6 April 2025

Here is this week’s update from Dr. Matt:

Geo-Politics:

Tariffs. WHY?
This is not just about protectionism and trying to reset the infrastructure of jobs in the USA… there is much more to it.
You see, of the near $37 trillion in national debt, $6.5 trillion is due by June.
By paying a lower interest rate (each one one-hundredth of a percent costs $1 billion – called a basis point), the refinancing timing of the rates is critical
And, with all of these trade/tariff wars, the 10-year Treasury Bill rate has dropped from 4.2 to 3.9 percent, a 30-basis point drop.
Trump hinted that he’d like to end the FED.
It is actually not impossible to do this. All we have to do is to manually control T-Bill rates AND how much money we print/have out in the market.
By having all these tariffs, people are flocking to “safer investments.”
These are traditionally gold and T-BILLS… And by having lower rates on T-Bills, the debt is getting refinanced… and when the demand is higher on T-Bills, the rates go even LOWER.
Yes, this doesn’t solve the root cause (too much national debt) but is does push out the time before economic collapse.

You may have head that countries that are affected by these are tagging on “RECIPRICAL TARIFFS”.
Well, the truth is, they are just JACKING UP EXISTING TARIIFS MORE. For example:

• China’s incoming tariffs are 67%, while ours are only 25%
• Vietnam is 90%, while we are up to 46% (major clothing supplies)
• Japan is at 46%. We are 24%
• India is 52%. We are 26%

The list goes on and on. You get the picture.

You see, the FED is in a panic over this. Powell is a Democrat. He was there for BIDEN.
As a reminder, the FED is a private company, owned by the collective owners of the 12 FED branches… these are the descendants of the ultra-rich from the industrial revolution. Yeah. Seriously.
Powell is already blaming the forthcoming recession on Trump, even calling it the Trump-cession.

Trump needs THREE things to pull of this miracle: lower borrowing costs, tighter spending (DOGE targets reducing government spending by $4 billion a day), and GROWTH.
Tariffs help with 2 of the three.
He’s banking on more quality USA jobs/more USA factory activity.

With all this, there are several points that I should being up about the GLOBAL impact…
We have been the main consumers of Chinese products for several decades.
With that, WE are financing THEIR country... the #1 industry in China is NOT manufacturing, it is BANKING.
The CCP (Chinese Communist Party) has artificially pegged their currency to the USD for decades and this has affected the globe.

Considering that tariffs include Europe, it appears the USA is distancing itself from NATO countries, and maybe NATO itself.
With all of these cuts, why did the USA just give the Philippines $5.5 billion for military aid?
Easy, there are indicators that the CCP is now a threat more than ever.
According to the Philippine government, “war is looming”.

In case you missed the liberties enjoyed by Americans is decaying in other countries… the UK has begun to arrest individuals for “offensive online posts.” (Averaging 30 arrests a day)
However, over the last few years, the decay of civil liberties is creeping upon us… we can never go back.
It either gets worse or the liberties hold… I will let you decide…

The Stock Market Watch:

The stock markets are now at a 20% drop over their peaks in the last three months... most recessions are 25 to 40%. So, if we have seen the bottom of this, we could call it a Trump-cession… and that would be a compliment.
The crash just last week was WORSE than the week after 9/11, to give you some perspective.
We WERE due to have a HUGE recession (we still might), but for now, this is a VERY SOFT LANDING, considering we were poised for a major crash.

Given this, the definition of a recession is “2 consecutive quarters of a decline in the GDP.”
We have ZERO (quarters Q3 and Q4, 2024) right now… but the first quarter of the year’s number are due on the 30th. It is expected to be a serious decline, giving us HALF of a recession.

If an official recession triggers, who’s fault is it? (Feel free to share this with your ‘Trump haters’.)
I will tell you, as an MBA, please understand that it takes AT LEAST TWO YEARS TO CREATE THE MARKET CONDITIONS THAT LEAD TO A RECESSION.”
This is SIMPLE Economics.

The ‘Inversion chart’ is the key and it takes years for a complete ‘cycle’ of ups and downs (consider the white spaces in the below… the grey bars are the recessions, and the white spaces are the times between the recessions):
https://fred.stlouisfed.org/series/T10Y2Y

As soon as the chart goes from negative to positive (climbing back up)… and gets over 0.50%, then a stock market correction/recession is imminent.
Yet, people are blaming Trump, who has been in office for just three months.
Of course, the true cause has to be the FED and Biden (not really Biden, since most are in agreement that he didn’t run the country).

Metals/Crypto Market Watch:

With sanity being restored, metals dropped back to their (proper) floor in the last few days. It appears tariffs don’t cause death after all. Cryptos got caught in the downturn last week, too. Lots of eyes watching this to see if there is a relationship (between stock market corrections and cryptos). There is just not enough history to show a ‘direct’ relationship (where both go down or up) OR an ‘inverse’ relationship (where if one goes up, the other goes down) Time will tell. DGB seems to be hit less than others. XRP made a strong movement back up today, while stocks stayed mostly flat.

Other News:

The EU continues to hold fast (and grow) policies that are NOT USA friendly. This makes perfect sense due to the tariffs (see chart below). They have been enforcing tariffs against us, and now they’re mad we did the same…hmm. https://www.lpl.com/research/blog/five-key-tariff-takeaways.html

The Usual Metrics (Layoff Tracker, Bank Health, Debt Clock, Inversion Chart, & CBDC’s gone LIVE):

March showed a serious climb in new unemployment claims nationally. Up from 4.0% to 4.2%. Two companies folded in Puget Sound, AMR (ambulance in Centralia) and Cornish College of the Arts (technically, CCA was sold to Seattle U). This has an impact of up to 550 employees. We’ve added one more to the list of ‘questionable bank health’ (rated under 4 stars). We are up to 8. But the credit union list is down to just 1… someone sold their debt and merged with another (I don’t track the names). There are no new CBDC changes. The EU is still on pace to go live in October. As the month progresses, the indicator updates throughout, culminating in the GDP numbers due on the 30th. THAT one could lead to a serious stock drop.

What Would I Do About All This?

(This is NOT financial advice, but it is what we did in our house…)

There is no better time than now to try to get out of debt.
Visit www.daveramsey.com for a plan.
If you need, just reply back and I can guide you.
We got out of debt using a slight variation of Dave’s plan. But for the most part, we followed it pretty closely.
We paid off highest interest rates first (instead of the lowest balances first).
The more cash you can free up AFTER debt is paid, then you can ‘go shopping’ for bargains right after the drop happens.
Based on what we’ve seen the last couple weeks; this could be your last chance to buy some physical silver or gold before their prices spike up.