It Started: Trump Just ‘Broke’ The Federal Reserve – Gold, Silver, Bitcoin Collapses
These notes were generated by AI and may contain inaccuracies.
Trump confirmed Jerome Powell will soon be replaced as head of the Federal Reserve. Appointed Kevin Warsh, not who markets expected. Immediately after, stocks sold off. Gold and silver saw their biggest drop ever. Easy money era disappearing; new leadership changed rules overnight.
Discusses what happened, why sell-off, investor protection, using info to make money. Chaos creates opportunities if you know where to look. Thanks viewers for likes/subscribes; shows picture of Eternal. Sponsor: Rocket Money.
Kevin Warsh (not Cramer) new Fed head. Fed governor 2006-2011 during Great Financial Crisis; Fed created bailouts, backstops. In 2008, worried stimulus too much, wanted higher rates longer, warned of runaway inflation (but inflation low next decade). 2011: Opposed $600 billion QE for housing; called benefits small/fleeting, risks large. Resigned when couldn't stop it. Reputation: prefers falling prices/slower growth over currency devaluation. 2022: Fed waited too long to raise rates, lost credibility overstimulating post-COVID. QE inflates asset bubbles, worsens inequality. Wants smaller balance sheet, stability focus. Philosophy: higher rates, slower growth, stronger dollar—opposite of 2026 market expectations, causing sell-off.
Markets unsure post-election. Trump promised lower rates, criticized Powell. Investors expected endless money printing. Warsh expected to crash economy to save dollar, print less, shrink balance sheet, avoid Ray Dalio's New World Order.
Policies good for asset holders bad for paycheck-to-paycheck. Enriching stockholders at expense of everyday Americans.
If central bank focuses on real economy, financial markets take care of themselves. (Implying markets fall but for greater good.)
Warsh now pushes lower rates for growth, affordable 30-year mortgages, housing boost. Sees self as 2026 White House ally. Some say he's flipped to get job. Markets: no dollar collapse, stronger dollar weakens stocks, tighter conditions raise mortgage rates.
Trump wants weaker dollar: strong dollar makes US goods less competitive abroad, encourages offshoring; weak dollar boosts exports, stocks, eases debt. Entering environment unlike last decade: predictable bailouts/liquidity questioned.
Tracks net worth, aggregates accounts, optimizes spending, cuts subscriptions (found 50% renewal hike). Negotiates bills (phone/cable/internet), saved users $740/year, $880M in subscriptions. rocketmoney.com/grant free start.
Markets reprice on future expectations; hate uncertainty, fall to compensate risk. Warsh nomination creates uncertainty—opposite past Fed norms, unclear if he'll follow Trump. Markets overshoot: e.g., April 2025 sell-off too dramatic, Trump's 'good time to buy' tweet caused frenzy.
Every year, stocks drop 10-20% even in up years. Charlie Munger: if you can't handle swings, deserve mediocre results.
- Avg S&P 500 intra-year drawdown since 1980: 14.1%.
- 34/45 years positive annual returns.
- Since 1950: 2 years down >25%, 3 years 15-25% down; rest minor loss or gains.
- Recovery: 5-10% drawdown avg 3 months; 10-20% correction 8 months.
- Recession + drop: recover 1-2 years avg.
- Better to add/hold than sell/buy back.
- Jan up 0-2%: next 11 months lower only once; avg +16.9%.
- Feb often worst month, avg negative since 1950s.
Studies: 62% positive after 1 month, 75% after 1 year, 89% after 5 years, 95% after 10, 99.8% after 15 years despite volatility.
If 99.8% chance of profit in 15 years, invest now. Tried-and-true: buy/hold stocks consistently 20-30 years. Don't panic on drops unless need money soon. iPhone analogy: price drop to $500? Buy more, don't sell. View 30-50% drops as Black Friday sale if long-term holder. History shows patience wins (avoid fartcoin).
Pattern: FOMO in, then fear out. Stay course; drops are opportunities. Great Recession: bought CA house $70k. 2020: S&P at 2300. 2022: S&P 3600, BTC 16k/30k/50k/110k/75k. Keep buying if no short-term need.
Warsh will lower rates, follow Trump—market overreacting. Trump wouldn't appoint opponent. Aligned goals. Counter: 2007 Warsh said credit risks non-existent, banks great (pre-crash).
Long-term: stay course, keep buying. 20 years from now, won't matter.
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