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In this insightful episode, John Rush discusses the strategic importance of Greenland in global geopolitics alongside former Ambassador to Denmark, Alan Leventhal. They explore why Greenland and the Arctic hold pivotal roles in U.S. national security, especially with rising global tensions. From potential Russian, Chinese, or North Korean threats across the Arctic to burgeoning sea routes, tune in to understand why this area captivates U.S. defense interests.
SPEAKER 10 :
This is Rush to Reason.
SPEAKER 11 :
You are going to shut your damn yapper and listen for a change because I got you pegged, sweetheart. You want to take the easy way out because you’re scared. And you’re scared because if you try and fail, there’s only you to blame. Let me break this down for you. Life is scary. Get used to it. There are no magical fixes.
SPEAKER 10 :
With your host, John Rush.
SPEAKER 05 :
My advice to you is to do what your parents did. Get a job, sir. You haven’t made everybody equal. You’ve made them the same, and there’s a big difference.
SPEAKER 13 :
Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world. You don’t know what it is, but it’s there. It is this feeling that has brought you to me.
SPEAKER 09 :
Are you crazy? Am I? Or am I so sane that you just blew your mind?
SPEAKER 06 :
It’s Rush to Reason with your host, John Rush, presented by Cub Creek Heating and Air Conditioning.
SPEAKER 17 :
All right, it is hour number three, Rush to Reason, Denver’s Afternoon Rush, KLZ 560. Our next guest joining us now, former ambassador to Denmark, Alan Leventhal. Alan, welcome. How are you?
SPEAKER 18 :
I’m fine, John. Delighted to be with you this evening.
SPEAKER 17 :
It’s great to have you. This topic of Greenland is huge, as you know, and we saw lots of things happening here in the past couple of weeks. Some of that’s been overshadowed now with some of what’s going on in Minnesota, of course. But I guess to start with, I’ll ask you, why is Greenland and the Arctic itself so important to us as the United States of America?
SPEAKER 18 :
Well, Greenland, two-thirds of it sits above the Arctic Circle. John, I don’t know the last time that you looked at a map of the Arctic.
SPEAKER 17 :
Just the other day, because I wanted to know exactly what you just said. So, yep, most people don’t know that, but I looked and checked it out.
SPEAKER 18 :
I’m sure you see the prominence of it. It’s the largest island in the world. If you put it off the east coast, it would stretch from northern Maine to southern Florida. It’s enormous. And it’s strategically located. And we have a base in the northwest called Bidufeek. We’ve had there since 1951. And it’s of critical importance seeing planes or missiles that would be coming from Russia, China, or even North Korea across the Arctic towards the United States. So it’s a very important location.
SPEAKER 17 :
All right. So and again, I don’t know all of the inner workings of the current White House and how things work. And I’ve said it many, many times. I love Donald Trump, but there’s times where I probably would message and do things maybe a little bit differently than he does. But at the end of the day, he still gets things done. And I guess at the end of the day here, did we get enough or is he getting enough out of what we need in Greenland? And is his goal still to somehow try to acquire it as us as a country?
SPEAKER 18 :
Well, he’s right, and the administration is right to be focused on security in the high north. I talk about missile or plane attacks.
SPEAKER 15 :
Right.
SPEAKER 18 :
The Arctic is also warming at four times the rate of the rest of the planet. So you’re going to see Arctic routes open to Asia. It’s going to cut the distance in half. You’re going to see a lot of activity up there. You’re going to see mineral resources on the seabed that are available. So I agree with the priorities. The challenge is… is we already have an agreement with Denmark to operate this base plus any other bases we want to operate. And we’re dealing with one of our closest allies and a NATO ally. So from the beginning, I didn’t understand why we just didn’t work within our existing framework and the agreements we have to add whatever we need.
SPEAKER 17 :
Yeah. And you know what? You just said something that I kind of after reading more about it and learning more about what was going on and some of the alliances that we already had, I was curious of the same thing. And I’ll be quite honest, Alan, I don’t have a good sense of why we didn’t do that. Do you?
SPEAKER 18 :
Well, that’s really for the administration to address. But they are one of our closest allies. And the problem was, when the president was going into Davos, before he announced that he was not going to use military force, and he was not going to impose tariffs on European countries that oppose our military force in Greenland, I felt that I was standing on top of a cliff, looking over into an abyss, and I didn’t know what was going to happen. Because if we invaded Greenland, which is part of the NATO umbrella, it’s part of the kingdom of Denmark. Denmark’s a founding member of NATO. NATO would no longer exist the way it does. And you know who was happy about that? The foreign minister of Russia, Lavrov. He said that if the U.S. invades Greenland, that justifies Russia taking Crimea from Ukraine, which they did in 2014. And what would China do in Taiwan? And Taiwan’s a very important place for the chips they make.
SPEAKER 17 :
Good point. Good point. No, good point. Now, here’s the other thing I think. I, and again, I don’t know Donald Trump. He’s not a personal friend of mine. I don’t have any interconnections, anything along those lines. So I have no clue what I’m going to say next as far as how true this is, Alan. But at the end of the day, I don’t think he ever planned on sending any kind of troops in. I think this was a lot of posturing on his part to get the needle moving in the direction that he wanted. Although I go back to what you said a moment ago, we had the structure in place. Why even do any of that in the first place?
SPEAKER 18 :
Right. And if we want to change it, the Danes will change it. The Danes love America.
SPEAKER 15 :
Right.
SPEAKER 18 :
You know, people talk about NATO and people say, what does NATO do for us? We’re in NATO because it’s our self-interest to be in NATO.
SPEAKER 17 :
Yeah, I think even the head of NATO had a nice speech on that just a couple of days ago, really admonishing the United States of America, but then also saying that, you know, we need them as much as they need us. And I get it. And I think there’s a lot of people listening that would agree with this, Alan. Yeah, we pretty much fund NATO, no doubt about it. We are the superpower. But on the same token, we get things out of NATO as well. So at the end of the day, as much as there are times, me personally, you wonder, why are we in it? At the end of the day, you have to be.
SPEAKER 18 :
And the oceans, you know, it may be long distances, but, you know, supersonic jets and missiles… They cover that distance very quickly. It doesn’t protect us the same way it did in the past. So we need to be protected. And NATO is the most powerful military alliance in the history of the world, John. It’s protected for 75-plus years. It’s protected a billion people. A third of those are Americans.
SPEAKER 17 :
That’s right. No, I fully agree. And I, again, I can sense sometimes the frustration maybe that Donald Trump has with NATO feeling like in the last time he was in office, he made them step up and pay more of their fair share, which, by the way, I’m in favor of. I think these countries get, you know, in a lot of cases, they get a free ride from us. And that’s changed since he did, you know, since he did that in his office. first term, and maybe, you know, all in all, Alan, maybe this was his way of waking NATO up to realizing that, wait a minute, time out, you know, we need Americans as much as the Americans need us, and we need to make sure we further this alliance, and let’s strengthen it, not diminish it.
SPEAKER 18 :
Well, you know, I take the President at his word when he says something, so that’s why I was so concerned, but if you look at Denmark, Denmark has really stepped up in a huge way. They’re meeting their NATO commitment, and not only that, They’re the fourth largest provider of military support to Ukraine, right after the U.K., a country of less than 6 million people. Because when you’re in Denmark, my residence was in Copenhagen. Copenhagen to Kiev is like the distance of Boston to Chicago. It’s like next door. And there’s a great fear of what happens if Ukraine falls and what country in Europe is next. So there’s great concern in Europe. And European countries like Denmark are stepping up in a big way.
SPEAKER 17 :
Yeah. And again, I appreciate you being on. You bring a lot of insight into this that, you know, frankly, I for sure don’t have. And again, I think that the question that still remains and it’s unanswered and we may never get this answer is, you know, why didn’t we, the administration currently, just work inside the structure that was already set in place? And again, Alan, I don’t have that answer. I don’t know why.
SPEAKER 18 :
I don’t have the answer either, John. I’m just pleased that the president said he would not use force. He also took off the threat of the tariff.
SPEAKER 16 :
That’s right.
SPEAKER 18 :
And we just have to get this completed. There’s been damage done in these relationships, but we’ve got to move forward.
SPEAKER 17 :
Agreed. I appreciate it very much. Alan, again, thank you so much for joining me. Very insightful. I wouldn’t have learned some of this without having you on, and I appreciate it greatly.
SPEAKER 18 :
Delighted to be with you, John. Have a good evening.
SPEAKER 17 :
Have a great evening. I appreciate it. We’ve actually had Alan on in the past, a very smart guy when it comes to some of these foreign affairs and different things that we’re involved in on a worldwide basis, and he’s been seeing that stuff firsthand, as you could just tell. Dr. Scott, coming up next. Now, if you’re looking for a doctor that thinks like we do, in other words, thinks like you do, wants what’s best for you and your overall health and your longevity, talk to Dr. Scott today, 303-663-6990.
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SPEAKER 17 :
This is Rush to Reason on KLZ 560. All right, was sent a text message about National Shutdown Day on January 30th, which I didn’t even know what that was until I just looked it up because, frankly, I don’t care. Dumb. Dumb. Again, another dumb idea. Sorry, it’s a dumb idea. At the end of the day, what are you proving? And who are you really helping when it’s all said and done? This is a, you know, activists are calling, keyword activists, no work, no school, no shopping. Okay, so don’t go to work, meaning you’re going to really hurt your employer who’s trying to irk out a living. No school, so whatever. I really care less about that one. Nobody’s going to school on a Friday. Well, maybe on a Friday, but no, sorry. Yeah, Friday, because tomorrow’s Thursday, so it would be Friday. Whatever. That one I don’t care about. No shopping. OK, so again, you’re going to hurt merchants nationwide for your dumb cause. And I’m calling it a dumb cause because you’re going against ICE, who’s doing a job deporting individuals that are here illegal. And their first line that they’re going after are those that are criminal illegal aliens. I get it. Please don’t correct me. I get it. Every illegal alien is already a criminal. I understand that. I’m talking about the hardened criminals that are part of cartels and so on. That’s who they’re really going after first. So what you’re telling me is I shouldn’t shop that day so that I can somehow protest ICE. Because I don’t want them doing their job? When I explain it that way, do you understand how stupid that sounds? I’m going to not shop. I’m going to hurt merchants. I’m not going to go to work, so I’m going to hurt my employer. Also, I can help support a cause that’s deporting hardened criminals that shouldn’t be here in the first place. Again, I said that slowly, so maybe it’ll sink in. Do you realize how stupid that sounds? That’s got to be one of the dumbest things I’ve ever heard. And again, at the end of the day, what are you going to accomplish? Nothing. Zero. I’ll go as far as to predict this. Everything will be business as usual on Friday. There will be a few knucklehead activists that don’t go to work or don’t shop or whatever. More power to you. Again, it’s free will in this country. Do whatever you want to. More power to you. But you’re dumb in doing so. You’re not going to accomplish anything when it’s all said and done. No, to answer this texture’s question, I’m not going to participate in any kind of national shutdown on Friday. I will be here working. I will be on air. I will most likely go to dinner and spend money afterwards because that’s what I do on Friday nights. Not sure what I’ll do prior to that, but if I feel like stopping and buying something on the way here, I will. I’m not changing my life at all because some knucklehead activist says I should not do anything on January 30th. And, yes, I call knucklehead activists exactly that, which, by the way, I call them that on both sides of the aisle, Republican and Democrat, left, right, whatever. I’ll call activists that on both sides. I hate that term, by the way. I really do. It drives me crazy. But it is what it is, and it’s what those type of individuals are labeled and, again, whatever. But, yeah, am I participating in January 30th? Absolutely not. That’s laughable. Why would I? Why would I? Somebody also said that, you know, I said it’s okay to give the ICE agents a pass. No, that’s not what I said. I said I’d give some grace to officers of the law, including ICE agents, because in split seconds they’re making decisions that, frankly, I’m not going to make. Neither are you that are texting because you’re not bold enough to go do what they’re doing. I’m not bold enough to go do what they’re doing. And yet you’re going to be an armchair quarterback and criticize what they do do. I get it. That’s the American way. Let’s armchair quarterback everything and criticize what’s going on, even though you have no idea how it works and you’re not a part of it. In fact, in some cases, you’ve probably never even fired a gun. You have no idea how that works. And you’ve never had to make a split-second decision on who you’re going to shoot at based upon your own life. See, folks, a lot of you don’t think through all of this correctly. You’re not thinking through all of the things that are happening at that point in time. It’s easy to go back and look at some scrambled video that some guy with a cell phone that couldn’t hold it still took and then try to make judgment calls on what happened or what should have happened. I’m not doing that. I said that on Monday. I’m not going to do that. I’m not going to base my opinion off of some cell phone that some guy couldn’t even hold still because you can’t see anything. And any of these commentators, CNN and the likes that are claiming that they’re dissecting that video, they’re complete knuckleheads. They have no idea what they’re doing because there’s nothing to dissect. It’s a crappy video at best. There’s nothing to see. I mean, if you don’t have a straightforward video all the way through, by the way, like we had with Renee Good, it’s choppy at best. So, no, I’m not going to participate in any kind of a national shutdown day on Friday because, and by the way, if it were the opposite and the Republicans had some sort of a national, you know, the conservatives had some sort of a national shutdown day, would I participate in that? No, I wouldn’t because I hate those things. I don’t even do boycotts. You guys all know that. Anybody that listens to me knows I don’t do those things. I think they’re stupid. I don’t think they accomplish anything at the end of the day. The free market typically will drive itself, and if somebody’s not doing something correct, for example, I’ll use Target as an example. When they were doing their big, huge thing about letting transgenders into women’s dressing rooms and so on, yeah, they had a lot of backlash for that. There was a boycott from our side against Target. I didn’t participate. Now, I’m not a Target shopper for the most part anyways, but at any rate, no, I didn’t participate in that, nor would I. I don’t care about those things. I don’t think at the end of the day it really matters. Now, if you want to just boycott them altogether, not on a particular day, but you just don’t want to go there because you don’t like that store’s policies, that’s your free will. Be my guest. There are certain people that won’t shop at certain stores because of whatever. I saw a good interview the other day by the owner of Shields, which I did not know that Shields was a Christian-owned company. Shields is a company. There’s a store up in Loveland. I think they’re going to build another store here in the Front Range area, and it’s a Christian-owned company. They’re closed, I think, four days out of the year. It’s a sporting goods store. They sell guns and ammo and outdoor gear and all kinds of stuff. And it’s a big, huge store up in, I think it’s Loveland. And my kids keep telling me I need to go up. I just haven’t had time to do it. And I didn’t know this until watching a video the other day. It’s a Christian-owned company that interviewed with the owner of. And even the owner said, you know what? In this country, you have freedom of choice. You can shop anywhere you want. And no, not every customer out there is our customer. You come in during the Christmas season, you’re going to hear Christmas music. You’re going to hear Merry Christmas at our cash registers and so on. There’s other things that will be Christian-themed at different times of the year in our stores. It doesn’t mean you have to be a Christian to work here, but it’s a Christian-owned company, and we’re going to have Christian-themed things that happen throughout the year. And if that somehow offends you as a customer, then don’t shop here. And you know what? I appreciate the owner saying that because he’s spot on. You don’t have to shop there, but if you want to, go for it. And on the same token, there might be people that shop there versus someplace else because they like that standard. Okay, great. It’s America. That’s the way it should be. And you ought to have that right to do so. But I, personally, I’m not that kind of a shopper. I mean, I’ll shop at Shields. I’ll shop anywhere else. If there’s a product I need and a company has it, I’ll buy it. I’m not, even as a conservative, I’m not that individual that gets picky about where I’m buying something. Now, if it’s an all-out awful place and you know it and I can go buy that product somewhere else, will I? Of course I will. That’s a different scenario. But in general, do I pay a ton of attention to what the corporate policies are of certain companies and so on? No, folks, I don’t. I don’t care. I really don’t. Honestly, I don’t care. Does the product work? Does it work for me? Do I get out of it what I need? Is it cost effective at the end of the day? That’s what I look at. Now, if there’s two products identical to one another and one’s coming from a really great company that I know I can stand behind and they have the same values that I have and the other one doesn’t, will I buy from the company that has my values? Of course I will. Of course I will. But am I going to spend a bunch of research time trying to figure out who that company is and whether I should shop there or not? No, folks. In fact, unfortunately, because I’ve interviewed these people in the past, there’s been websites put together over the years showing you scores when it comes to things I’m talking about among retailers, places to shop. And sadly, they don’t last because people don’t use them because, honestly, most people like myself just don’t care at the end of the day. And I’m sorry, and some of you are going to criticize me for that, but I just don’t care. I’m shopping for what I need and what works in my life at that given point in time and what’s convenient for me, and that’s what I’ll do. That’s why I use Amazon a lot, and a lot of people hate Amazon. I don’t. I like Amazon. I like their free delivery. I like Prime. I like what I get from them. I like the variety. On and on we go, and I don’t like going to stores because it takes time. And typically it’s a higher price, so I’m an Amazon guy. So, no, I’m not going to boycott or do anything on January 30th. I think it’s the dumbest thing ever, to be honest with you. I think at the end of the day, it’s going to accomplish zero. I highly doubt that you’ll see any kind of a blip in even retail sales and other things going on on Friday. But, hey, if you want to boycott, you know, do your thing, you know what? It’s America. You’ve got the right to do whatever you want to. But here’s my point also. Don’t force anybody else to do what you’re doing. If you want to go do that, then fine. Go for it. But don’t force anyone else to do the things that you’re doing because that’s not fair to them. You do you, and that’s my motto. You do you, and I’ll do me. And at the end of the day, we’ll get along just fine. Roof Savers of Colorado coming up next. Again, one way to do you is to make your roof last longer. You can do that with the Roof Max product, and that can be put on when it’s 40 degrees or above, which right now we’ve got in Colorado. 303-710-6916.
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SPEAKER 17 :
All right, I had a couple of text messages and a caller call in. Shields is in Johnstown, not Loveland, Johnstown, which you get up that direction, it kind of all… I know they don’t necessarily run together, and I’m not trying to step on any toes, but for those that are driving, it may look like things run together from really, I don’t know, Wellington all the way down. You kind of go to one exit after another after another. But Johnstown is where that’s at, and it’s not far from the Buc-ee. So if you’re up in that area, you’ll see it. And for some of you that maybe want to go shop and check it out, you know what? Be my guest. I’ve also had several others. You guys are really funny, by the way. Several others texting in talking about how Friday will actually be your day to shop because of what I talked about earlier. So you’re going to do just the opposite. Scott Garlis joining us now. Scott, how are you, sir? Hey. You got them well. How are you? I’m doing very well. Bent Pine Capital. All right. One thing that I had to ask you straight up. Someone was saying, okay, what time is Scott going to go on? I’ve got some questions for him, so I’m going to shoot these at you. I didn’t tell you about this on the front side, but let me throw these at you. There are the naysayers out there. running around talking about, you know, the great reset is upon us. Dollar is going down. The stock market’s going to crash at any day. I mean, the reality is these guys are zeroed in on this like no tomorrow. And, Scott, honestly, I’m not trying to be, you know, pie in the sky, but I just don’t see that coming.
SPEAKER 19 :
You know, I don’t either. In terms of the dollar, you know, that’s like Jeffrey Gundlach, big money manager, he focused on bonds and value. He’s been beating the drum on a weakening dollar. At the end of the day, if you’re a software or hardware company in the United States, which is one of the industries we dominate, if the dollar is dropping, Basically, you’re going to sell more of your goods overseas.
SPEAKER 17 :
Right. And by the way, and I was talking about that with my son earlier today, Scott, and kind of explaining that, yes, when the dollar drops, there’s pros and cons to everything. And the pro to the dollar dropping is our exports go up. You feed more money into the economy from overseas because… those dollars come in more than they would otherwise. Yes, it does hurt us in other areas, and if you’re a traveler and you’re going someplace else and our dollar’s not as strong as it is against the peso or the euro or whatever, yeah, those things kind of hurt, but at the end of the day, it does funnel money into the economy.
SPEAKER 19 :
Yeah, I mean, look, you know, one of the other things you’ve got to think about, too, and we could probably talk about some of this in a few moments, too, but what’s going on with the Federal Reserve right now? You’ve been through, you went through that period of crazy rate hikes. And then we’ve cut by 175 basis points over the last two years. And we’re on pause right now. But if you look at all the other central banks out there, they have been way more aggressive than we have in terms of cutting interest rates. So basically, the way you want to think about this is the dollar reflects that value of the interest rate because of where the whatever central bank’s target is. The Fed is still cutting while everybody else is sort of stabilized. So as the Fed is still in easing mode, the dollar’s going to get weaker versus other currencies. It was so strong a couple years ago because the Fed hiked way more than everybody else. That’s right.
SPEAKER 17 :
It ebbs and flows is what you’re saying, right?
SPEAKER 19 :
That’s exactly right. And we haven’t even gone back to levels to where we were years ago. So The other way I look at it, too, if you look at the stock market, traditionally, when the euro is strengthening and the dollar is weakening, that tends to be very good for risk assets. So, stocks are risk assets that are priced in dollar terms. They tend to go up when that happens. Yeah, again, I’m not worried about that.
SPEAKER 17 :
No, and by the way, I had basically the same answer. Things ebb and flow. No, I’m not worried about it. No, I don’t see a huge crash on the horizon. And some of that, for those that are listening and heard my comments on money, went to Barrett-Jackson auto auction end of last week, Scott. And again, you’re there, and I get it. There’s a lot of folks there that are just showing off. They’re trying to outdo the next guy and so on. But at the end of the day, And there’s some people out there criticizing the auction itself because they feel like it screws up the car market. And I, by the way, disagree with that. What it really shows at the end of the day is how much money is actually out there and how much disposable income some folks have. And anytime I’m there at those types of events, Scott, and I look at that money that’s flowing, that tells me that, yeah, no, there’s no crash coming.
SPEAKER 19 :
I mean, look, you know, again, if you go back to 1928, the S&P 500 on a total return basis, which means you’re reinvesting dividends. It averages a return of 9.5% per year, and that’s through the Great Depression, the financial crisis, all sorts of terrible periods. But over time, 9.5% per year means if you keep dividend reinvesting and you stay long-term, you’ll double your money every 7.2 years. So, you know, again, I look at the – to your point of ebbs and flows and cycles – you’ve got to be long-term. And sure, so, you know, people know that more people have money in, you know, 401Ks than they have before, and so they’re more tied to the stock market. And, of course, they’re going to say it’s going to crash because it’s going to scare you, it’s going to get your attention. And the more they get your attention, guess what? They’re going to keep pounding you over the head. But, again, we’ve got 100 years of history that if you maintain steady Eddie, you’re going to do very well. So… Yes, there are going to be times when the market pulls back, but over the long haul, you’re going to be fine. I wouldn’t worry about it. Most of the guys who are saying that kind of stuff, they’re saying it because if they wind up being right, They’re going to be like, I told you so. And they’re going to tell you for the rest of their lives that they were right.
SPEAKER 17 :
Well, and one other thing I want to add to that, too, for everybody listening. Typically speaking, not always, but you know this better than I, Scott. Typically speaking, these are guys that have some sort of an in on, you know, precious metals or something along those lines. Because the more scare they push, the higher gold, silver, things like that go. And I’m not wrong in what I just said.
SPEAKER 19 :
That is exactly right, because they know that if people are panicked about the stock market, oh, my God, I better go put my money in precious metals. So, yeah, look, precious metals are on a tear. It’s amazing. And God bless people that are invested in them. At some point, they’ve really run. They’re probably going to give up some of those gains, too.
SPEAKER 17 :
I agree with that. All right, talk about the Fed, Bank of Canada, some things that are happening there. Meeting tomorrow, or meeting today, actually.
SPEAKER 19 :
Yeah, meeting today for both. So let’s start with the Bank of Canada. Basically, the Bank of Canada left interest rates unchanged. But what their governor, Tiff Macklem, said, the big takeaway is he’s not – the economic outlook globally is becoming more uncertain because of geopolitical tensions. And they said they’re not really sure which way rates are headed next. So based on what he had said in the past in a similar vein, pretty much that they’re probably getting cut is the next way they’re going to go. Another comment he did make that was interesting was that the tariff situation never played out like they thought it was. It was never the pressure they thought it would be. So they had increased confidence in their economic growth predictions, which were about 1.5%.
SPEAKER 17 :
Which, and that’s Canada talking, which, by the way, I talked about this even a little bit yesterday. Not saying that that’s bad or anything along those lines, but no offense, Scott, 1.5% doesn’t even sustain an economy.
SPEAKER 19 :
No, that’s not great.
SPEAKER 17 :
I mean, no offense, that’s about half of what it ought to be. Yep, probably. So, anyways, good luck to Canada. I mean, reality is it’s our friends to the north, although of late I’m not sure how friendly they are because they’re still trying to make deals with the Chinese, which would be a very bad move on their part.
SPEAKER 19 :
Yeah, I mean, I think a lot of this, what Carney’s trying to do is, Carney’s trying to get the best deal that he can with Trump right now, I would assume.
SPEAKER 16 :
Yes, I agree.
SPEAKER 19 :
Because they do so much business with the U.S. and they want a good deal with the U.S. They lost a leverage point with everything that’s going on in Venezuela right now.
SPEAKER 16 :
That’s right. That’s exactly right.
SPEAKER 19 :
Yeah, and so he needs to find a new form of leverage to come back and be able to get what he wants out of negotiations. That would be my guess.
SPEAKER 17 :
And what he doesn’t realize, and you and I do, what he doesn’t realize, though, because he’s not very smart in this area, he might be smart in other areas, but making a deal with China is not going to get a better deal with Trump in the U.S. In fact, it’s going to screw it up.
SPEAKER 19 :
Excuse me.
SPEAKER 17 :
You’re fine.
SPEAKER 19 :
Yeah, water went down the wrong pipe.
SPEAKER 17 :
No, you’re all right. Take your time.
SPEAKER 19 :
Yes, yes, you’re right. It’s going to… Yeah, you’re better to talk softly and carry a big stick.
SPEAKER 17 :
Okay, so back to us here in our Fed. I didn’t see the outcome of the meeting. I’m assuming rates stayed the same because I didn’t see any big announcements, meaning nothing probably happened. And did they signal anything, I guess, of the other question?
SPEAKER 19 :
No. So the takeaway for me was, yes, they left rates unchanged. A lot of the headlines said they didn’t give any indication of the next time they’re going to cut rates. I would surmise that Jerome Powell is not going to cut rates again before he leaves office.
SPEAKER 16 :
I would say that’s correct.
SPEAKER 19 :
We have four months until that happens.
SPEAKER 16 :
Yeah, I agree.
SPEAKER 19 :
But what I did think was interesting was Powell said the mandate between employment and inflation is more in balance again. You know, he still has been, Powell has been a big one saying, and nobody really pays attention to this, like, hey, look, the effects of inflation are going to ease going forward. He’s been saying this for a while, despite all the drama going on there. But basically, he just said, what people aren’t thinking about is we had really high inflation numbers back in, CPI numbers anyway, Back in January and February of last year, the current rate, I believe, is off the top of my head, 2.8%, 2.7%. Yeah, that’s right. 1.1% of that number comes from last January and February. So those numbers are going to start to roll off. I believe over since like the year 2000, CPI has averaged about 0.3% growth in the month of January. So if you have… that 0.7% number fall off and a 0.3% number take its place, annualized inflation growth could drop to 2.3%. when those numbers come out next month. Does that make sense?
SPEAKER 17 :
Yep. No, I hear you. I fully understand. And I think, and you tell me what you think along these lines. I get Fed’s not going to do much. Jerome Powell doesn’t want to do anything. I fully understand that. That’s not going to happen. You and I have said that pretty much all along. In fact, the rate cuts that we’ve got are definitely going to be it for Jerome Powell because he’s got his own agenda. But I do believe that and this is where I’m going back to what we were talking about a moment ago with the Great Reset. Once you get a new Fed chair, and I’m going to talk about that with you in just a moment, but once you get a new Fed chair, watch out, because rates are going to come down, and the economy is going to just expand like no tomorrow.
SPEAKER 19 :
Yeah, I would certainly think so. Again, I mean, if we see a January annualized inflation number of 2.3%, there’s a chance Powell might be forced to do something, because… Again, and then if you have, let’s say you have 0.3% or 0.2% number coming in February. I mean, inflation has been running about 0.2% per month over the last six months, more or less. You know, you could have a 2% number annualized by the time we hit February or March, even. I mean, that would be… The Fed has said, if we get close, they’ll start cutting before we get close.
SPEAKER 15 :
Interesting.
SPEAKER 19 :
I mean, that would be a shock. And the media… I don’t think a lot of people in the markets are prepared for an even close to 2% inflation number. I think that would come as a big shock.
SPEAKER 17 :
And by the way, I don’t think that you’re wrong in somewhat predicting that. I could see that potentially happening, because to your point even earlier with what the comments were from Canada and others, the tariffs haven’t done— what everybody predicted they would. Now, they did what I predicted they would do, which was literally absolutely nothing at the end of the day, because there’s enough room in all of that, including other things that could happen, which did, to not allow a lot of inflation. So at the end of the day, we just haven’t seen it, Scott, and I don’t think we’re going to.
SPEAKER 19 :
Jerome Powell even made this comment at the end of his press conference today, which I thought was interesting. He said, you know, our predictions were right, except… the tariff inflation we thought was going to show up never materialized.
SPEAKER 15 :
Right.
SPEAKER 19 :
Because the tariffs that were actually put in place were way lower than we ever thought they would be.
SPEAKER 17 :
Well, and the other thing he’s not saying, because I hate to say this, I don’t think Jerome himself and even a lot of the folks on the Fed really understand. I mean, I think they understand tariffs, but I don’t think they understand the mechanics of how things actually work from the actual manufacturer, let’s say in China, to the exporter, to then the importer, then to the actual retail center or the retail company that actually may end up with said good. I don’t think those guys really fully understand how all of that works. And Scott, those of us that are in business, we do. We see things on a different level than they do. And the reality is there’s enough people in line. that were able to take dollars out of the price, whereby at the end of the day, the tariff didn’t amount to much of anything at all when it was all said and done. I mean, it got paid, and we as a country have collected money, but it didn’t do anything to the retail price because of what I just said.
SPEAKER 19 :
Yeah, you know, on top of that, I think people get so, especially some of the financial media, like the Wall Street Journal and Bloomberg, they get so caught up in the headline idea, they don’t dial it back and think about the fact that The real inflation cost comes on the services side.
SPEAKER 16 :
That’s right.
SPEAKER 19 :
So it’s not goods makes up about 35% of inflation. So a change in good prices isn’t going to have as much impact as a change in labor wages.
SPEAKER 17 :
Yeah, and what’s happened on the labor side – and this is something that you and I have talked about plenty, and I know that’s on our sheet to talk about today – on our notes to talk about today anyways – is when you look at the service side and you look at what AI has been able to come in and do on the service side, even though some wages in some places have gone up for actual workers in the service sector – The reality is there’s not as many of them. They’re not as many needed because we’re able to take AI in a lot of different areas of business, service included, and basically make up for some of that loss, if you would, Scott, increase production with less people is what I’m going at here.
SPEAKER 19 :
So I’ve been reading about some of this taking place in other countries now too. Some of the recent PMI data is pointing to that. That’s purchasing managers index data where companies are surveyed and the guys who buy goods for them respond to these surveys about what they’re seeing, whether certain indicators have increased, decreased, or unchanged. But what they’re seeing is they’re seeing more productivity, they’re getting better margins, and they’re hiring less people, or they’re even firing people.
SPEAKER 17 :
Well, and really quick, look at what Amazon announced today. I think I read it was either 14,000 or 16,000 not factory workers or not warehouse workers, but management inside of Amazon will be cut loose. And some people look at that and say, oh, that’s an awful thing. Actually, I look at that, Scott, and say, no, that’s a good thing. That’s going to boost Amazon’s profits. What they’re figuring out is they can do more with less, proving you and I’s point right now.
SPEAKER 19 :
Yeah, they’re investing more in AI, that’s right. Not just for products they would offer, but for the business they’re doing. It’s like, if you go look at pictures of their floors, I think we’ve talked about this in the past, but their conveyor belts now, it’s all on stacks. The computers, they don’t need people to sort and do that anymore. The machine runs up, they have a floor-to-ceiling stack, and they run up and grab everything and pop it down. It’s way more efficient. But yet, Amazon actually, part of this, Amazon last year, I believe, if you go look at their numbers pre-pandemic to where they are now from a global employment scale, I believe it went from 1.2 pre-pandemic to 1.5, 1.6 million. They’re going to take it back to 1.2. And they said last year they’re going to fire 300,000 people over the next couple of years. But that’s because… They’ve invested more in technology, and they’re getting more out of it.
SPEAKER 17 :
They can get more done with less, which is what’s happening inside the service sector as well. You’re spot on. And, again, it’s why, going back to the whole inflation thing, that’s where this started from. That’s why inflation hasn’t done what the Fed said. And, again, I hate to keep saying this, guys, but I’m going to keep saying it. Because Fed, the Fed, and a lot of the folks at the Fed, by the way, but Jerome Powell in particular, these guys haven’t worked in my world probably ever, Scott. But even if they did, it’s been so long ago they have forgotten it.
SPEAKER 19 :
Well, yeah. So what we – I was reminded of this today. It’s funny you bring this up. Jerome Powell made this comment prior to the pandemic and when inflation took off because of what happened. Yeah. He said the Fed couldn’t figure out why they weren’t seeing inflation. The reason they weren’t seeing inflation then and why it’s kind of cool now is because of all the things we’re talking about. It was because of the advances being made in technology and the employment of more technology by more businesses. They were able to keep costs down. And I think what we’re seeing now is AI is only accelerating that.
SPEAKER 17 :
That’s right. No, and again, these are things that I would think, Scott, that Federal Reserve and the folks that are in charge would see the same things that you and I see, and I’m baffled at times that they don’t. And at times I wonder, I mean, is it because these guys are eating caviar lunches every day and hobnobbing at night and so on and they’re really not looking at the core things they should and somebody gives them a set of spreadsheets and numbers and so on and they run off of that? I mean, are these guys just that clueless that they have no idea what goes on on Main Street?
SPEAKER 19 :
Well, I don’t know that it’s clueless as much as they’re very academic. And so I remember your teachers from school and they get so caught up in the academic side and they’ve been so immersed in academia for a while that they don’t understand these things always. I have plenty of teachers that I don’t know that they ever knew how to pick up a screwdriver and undo a screw or fix something. The type of things that I was taught by my dad growing up as a kid and I do when stuff breaks around the house. But it’s just, yeah, so it’s, there’s just a world they’re immersed in because it’s not, like, yeah, trucks coming to a warehouse, unloading, offloading, all these things. It’s just, it’s a bit foreign to them, I think would be the best way to put it.
SPEAKER 17 :
Yep, I agree with you on that one wholeheartedly. Okay, last but not least, you know, talk to us about the buyback potential and some of what’s happening there. I noticed that General Motors even announced some of that recently. Their stock went up because of that and so on.
SPEAKER 19 :
Yeah, so one of the things you’ve got to think about in terms of the stock market, what’s going on, is the buybacks have really powered the stock market and helped out over the last couple of years. And the reason they’re important is, let’s say a company has a million shares outstanding, they buy 100,000, so now they have 900,000 shares outstanding. Well, if they’re making the same profits as they were when they had a million shares, well, their earnings per share just went up. because there are 100,000 less shares, right? So, that drops the multiple on the indices, and that drives up the prices on stocks, and that’s what drives the S&P 500 higher. So, one of the things we have going on right now is the cost of capital is coming down. We’re seeing good earnings growth. We’re seeing good margins out of a lot of companies, too. So, guess what they’re going to do? They’re going to take some of that excess money, and they’re going to keep retiring their shares. And, you know, I mean, they would never tell you this, but one of the reasons why some of these companies might want to do that, everybody at the top, a lot of people that work there, are holders of their shares.
SPEAKER 17 :
And they make more money in doing so.
SPEAKER 19 :
Exactly.
SPEAKER 17 :
Yep, that’s exactly right.
SPEAKER 19 :
So that’s another reason why it’s a good idea to be invested in the S&P 500 because… you’re going to benefit from those things that help them.
SPEAKER 17 :
How do we find you, Scott? I’ve got to get things wrapped up. How do we get a hold of you?
SPEAKER 19 :
Yep. Ben Pine Capital, Twitter, LinkedIn, and Substack. See Scott Garlis.
SPEAKER 17 :
Always a great conversation, man. I appreciate it. Have a great night. John, thanks so much for your time. You bet. No, I appreciate it. Always good, informative. I appreciate Scott greatly. Golden Eagle Financial. If you want to talk to somebody directly on the things we just talked about with Scott, look no further than Golden Eagle. klzradio.com is where you find Al.
SPEAKER 03 :
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SPEAKER 10 :
This isn’t Rage Radio. This is Real Relatable Radio. Back to Rush to Reason.
SPEAKER 17 :
All right, I’ll be back tomorrow, and I’ve had several messages come in today that I’ll comment on tomorrow, proving, by the way, that liberals only care about control and not freedom, and that’s based upon text messages from liberals. That tomorrow, plus much more. This is Rush to Reason, Denver’s Afternoon Rush, KLZ 560.
SPEAKER 09 :
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