Justin Wolfers on Trump's Economy as Pressure Mounts

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0:36Koushi products are not available in all jurisdictions. Prices, values, and available markets may differ from those mentioned. For more information, see koushi.com slash regulatory. Donald Trump is crashing the United States economy as he further escalates his catastrophic war in Iran in the real world, not in Donald Trump's fraudulent criminal world. The United States has not brought in$19.2 trillion. If we brought in$19.2 trillion, then why is the debt going up over$3.5 trillion in this year alone? Why has the total debt, and I know a lot of people aren't talking about this anymore because they just want to cover up for Donald Trump and MAGA, But the national debt is approaching$40 trillion.

1:26Donald Trump has added basically 30 % in his presidencies to the overall national debt. Let's just take a look at charts, not Donald Trump's fraud, to talk about what's really happening in the economy. And you know what's happening in your economy, in your home, in your apartment. You know the struggle to pay rent. You know that housing is not affordable. Groceries are not affordable. Gas prices are going back up right now. Let's just talk about the data because that's what we do here at the Midas Touch Network. You want to take a look at the traffic in the Strait of Hormuz. You know how Donald Trump says, never before have we had such good traffic.

2:09It's like never before so good. Actually, if you take a look right here, it looks like to the left, the giant wall from Game of Thrones, and then everywhere to the right of it is where the traffic is right now. Traffic in the Strait of Hormuz is at a complete standstill. There are no ships leaving the Strait of Hormuz, as now it appears Iran will escalate in response to more of the war crimes being committed by the Trump regime and perhaps shut down the Bob Elmond Obstrate in the Red Sea. At the end of last week, oil prices are up 20 % over the past 10 to 15 days or so. Oil prices were approaching$90 a barrel.

2:54You have Treasury Secretary Besant, in my opinion, trying to manipulate the market by bringing in certain whale investors to short the crude market and try to bring down the price there. But the crack spreads, they don't lie. That's the difference between the refinery price and the price of crude at an all-time high there. Those crack spreads, like$86 a barrel, the crack spreads are higher than the price of crude itself, which is unheard of. And that crude price is that$80 to$90 range. But with this escalation, We can expect that to go up into the 90s and perhaps even higher. We'll see where that lands later today when the futures market opens there.

3:41When it comes to mortgages right now, as you know, the mortgage rate, about 6.55 % up sharply recently, and that continues to go up. I mean, housing, entirely unaffordable. You take a look right now, speaking of housing, you have foreclosures this year, a 21 % increase from last year and a 30 % increase from two years ago. And I think these are important metrics. Foreclosure up right now, 30 % from two years ago. And when you look at credit card delinquencies, record high, student loan delinquencies, record high medical debt delinquencies record highs consumer sentiment all-time historical lows and when i say record highs and all-time historical lows you know when it comes to all of this data um always in the negative always on the bad side of these things i mean we're talking about great recession we're talking about the collapse of the dot-com boom i mean we're talking about a lot of data right here being aggregated.

4:58You have healthcare being torn away from Donald Trump's one big, beautiful bill, the disastrous fraud that that was. You've seen already millions of people lose their health insurance. As soon as the midterms are over, we're going to see millions of more people get kicked off of Medicaid and millions of more people lose the insurance that they have that's coming soon and more and more people losing their insurance. When you look at all of the economic metrics, they look a whole hell of a lot like Donald Trump's DJT, Trump media. I mean, you look at Trump media crashing right now. The stock is sub$10.

5:45When you start a SPAC, you start at$10 a share. So it's just below water right there. and what's the priority of Trump media right now? You heard at the end of last week, Trump media has been pitching$100 ,000 monthly fees for stock traders to get instant or to get access to Donald Trump's posts where Trump manipulates the markets. This is real. Before everybody else sees Donald Trump's post. So if Trump posts about NVIDIA or Micron or whatever the stock it is, If you pay$100 ,000, you can get access, or this was being floated, to Trump's social media posts on Trump Media First, available to the oligarchs and the stock traders.

6:34I mean, what are they, like systematizing this horrific, horrific behavior? You know, also, I'm sure you've been following this, SpaceX crashing, tanking down 22 % or close to 23 % since it was added to the NASDAQ 100. So Trump and Musk had the rules changed for the NASDAQ and NASDAQ 100. Normally, you'd have to wait a significant period of time to see how a company does because you want to avoid pump and dumps and all of these schemes before a stock can be put on the NASDAQ 100 because a lot of 401ks and mutual funds and funds that people invest in, part of the investment is in the NASDAQ 100 or in the NASDAQ.

7:24So when SpaceX put itself into the NASDAQ, You may not want to even own SpaceX, but your 401k, your mutual fund, your funds that you may have been invested in, they had to purchase SpaceX because they follow their criteria, which says they have to buy certain NASDAQ companies. So when it was added to the NASDAQ 100 and it got this status, they had to buy SpaceX. So that's been harming people's portfolios right now. And the reality is, and in my opinion, I mean, it's the revenue that it was making never merited anywhere near the valuation that it was given at first. And, you know, and here's the results of all of this.

8:10Also, more reporting about how Donald Trump would make social media posts about various companies in and around the time that he would purchase the stocks in these companies. And CNN did a pretty good expose where they said, Trump trade stocks before favorable truth social posts. And they gave tons of examples how Trump made stock trades shortly before posting favorable comments about them. So with all of this taking place, and I know the struggle is real, what's Treasury Secretary Scott Besson saying? How is he dealing with all this? Well, he went on a podcast called The Way I Heard It. And Treasury Secretary Besson's of everything is, look, if you do the right thing and you work hard and you make good decision, there still may be the American dream for you.

9:04I mean, just what an asshole this guy is, huh? Here, play this clip. I really think it's up to us to let people know that the system does work for them. If you do the right thing, if you want to work hard, if you want to make good decisions, then there is still the American dream. So and you've got to make sure that they are good paying jobs on the other side where people can move up. Then he goes on State Regime Media Fox with State Regime Media Fox, and he talks to them, and he's just like, look, Fort Knox has gold, and we're going to forget Jesse Watters. We have the gold in Fort Knox, and you can trade these certificates for gold.

9:53No, you can't. What are you talking about? Fort Knox gold. They want to talk about everything other than the struggle that the American people are experiencing. Here, let's play this clip. Have you visited Fort Knox? I haven't. I haven't. People, my staff has. We're going to the treasurer's office. The treasurer has been to Fort Knox. I am happy to say all gold is present and accounted for. The U.S. has the largest pile of gold in the world, over a trillion dollars at current market value. And we're getting more gold from Venezuela, I hear. We're getting a lot from Venezuela. We're getting gold.

10:28These oil sales are going great. It's going back to the Venezuelan people. And just so you see, even though he says, I never took the trip to Fort Knox, this has actually been something that Donald Trump has been saying to his supporters over and over again. We got to check out if the gold's in Fort Knox. We're going to get rich with all that gold in Fort Knox. You'll see it's all right around the corner, just like your Doge dividend checks, right? $5 ,000. Your tariff rebate checks, it's right around the corner. The gold in Fort Knox, you're gonna get rich. You're gonna get rich. You're gonna get rich.

11:02Remember when Donald Trump said, he goes, I would be the greatest communist, like Lenin. That's what he said, Lenin. Just like Lenin, because I would just promise people everything and then I wouldn't even have to deliver. I'd make the greatest communist, he said. Here, but I don't need to show you that he said that, but here's the video of Fort Knox. Hang on this one. You know, all my life I've heard about Fort Knox. That's where the gold is kept, right? I heard Fort Knox. But, you know, we're getting a little bit shaky. We're getting the yips on this stuff. Like, I want to find out. So we're going to open up the doors.

11:32I'm going to see if we have gold there. We want to find out. Did anybody steal the gold in Fort Knox? It's a pretty amazing place. But I'm going to actually go. We're going to open the doors. We're going to inspect Fort Knox. We want to make sure that we actually have, you know, 400 tons of gold or whatever the hell it is. It's a lot of gold. I don't want to open it and the cupboards are bare. Could happen. If you look at some of the things, oh, by the way, where do we go into the education department? We haven't even done that. So we could find as much as$1.5 trillion worth of waste, fraud and abuse.

12:05If we do that, we can balance budgets. We can do a lot of other things. All right. I'll show you just so you can hear him say, Lenin, Lenin, I'd make the greatest communist. Here, let's play this clip. I want to get the word out because what's forming is of communism in the country and communism's easy to sell i would be the greatest communist in history i'd be right up there with lenin i'd be i'd be as good as anybody you've got free rent for the rest of your life what they don't say is that you'll be living in squalor in 12 months you've got a free house would anybody like to have a free house we'll take it away from somebody we'll give it to you you'll have murders all over the place communism's a disaster it's been proven to be for thousands of years under different names, but same thing.

12:50It's very important. And then you'll even see in 2025, Donald Trump, when he was in the Oval Office with French President Emmanuel Macron, Trump again, talking about Fort Knox and Macron looking at him like he's like a crazy person here playing this clip. We're actually going to Fort Knox to see if the gold is there, because maybe somebody stole the gold, tons of gold. I think also the way to think about these reconciliation bills that Donald Trump does, you know, I used to litigate against Ponzi schemes. And I was a lawyer and I would be appointed by a receiver who would work for the SEC and I would litigate these cases against massive Ponzi scheme for us.

13:33One of the tactics that they would do is they would create SPV, Special Purpose Vehicle 1, Special Purpose Vehicle 2, Special Purpose Vehicle 3. So they'd raise money for Special Purpose Vehicle 1. They'd take it for themselves. They would tell Special Purpose Vehicle 1 investors, we got all this money for you, billions of dollars we've made. And then what do they do? They then do Special Purpose Vehicle 2 to then pay a little bit to Special Purpose Vehicle 1 investors so that they feel okay. And then the Ponzi schemers then take for themselves. And then they do it with special purpose vehicle three and four and so on until they get busted.

14:10That's like a Ponzi scheme. Reconciliation won the big, beautiful bill. Reconciliation two, now 3.0. To me, it's just like special purpose vehicles one, two, and three. It is robbing Peter to pay Paul, except here it's robbing from the American people or bringing the American people further into debt in order to pay Paul. In this case, no offense if your name is Paul, Donald Trump and the right-wing oligarchs and the military industrial complex and to feed the money to them and then create another urgency. Ah, we need reconciliation 4.0. Ah, we need reconciliation. Didn't you all say the big, beautiful bill was gonna cover everything?

14:48Not only did it destroy American lives, it didn't cover anything. So you had to go back for 2.0. You had to go back for 3.0. It's a Ponzi scheme. And all the while, Donald Trump throws out the fraudulent number,$19.2 trillion I brought in. And of course, he didn't bring in$19.2 trillion. By the way, we talk about in our book, WTF America, pre-order right now, WTF America, I think we have on the QR code. It's climbing the charts. It comes out in October, pre-order helps us a lot. All right. I want to bring in right now Justin Wolfers, an interview I just did with him, top economist, runs Platypus Economics.

15:27He's the chief economist at Midas Touch. Now, let's bring in Justin Wolfers. Now, I want to bring in Justin Wolfers, chief economist at the Midas Touch Network, also the founder of Platypus Economics. Justin, great to see you. As always, Donald Trump's jawboning this week saying Iran wants to meet, Iran wants to meet. Yep. The boy who cried wolf clearly looks like that weak little pathetic boy, in my opinion, claiming deals. The boy who cried deal, I should probably call it. Nobody wants to, you know, nobody. I don't think the markets are buying it anymore. This comes at a time where there has been not just an escalation, a rapid escalation.

16:10Donald Trump destroying bridges and civilian infrastructure in Iran. Iran responding by targeting a substantial infrastructure of the Arab nation neighbors. We're learning that further escalation is probably likely the MOU is a pipe dream. Like there's not even a thing anymore. We ain't getting back to there, in my opinion, anytime soon. At the same time, in the dark of night, you had Donald Trump tariffing Brazil 25 % because of the Bolsonaro family. Many believe that they're kind of putting tariffs on Brazil, but only the Bolsonaro's can get away with it as Flavio is running against Lula for president and Donald Trump now threatening more tariffs against Canada, saying that because of the wildfires, we want to punish Canada, whereas Canada helped the United States.

17:00And when we had wildfires and lost their lives helping us fight our fires here, This is what Donald Trump is doing. Overall, I just want to get your take because you and I talk about reliability, predictability, what America used to be known for. And this isn't just volatility. The U.S. is trading, in my opinion, like a penny stock on steroids, or I should say truth social. What do you make of it? Mate, I'm tempted just to start with a joke that I'm surprised we haven't gotten tariffs on Belgium for birding us in the World Cup. But the fact is the president didn't use tariffs there. He just called the head of FIFA.

17:36So not really a joke there at all. Look, let's come back a level because it's not just relentless dishonesty. It's if you don't have a reputation for being honest, it actually makes any form of communication difficult. Right. If you knew that I was a lying liar and you went on a date with me and the date went really well and at the end of the date I said, I think I love you, you don't know where you stand. It gives me no ability to form a relationship with you or to walk away from a relationship with you because nothing I say can be trusted. And the president has treated truth as if it were purely optional.

18:14And in the short term, I think it had a very big political payoff for him. It had a payoff because the news media was not wired for someone to be relentlessly untruthful. There were a set of norms. If the president said something, you would give a difference. You wouldn't fact check the president in real time. You would take his messages because you thought his messages would be informative. And you broke all that. And it had a very large short term gain for the president. But where that leaves us as a country is that he can go abroad and say things and no one takes him seriously. On one day, he says he's going to blow Iran to smithereens.

18:55I thought it was a deeply dismaying day. I hated every part of it. I think blowing other countries off the face of the earth is an immoral, unethical thing to do. But the thing to realize is that is a power that we have. And it's a power that we have because our tax dollars have gone to work creating this extraordinary military, and it does give us leverage. But if you speak like that and don't use the leverage, the leverage disappears. The president's speech no longer carries any weight, and I think that's a huge part of the problem in trying to get to peace with Iran. The guy promises one thing today, and then he rips it up the next day, right?

19:29Once you've seen that act, why would you give something up valuable if you're not going to get anything valuable in return? You mentioned Belgium and the joke that you were giving, though we should say Belgium gave Donald Trump a golden ring with all of these rubies and diamonds. True story. And that was one of the reasons that he made a tariff decision that reduced certain tariffs after getting a gift from Belgium before. for when you as an economist are making projections. That's, you know, when you teach university, you know, it's charts, it's mapping, you know, and the charts are based on series of assumptions.

20:12And so when economists, whether they're at banks, whether they're people plotting mortgages, inflation the markets uh jobs whatever you are able to assess trends and you could you know you know we sometimes we call it soft landings and you know you you follow things uh the one of the broad issues you know and i want to hear your thoughts you know as an economist the challenges that this also presents now that we've established what it means when trust is lost but the level of volatility, you know, is so off the charts. And it seems that the only people who make money are the insiders when essentially they create their dips, they buy their dips.

21:00But at some point, the dips become, you know, you can only do that certain amount of times before the dip becomes a whatever. And, you know, look, you see, I saw Jamie Dimon, you know, someone who I, you know used to very much respect i see him on stage i understand he's got stakeholders and shareholders and he's got to say certain things that he's got to say but you know he's up there on stages with trump saying things that make me to be honest a little bit kind of sick to my stomach while trump is doing all of this and so i just want to get your take broader about how you deal with this as an economist the volatility yeah so it's interesting because the emotional volatility that you feel.

21:39I mean, Ben, I know no one lives it more than you do. You're on top of the news cycle day in, day out. Every time I look up on the internet, there you are. That emotional volatility that the news cycle is literally an order of magnitude faster than it's ever been, that the half-life of a story now is two hours, that's one thing. But actually, it translates in a very different way into financial markets. Here, let's think about this slowly. Let's say the president says, I'm going to invade Canada. The first time he says that, you think to yourself, crikey, that would be terrible. This is a president out of control.

22:13I definitely have to dump stocks. We have the worst possible president. This is going to lead to a painful war. This is going to have terrible economic consequences. And then by the end of the afternoon, the president said, I was just kidding about bombing Canada. Okay, so you've lived through that. Now the next day when he wakes up and says he's going to bomb Canada, what are you going to do? You're going to realize that much of the time he says that, He's kidding or he backs down. In which case, you no longer want to be the one who sells your stocks because they're going to rise again by the end of the afternoon when he says he's not going to bomb them.

22:48Because you see they're going to rise in the afternoon, you're going to sell them in the morning, which actually means that the president's words do less to move markets today than they used to. And I can give you a couple of examples. When we first went into a run, no one was sure how serious we were that actually led to very sharp stock market movements and then the president every day I think I counted literally 50 occasions where he said we're on the cusp of peace with Iran if we were literally on the cusp of peace with Iran you would expect the market to rise all the way back up and the first times he announced it that led markets to respond that way but then people kept eventually understood every time the president speaks it doesn't actually mean anything and so that meant markets today respond less to what the president said than they used to.

23:33Let me explain why that's complicated. One of the biggest checks on the president is sometimes he does a dumb thing and the markets tank, effectively telling him it's dumb. The problem is if the markets now understand half the time when the president speaks, he doesn't mean anything, this is the point of honesty being important, then the market no longer tanks. And so that means next time he does a dumb thing, the market's not going to tank, in which case he's going to persist with the dumb thing. um and so look i maybe i went deeper into that than you really want to but let me just come back brought us to where we are today because you look at these strategic petroleum reserves and people who are a lot smarter than me in this area say you know remember that the leonardo di caprio movie you know the the comet's coming down don't look up don't look up you know and people are saying this tank bottom thing is a real issue and it's problematic and we look at the strait of hormuz and it's closed and Trump is saying it's open, but it's not open.

24:29We look at the escalation taking place and you go, wait a minute, this right now seems to be that moment where we need to deal with it. This is serious stuff. And even though Brent crude is going to be approaching $90 a barrel, which is very high. It took a long time for it to get there. And I've been sounding like a oil geek talking about three, two, one crack spreads and trying to explain, you know, the Delta between crude and refinery prices. But this is your world of charts where you see these issues. And I feel like a crazy person sometimes. And everybody, it's there. The comment's there, I'm telling you.

25:20And you'll be like, Ben, it's not as bad as you think it is. But what do you make us this moment particularly though feels like this is the bad moment. But with all of those other times he did the tacos and the this, this moment feels like, well, you know what? But I know our audience feels the seriousness of it. What do you make of it? Yeah. It's funny that you raised the taco because we can stick with Mexican food here. So the so-called taco trade was Trump always chickens out. And when we went from bombing Iran to a ceasefire, the taco trade looked really good. Now, I've subsequently heard that our Mexican food menu has expanded.

25:56I don't know, Ben, have you heard of the nacho trade? This is the view that I think you're expressing. Nacho is not a chance hummus opens. So the concern here is that the US doesn't have a pathway to getting the straight consistently, persistently open. And that has much longer term consequences. And so this is where what I want to do is sort of just draw your attention to different phases of the war with Iran. In the first phase of the war, markets responded very badly. And again, I want to remind people I'm not obsessed with markets. It's what they're trying to tell us about the economy. When markets tank, that's because smart people on Wall Street who bet millions of dollars are betting that the future profitability of American firms will be lower.

26:43And so I'm not obsessed with Wall Street. What I'm obsessed with is understanding the future of the economy. So when we first went to war in Iran, markets absolutely tanked. And what they were doing was responding to concern about the intensity of the war, which is how much damage would the U.S. do, how much would we damage Iranian infrastructure, how much damage would there be through the rest of the region? Remember, this was meant to be a four to six week war. We're now at four to six months. And now that we went through one, phase one of the Trump campaign was bomb, boast, and blockade. Then we had the ceasefire, didn't work, so we went to the ceasefire and now phase two is bomb, boast, blockade.

27:26Nothing's changed. And the fact that we seem to be out of ideas and unable to get ourselves to the negotiating table in order to do more than Trump claims he had an agreement. He didn't. He had an agreement to agree in which they hadn't actually agreed on any of the terms that the suicides disagree on. Mate, I can have an agreement to agree with you, but it doesn't get us anywhere. And so the fear is at this point we look like we don't have a way out. And so now all the concern is not about the intensity of the war but about the duration of the war. We know it's not four to six weeks. We know it's definitely at least four to six months.

28:02But what's happening now is it's raising a very real possibility of four to six years. That's not alarmist. That's actually reality that that very much is in focus right now. By the way, I did warn people about this at the start of the war. And so what that in turn means is we can follow what's happening to the price of what we call the spot price of oil, the price of oil today. But people are also betting on what oil prices will be in the future. We call those futures contracts. And what you see over this current phase is those futures contracts now are moving quite sharply. Again, that's just the market saying, hey, we're not really worried so much about the intensity now.