Kevin Warsh *JUST* Revealed his Plan | and oh my f**k sh9t

Holy moly. The Federal Reserve Kevin Walsh just selected members who are going to be part of the task forces. And oh boy, you are in for a treat on who these freaking people are. One of the boys literally has me blocked on Twitter or X as they say. And you know what I think about when people block me on X. Going into this video, I just want to be clear. The thesis I hold uh is that Worsh wants interest rates to go to zero to fulfill his probable campaign promise to Donald Trump one way or another. He will likely get there, though it will probably take more time than people expect. I do think that he is buying time during this transitory inflation period without saying it just by going dark basically. We're not going to say it's transitory inflation. We're just going to say nothing. Uh and we are using these task forces to buy time. That is bullish for now, but in the long term it's probably bad because Walsh is in my opinion based on his history read of what the heck he did in 2008. Not that good. This frankly means that when the economy starts to struggle, which it will one day, probably already has in some places, wash won't be our best friend beyond cutting interest rates to zero. That sucks for anyone with debt. It's really, really bad. It's probably worse than ever before. And today he's picked a whole bundle of people who are going to give us some entertainment guaranteed. All right, let's get into it. First things first, we got Thomas Sergeant, NYU bro. Basically, he um he wrote this paper that says some unpleasant monetarist arithmetic. And he essentially said that all debt eventually just gets printed away by the money printer, which frankly everybody kind of already knows that. He wrote that in 1981. And that's exactly what's happened for the last like almost 50 years here is we just print our way out of debt because when we print money, you know, we we issue debt. Uh the United States, let's say it's a hundred billion of debt. Okay? Then we grow the economy for 50 years and now we have a $23 trillion economy. That once hundred billion was worth a lot. But because we've inflated our fiat to nothing over 50 years, purchasing power has plummeted of these currencies, you know, all fiat basically, but the dollar especially. Well, then that hundred billion dollars doesn't seem like that much of an expense anymore. Sounds like a maybe 4 month vacation in Iran. I sorry, I misread vacation for operation in Iran. But anyway, he's got some banger lines. Some of them uh or my favorite out of the lines that he comes up with uh are uh quote inflation died through the incredible or the credible regime change. Here I am thinking about the incredic coaster from Disneyland. It's great. Infla hyperinflation died through credible regime change, not gradual rate hikes. There we go. So basically, we never actually fight inflation by raising rates. We fight inflation through credibility. How do we prove credibility? We prove credibility by using good data. When we use good data that people believe, people don't believe the government data. We pretty much all agree with that. It's super lagging. It's subject to a lot of revision. And it's not forward-looking. Well, I guess that's redundant with lagging. But anyway, the point there is how do you get credible regime change? With credible data. And you kill inflation with credibility, not by gradually hiking rates. Boom. There you go. Write this guy down for anti- rate hikes. Good, but probably also not great for the money printer. His overall message has been, you got to get people to believe in the Fed, and it is not fair for us to just forward guidance our way out of problems. It's kind of an interesting take. Uh he also believes that we should basically uh never monetize the debt, which is basically getting rid of the debt by running the money printer. That it would definitely be one heck of a change for the Federal Reserve since that's what they always do. But Kevin Worsh doesn't have to pick up everything this guy says. So far, my takeaway from that first guy right there is credibility through better better data. bring rates down, but stop running the money printer. You're gonna find that's a theme in just a moment. Greg Mancow, this is a uh mancow. Man, it's it's it's m k i w. I'm not even going to try again. It's probably not mancow. These we've been talking about avoiding tits. Yesterday we were talking about the the cow is milked dry through the great sucking. Anyway, this Greg guy from Harvard wrote the textbooks on uh like a lot of Federal Reserve junk. In 29 in 2009, he wrote a column that the Federal Reserve should actually consider negative interest rates to stimulate the economy back. Now, that's pretty freaking incredible because he thinks that money printing to do helicopter money is a bad idea. He said in 2021 after co that stimulus, the money printing went way too far and instead we should just have negative interest rates. That's what he said back in 2009 to help support an economy. Now, what's really interesting about that is in 2022, I made a thesis. It's still my 10-year thesis today. It's the same freaking one. By 2032, my thesis is we will have lower interest rates than ever before. We might actually be back to negative interest rates. We had those before COVID in Europe. You know, they were charging you to leave money in a savings account to get you to go spend it. You had to pay money to save. Crazy, right? Anyway, he literally argued for negative rates to drive growth. And by doing that, you're not just blanket helicoptering money to everybody. You're saying, "All right, look, we'll make borrowing costs really cheap, and whoever has the balls to actually borrow at the bottom of the economy, whoever has the big balls to turn this pile of into a rose garden, by all means, go borrow money at negative rates cuz you deserve the profits if you can pull it off." Kind of interesting because it's been my thesis for four years now. Interesting to see a negative radist, a negative rapist on the uh on the warsh camp. Then we got William White. Ah, Bill White. This guy was a little bit of a doomer. He told Greenspan in 2003 that there was going to be a credit bubble. Okay, he was 5 years early. He was right, but he was 5 years early. And he basically says that ultra easy money breeds malinvestment, debt, and instability. That is probably the most consistent anti-quantitive easing guy that you have. Basically, don't run the money printer to bail people out. Let bad businesses die. That's kind of very like great resetish, like just kill off the crap again. See where we're going here? We will get rid of the money printer, get rid of ultra easy money, but we'll enable the potentially strongest to borrow at cheaper prices. Which, if you think about it, it means all the rich people with cash are going to do just fine and anyone with debt is going to get burned. Okay, let's keep going here. Then we got All right, screw this one up. Raguram Rajan, Chicago Booth guy. Okay, this guy in 2005 wrote a Jackson whole paper that said that money, easy money breeds dangerous risk-taking. Uh, and obviously then 2008 happened where we had like the easiest and most ridiculous money policies that led up to it. And so he's a big fan of believing that you can crush inflation by having inflation targeting and not running the money printer. See the theme here? He argues that QE makes banks addicted to reserves. So the best thing to do is slowly shrink the balance sheet. Don't do things too quickly. You don't want markets to seize up. So even though he kind of seems a little anti- low rates here, my take is he's much more concerned about the balance sheet. Run the balance sheet off slowly. Wash will side with him on that and then we'll win this guy over on low to negative interest rates. Give him one thing, ask for another win-win deal. Jeremy Stein, Harvard guy, actually used to sit on the Fed board 2012 to 2014. Of course, we just lost Berneni to uh Anthropic. He's got to run the real money printer over there, huh? That's where they're running the tits. If you saw my last video, man, who doesn't love ET tits before taxes, interest, and training. We just come up with new stuff every day. It's crazy. Anyway, uh this guy is uh a belief for let's put it this way. This guy is of the mindset that whatever you can do at the Fed, make sure that you have monetary and plumbing stability. So that would be like make like we're okay to hold short-term Treasury bills to make sure there's liquidity in the market. But let's not go buy long bonds because if we go buy long bonds, we artificially drive down the 20 and 30-year bonds yields. We drive up their price. Uh, and we also pump up stocks. And by pumping up values, we're really just pumping up our balance sheet with long-term assets, which we should not do. That's very bad. We should only have a balance sheet made up of short-term bills for plumbing purposes. So, think of this guy as the plumber. Okay? He's just going to keep all all the the water running without things seizing up. All right? That's fine. Then, you've got Karen Dynan. She's a Harvard uh former Treasury chief economist, ex-fed staff. Basically, she's an interesting one because it's just not that hard. Prolow rates and we're going to run the Fed so efficiently that it doesn't run at operating losses, which is a little project 2025ish. Shrink the Federal Reserve and how many expenses we have over here. And we'll um well, basically stop there. She's kind of got to think about her as like somebody who's like, I I run the books. We're going to clean this place up. We're going to lower the cost. No, no more no more green garden. No green roof. No green new scam on the roof of the Fed building. Kill the garden. We don't want your solar or your whale killers, the windmills. We don't want any of that. We want the Fed to spend less. That's basically her. So it really doesn't change anything from a macro point of view. We can kind of almost ignore that. Mvin King, former Bank of England governor, big name right here, launched QE in Britain and then ended up writing a paper about how bad Q is called the end of alchemy where literally blasts QE and how the Federal Reserve is basically addicting economies to money printing. Hates the machine of QE even though he launched QE him. So far, you know, I I don't know if it's obvious, but so far all of these people align with what I feared for Kevin Worsh is that we would, by the way, thank you for all of you who have left comments about Max's duck. He's very happy for that. Um, we won it at Dave Busters. But anyway, um, he's very, how should I put this? See, now I start thinking about the duck and then I lose my train of thought. It's okay. Worsh from day one has always been anti- the money printer. He was talking about fighting inflation and uh uh not running the money printer throughout 2008, 2009, 2010, 2011. And then he quit the Fed because nobody listened to him. People literally said that Kevin Walsh is allergic to data. So what you could see here is he's trying to fix his reputation. Well, I'm going to get this panel of people who are going to provide me the data so that way nobody could say I'm allergic to data and in the meantime I'm going to get what I want which is lower rates because it's my campaign promise to have gotten this job and two no more QE quantit just to clarify QE quantitative easing it's basically when they run the money printer it's not actually a printer it's just a spreadsheet okay we need another couple trillion trillion dollar. Okay. Fed, boom. It's on the balance sheet. Boom. Treasury department gets it. Now they got $2 trillion. What do they do? They do some big coordinated attack with Congress. Stimulus, $1,000 for everybody. You know, new tax cuts and this that or whatever, right? A or lending programs or lending facilities. And that's how it all ends up getting into the economy. problem is it's really hard to discriminate and say we're only going to give it to productive companies or productive businesses or productive people. And so so far all of these people argue the best way to do that is just give people cheap debt when they're capable and they are willing to take the risk of it. You don't need to run the money printer to give it to everybody. Just have low rates. So far, everyone is pointing pretty much in that same direction. Peter Fiser, University of Washington says, "Ran, well, so first of all, he ran the New York Fed uh open market desk, basically where these Treasury purchases happen. Not the biggest fan of printing either. In fact, he's a big fan of making no promises of printing, which is a very interesting line because he's written papers on this as well. actually many years of estim essays attacking quantitive easing and forward guidance both very Kevin Warshi then you have a former central bank of Brazil president they're trying to in my opinion put this guy in because he signals credibility because this guy joined the central bank of Brazil in the 1999 crisis floated the real so you know moved it off a standard and then installed inflation targeting and basically built credibility from the ground up that's pretty dang impressive and that's what Kevin Warsh wants credibility. Remember some of the first people? It was all about inflation dies with Fed credibility. Yeah. Raj Cetty from Harvard. He built a co era real-time economic tracker for private payroll data and other data so policy makers could see what was going on in the economy many weeks before it actually happened, which is useful. sort of that forward-looking data, right? Using AI and using technology and new statistics to figure out what's actually going on in the economy helps prevent you from raising rates and pulling an Allen Greenspan mistake where you raise rates and mark the top of the market and then you crash the market. Nobody wants to crash the market. Certainly not Donald Trump. Doug McMillan, former Walmart CEO, Walmart lifer. Bro, this guy's an inspiration. started in a warehouse, ran the company from 2014 to 2025, and basically he's a big guy around, hey, um, deflation might end up be heading to sore shelves. Now, he said that in 23, so that was sort of before the tariff and Trump shocks of Iran and all that. So, he's a little early, but he's not wrong. And I think that's why Walmart's investing so much in robotics, which also makes Symbotic an interesting play. The problem is you have so much concentration risk at Symbotic. Symbotic's up 3% today, but it's certainly well off its peak. Uh, you know, it's I think Symbotic's usually a buy somewhere between 40 to 50 bucks in that range is sort of a fair price. Although we started pitching Symbotic back when it was $19. It's $43 now, but it's crazy run up to like 874. Not personalized financial advice, but he's probably right. Deflation probably is coming. Uh, and that's why we'll end up having lower rates and we just have to get through these hiccups first. So, he kind of fits right in. Uh, Kevin Murphy, this guy, another Kevin, says that CPI overstates true inflation. What a shocker. And then here we go. Here we go. Mark Andre, Netscape co-founder, obviously venture capitalist, A16Z, big shot in AI, argues that technology is deflationary. Artificial intelligence supercharges it. Super aligned with the Trump administration. This is the guy who says we're going to turn THAT MONEY PRINTER RIGHT back on when poop hits the fan because we want to grow some roses. But this is going to be our AI abundance deflation is coming guy. uh same as the guy uh you know Charles Jones who's a big fan that says look faster productivity growth is going to raise the equal rate but if our leading data says you know and then we have to raise rates but if our leading data says hey you know the economy is actually slowing then these people are all going to be on board with zero rates and going to be the guy who's like no no run the money printer because he's a venture capital guy but he is going to love love love the cheaper debt. No freaking doubt about that. Uh then you even have uh you know you've got one more person on there. You've got Asha Sharma, product operator uh over at uh Meta as a VP and Microsoft's AI business. This was really interesting. So this person has zero monetary record. Kind of like Andre. Uh probably a big fan of Well, we're just an AI hire. and AI is deflationary. So what does this mean? In the short term, all these task forces are supposed to report by December. We're probably going to kill the dot plot. We're probably going to see liquidity slowly drain out of the system. The suckening continues under Worsh. And long-term, you know, between now and 2032, I personally think rates continue to slow bleed to zero. Not saying there'll be a big crisis. In a big crisis, they'll instantly go to zero. But rates will slowly begin to and then bleed to zero once we get through the Iran shock and all this tariff inflation stuff, which still isn't all the way through the economy. Uh, in fact, some say only 50% of ter tariff inflation has actually gotten through. Uh, and the worst thing to know about all of this is that if you have a lot of debt or you think you're going to be saved with debt in this next crisis, you might be horribly mistaken. I hate to say that. I think leverage holders are going to be boiling in a lobster pot of hell that you do not want to be in. So, make sure you get your legs out of the pot of debt because your boy Kevin's going to have spent 10 years telling you to get out of debt as fast as freaking possible. And this worst guy should be grabbing you by the shoulders and shaking you until you realize it. It's not good. It's not good. But, uh, we'll see. So my take is as a result, bottom line out of all of this, the next crash will really suck because they're not going to run the money printer. It will literally be like the great reset. Anything you can do to borrow less, fewer renovations for your home, fewer credit lines, don't buy a new car, you know, whatever you can do to relax on debt over the next 5 years will you will probably be extremely thankful in the very long term for that. So big fan, be careful. But the war regime regime in my opinion reiterates rates aren't going up in the short term. We'll kill the dot plot. liquidity is going to slow down and it will slowly start grinding down the balance sheet. Unfortunately, that also kind of can have the effect of softening how fast asset prices can go up. But ironically, by not hiking rates yet, we're actually pumping up stimulus before we actually like before the pain hits. So remember this, in the short term, Kevin Worsh going silent probably means no rate hikes, which is bullish. But if poop hits the fan and Kevin Worsh goes silent, then it turns bad really fast. >> Why not advertise these things that you told us here? I feel like nobody else knows about this. >> We'll we'll try a little advertising and see how it goes. >> Congratulations, man. You have done so much. People love you. People look up to you. >> Kevin Papra there, financial analyst and YouTuber. Meet Kevin. Always great to get your take.