Welcome back, everyone. I, Bennett and I are doing
double duty right now. I know how he's doing.
I know how I'm doing as usual, whatever.
But we're, we're doing another episode and this episode is
going to be about the possible end of the Fed, or at least the
end of Federal Reserve independence, which I, you know,
the Fed has been a villain for a long time.
I think they're an easy target. It's hard to defend them, I
guess is what I'm saying. I, I understand why people would
side eye us a bit with the idea of being like, we need to maybe
pause this and think about it a little bit more.
So the reason I'm bringing this up is because the doge team is
trying to get into the Fed. Is it like they're this is their
next move, the treasury, the Fed, they want to be involved in
these important parts of I don't even know if you call the Fed a
part of the US government. I guess so, but like it's almost
supposed to be separate. It is supposed to be separate,
right? It was very explicitly set up as
like this vehicle where like the Federal Reserve Board has this
small amount of government oversight, but each of the
member banks are like basically fully independent of the federal
government. For those who are unaware, the
Federal Reserve sets many of the monetary policy decisions of the
United States, including in large sense setting like the
rates for our debts that are going to be issued.
They also participate in important major market features
regulating certain liquidity actions, providing certain
liquidity. They are a major bank regulator,
especially for larger banks, banks that have master accounts
at the Federal Reserve, which is where banks, the Federal Reserve
is the bank for banks like it's where the banks store their
reserves. They put it at the Federal
Reserve Bank. The reason we're talking about
the Federal Reserve is because, like we mentioned, they are in
large part responsible for the United States's monetary policy.
And the United States dollar is evidence of how pervasive and
effective American hegemony has been around the world.
It is the unit for a massive account of trade.
Our debts are part of most countries like reserves, most
banks reserves. The dollar is held by almost
every single country is like part of their foreign exchange
reserves. It is the global reserve
currency. And our fear is that the cruelty
and avarice of the two headed king is going to result in a
massive destabilization of the dollar because the independence
of the Fed will be threatened. And once the independence of the
Fed is threatened, the globe That depends on the Fed for a
stable ish dollar. Stable.
It's stable. It's stable compared to every
currency. So a stable dollar, once people
cannot count on that, a ton of different pieces of like global
trade and stuff can fail to function as expected.
Will fail will fail, not can will.
There's no doubt that like we don't know the amount of
destruction it would cause, but it would absolutely wreak havoc
on the entire financial system globally, globally.
Now, to be clear, a couple things I just want to clarify.
The Federal Reserve has not been around forever when it comes it
comes to American monetary policy.
For a long time, even at the beginning of the nation, you had
different states issuing money and then you had you've had all
different kinds of money. You've had Angela Vergara on to
discuss company towns issuing their own money, right?
So like, monetary policy is weird, but the Federal Reserve
has done a really amazing job. And it's really difficult to say
that because I know how hated they are, but they've done a
really good job since 1913 of stabilizing the dollar and
making it really useful for the rest of the world.
So credit where it's due, right? Credit where it's due.
And they're really interesting as a central bank in like their
current degree of independence. They predate like, the
transition off the gold standard in the United States and like,
managed and handled that transition relatively well
during the period like the interregnum between World War
One and World War 2. And the Fed has also often been
a target of Elon Musk's ire over the years.
He has frequently tweeted, especially during the Biden
administration, his insistence that the Federal Reserve needed
to cut rates immediately. I think there is space for
criticism of the Federal Reserve's policies during the
Biden administration. But I also think broadly,
compared to a lot of other developed economies, the United
States saw a faster recovery from COVID and had a, like,
better landing than a lot of other currencies and countries.
And at least part of that can be attributed to Federal Reserve
policy, and I understand that's not.
Popular sentiment. Federal Reserve, and we'll have
some criticisms of the Federal Reserve as a regulator and in
other roles later in this episode, but we got to get
through the important part, like the threatening the global
financial system part first. OK, you guys.
Right, right. And let's do that.
So so I was talking to Bennett the other day and I basically
was like, I think they're going to destroy the Fed.
And he was like, I don't know about that Cass.
I'm not sure. I'm not, I don't maybe take a
chill pill. And I was like, hold on, let's
talk about this. Let's play it out.
So the Federal Reserve had has its own like independent police
force, the US Federal Reserve Police, right?
And so Bennett basically said to me like, oh, the police would
arrest the doge team members trying to come in.
And I said, OK, they take them, charge them and then what?
Like what is the next thing that happens?
Like Bennett, do you want to play this out of it or should
I'd like just keep going? How do you want to sure?
Well, there's a few things I think we can talk about here.
One, we can kind of identify that this is going to be one of
their targets because Elon Musk has already, in the last couple
weeks, been tweeting conspiracy theories about how the Federal
Reserve is unaudited, which is not true.
The Federal Reserve publishes their audits on their website.
You can read them. They use different accounting
standards because they're a central bank and so like the way
their assets and liabilities work are a little bit different,
but there's audits from accounting firms.
You can find them. They're there, I promise.
But it seems similar to his infatuation with Fort Knox, like
he wants to go to where all of America's gold is and make sure
the gold is there and definitely not take it like a cartoon
villain. He's he's definitely got good
plans for the gold. Our fear is he's going to use
this pretext of auditing the Fed, looking for fraud at the
Fed, trying to get the Fed to cut rates to negative things so
he can get more money. It's always about getting more
money with Elon and send the Doge boys in there and in so
doing precipitate global panic. In the name of finding waste and
fraud, right. So, so they will say that
they're they're planning on finding a bunch of waste and
fraud in the Federal Reserve System.
I don't even know how they would be qualified to.
I don't think 19 to 22 year olds I'd like, I don't think they
have any concept of what money even is truly.
I don't, I really do not think they understand it.
The idea that they're going into the Fed and telling them what to
do, I think is is terrifying and should scare people.
OK, If we had experts going in there.
And and by experts, I don't mean one expert.
I mean these are the. Hundreds who went into the
nuclear agency and fired the people who keep the nukes safe.
Like you can't. Put them into the money place.
There's and there's so many other things like USAID, right?
They go in there, they destroy that, and then China's like,
great job, we love it, good job. Why do you think they're happy
about that? Why do you think Russia is happy
that we're? They can do belts and roads at
50% the cost because there's no competition for global.
Yep, like they're super stoked about it.
So I like dismantling the CFPB doesn't help anyone dismantling
USAID, like maybe there's waste and maybe there is waste and
fraud in these agencies. I'm sure they're like, I'm sure
there is. But but the idea that it is so
monumental that we need to shut these agencies down is a lie.
Like if you actually thought that's what was going on, you
would empower the inspectors generals instead of.
Firing them. You would like hire a special
counsel that you can't fire to like look into these things and
produce a report to Congress, right?
Like there are avenues and mechanisms.
There are, like, ways to root that out.
And I also expect that the, like, degree of government
fraud, like the percentage of fraudulent payments, is much
smaller than other businesses Elon Musk has been involved in.
Like this is the guy who, when he ran his payments company,
said we should stop collecting people's addresses and Social
Security numbers. It's taking them.
Too long to sign up? Look.
So I think what, what I I don't want to do a prediction, but I
do want to say this out loud. My fear, my personal fear is
that the Doge team, these 19 to 22 year old idiots with no life
experience try to go into the Federal Reserve and do something
there. Now, I suspect they will be met
with either the Federal Reserve police or, you know, Jerome
Powell or one of the other Federal Reserve board members
being like, fuck right off. And then they're going to say,
well, then I'm going to talk to daddy.
And then they're going to call Elon Musk.
And Elon Musk is going to call Donald Trump.
And then they'll issue some fucking executive order or some
shit. And basically, it will force
Jerome Powell's hand. And again, Jerome Powell, not
someone I ever thought I would be defending on crypto critics
corner. But here we are saying like,
well, I really hope that Jerome Powell doesn't resign because
he's forced to and be like, hey, Federal Reserve is up for grabs
now so that the world knows what's going on here, which is
my genuinely my fear. And if that happens, we're in
trouble. Now, this is not the same as a
bank run. Because if Elon Musk and Donald
Trump don't do it, there's we're good.
But this is in their hands now. And I need people to understand
that, that they want access to all of this stuff.
And if they fuck the Federal Reserve, if they fuck Swift, if
they destroy the entire system as we understand it on an
international global scale, as the Bank of Settle International
Settlements understands it, we're fucked.
We're just so fucking fucked. People who were like, burn the
fucking system down. You don't get it.
You do not get it. You, you don't.
There's no you. You have no we.
No one in generations, not not probably like 5 generations has
a a remembrance of what something like this could be.
It's been forever. It is a disaster.
Don't let it happen. Do not let it happen.
Call your senator. Tell them you are concerned.
Call your congressman, tell them you're concerned.
Subscribe to journalists. Make sure that you do the thing.
Talk to your friends and family. This would destroy the dollar,
OK? And it isn't hyperbole anymore.
This is a real thing that could actually happen.
OK? I there's no reason for it
except there's a bunch of idiots in charge.
It's, it's called kakistocracy. It, it is the definition is
government by the least suitable or competent citizens of a
state. And that is what we are living
through right now. Yes, there are so many, like,
big red buttons in the federal government that you're just
never allowed to touch. And like, going after the
Federal Reserve is one of them. And it was a problem in Trump,
one when he like was jawboning and basically using the bully
pulpit to go after Jerome Powell in the Fed.
If you thought. Tweeting was bad if you thought
tweeting was bad. It's like, yeah, this would
potentially be an order of magnitude worse.
And so hopefully a. 100 or orders of magnitude worse to be.
Clear and like to the degree where like the monetary currency
collapse, I'm terrified would be on the like realm of the Wymer,
right? Yes, which also I'm going to get
moderately conspiratorial here for 90 seconds or so.
Elon Musk is lying about Fort Knox.
He's pretending the gold isn't there and acting like no one's
been in there for 50 years. In Trump, one Mitch McConnell,
Steven Mnuchkin, a bunch of Kentucky politicians went into
the Fort Knox. The gold is still there.
The gold is still at the Federal Reserve banks to the office.
The Treasury Office of the Inspector General inspects the
seals on our gold reserves every year.
There's a process for these things.
But like, I can't shake this crazy feeling that like they're
out if they blow up the dollar is to do like shacked in the
Weimar Republic in Germany and start issuing a second currency,
right? Like he was issuing the Renton
mark, which was backed by the mortgages or something on
property in Germany. And I can imagine them
convincing themselves that if they gain physical possession of
the United States gold, they have an insurance policy.
If they blow up the dollar, they'll still be able to pay
their soldiers an issue like some other kind of currency.
And again, you can't just you can't.
You can't. There's not enough gold to back
like the amount of dollars in circulation without like
incredible devaluation. Like there's not, there's not
enough. And gold doesn't fucking matter.
It's a shiny fucking metal you fucker.
Sure that we can. That's a whole other discussion,
but I just want to make sure everyone understands too.
The dollar for almost the most like almost like almost entirely
is not backed by gold. There's like a very small
percentage of the the Federal Reserve like has some some loans
out and some gold to back loans and to like it's it's minimally
used. It's minimally used for the.
Doctor and it's we, we have a lot of gold.
But we have, but we have the most gold in the world.
We have the most gold in the world and so.
Unless you believe conspiracy theories about China.
Or any other number of countries, I'm sure.
I do think Elon Musk is like a cartoon villain with a shiny
rock in front of him. I do think that the Federal
Reserve is in like serious, serious danger here.
It is one of the most concerning things happening right now.
I know it's a slew of concerning things.
I know we're talking about CFPBUSAID, the Treasury, Social
Security insurance. A lot of the president declaring
himself a king. A coup?
OK, I understand that if they get to the Fed, it means it it
it means trouble for every single person in America.
So I I just want everyone to be aware of this and concerned.
It is. It is one of those red buttons
that makes the path to recovery, like both for the United States
and for the global order, that much harder, that much longer,
and that much bloodier. And sadly, Burrito has assured
me she has the ear of Donald Trump.
And cast coin is probably going to be used in the Bitcoin
strategic reserve.