there's, this is the last point I want to
personally make on this, this matter, which is I think that
the administration is reaching A tipping point.
They're doing a lot of really unpopular stuff right now,
right? So even stuff where you can see
the legitimacy of it, right? Maduro was a bad guy.
It's good that he's gone from leadership in Venezuela.
The the, the way that happened. I might not agree with what has
happened since, I might not even fully understand.
But I think the main issue is that we now understand it was
totally for oil and all that oil is oil that nobody wants.
So, OK, And then we're talking about the government taking
shares of those companies so that they can help get that oil
out and taking revenue from that and that.
OK, so that's socialism. That's weird that Donald Trump
is pushing for that. But OK, so that's weird.
I assume that's not super, super popular with his base or with
anyone else, really. And then you have him
threatening an ally. That's generally not super
popular abroad. Multiple allies, right?
He threatened Greenland, he threatened Mexico, he he
threatened Canada and others that I guess we wouldn't call
allies, but still, like threatening Cuba and Colombia is
not great when you're threatening everyone else at the
same time. So you're ostracizing yourself
that way too. And then you also have a, a
Department of Homeland Security going around attacking people
and killing people, it's own citizens, right?
Which is so all of these are unpopular.
And then after all of that, I and genuinely, I feel like this
is just a, a fit of desperation you go after who is essentially
one of the most popular, even though he's not that popular.
I think his approval rating is 44%, but that's higher than any
other politician, basically. Like, people really like people.
Really, they kind of they're OK with Jerome Powell after all of
this. And so attacking him, it just
seems so unhinged and fruitless to me, you know?
Yeah. And like, we should wrap this up
soon. But the last point I want to
make is the world they are trying to shape is scary in a
lot of ways. Like, I can't even imagine what
a world looks like without NATO and without the Federal Reserve.
And where, like, the dollar is no longer the global reserve
currency. And we have like multiple
competing currencies where like the United States has strict
capital controls and has shut it off, shut itself off from the
global market where countries are considering sanctioning the
United States, the European countries are considering
sanctioning the United States, the European Union is
considering sanctioning the United States.
That's an insane sentence. Like Colombian leaders, Bolivar
Bolivarian Bolivarians are like once again talking about Grand
Colombia and like creating new unions of countries like across
South America and stuff like these.
It's truly unprecedented and it is fundamentally a destruction
of every part of the United's, like every good part of what the
United States has ever tried to be like.
The promises of equality in the declaration, the promises of
like restraints on state power in the constitution.
The, like, work done after World War One and World War 2 to try
to build, like, a global system to arbitrate disputes to avoid
war and, like, treaty agreements to try to prevent, like,
imperial expansion. Like, so many of those things
are now dead or dying, and it's unclear if they're going to be
able to save. And the world that is struggling
to be born is one that is going to be destructive, violent,
hateful and challenging to just existing.
Yeah. Yeah, I guess that that'll,
that'll do it for this episode. Rooting for rooting for the Fed.
I think they should probably still consider setting up cast
coin as legal tender and I, I that could probably fix a lot of
the problems that we have going on right now.
It is a safe haven asset.