Trade War Goes Nuclear: Trillions Printed, No End in Sight I Lobo Tiggre

The bond market has not recovered despite Wall Street claims that 'Trump shock is over'; the 10-year yield remains elevated at 4.5%, and gold remains above $3,000/oz, signaling continued concern about currency and fiscal stability despite equity market optimism.

“The bond market, I mean, it has recovered somewhat, but not really. And for all these cheerleaders on Wall Street is like, 'Oh, yeah, Trump shock's over. Everything's fine.' Right? Um the dollar hasn't recovered. Nope. Still gold has corrected a bit, but it's still over 3,000 bucks an ounce, right?”

Five-year inflation expectations are at a 25-year high (including post-GFC and COVID periods), contradicting Powell's claims that expectations remain 'well anchored' at 2%, suggesting the Fed is not being truthful about inflation outlook.

“the 5-year uh inflation expectation number is also it's not quite the hockey stick of the one-year, but it's also at a 25-y year high, right? Including the GFC, including COVID, right? And you know, and Powell keeps talking about well anchored at 2% like on what planet? The guy's not telling the truth.”

Walmart reported that retail margins are so narrow that they cannot absorb the full impact of tariffs, indicating that tariff costs will necessarily be passed through to consumers as price increases.

“Walmart reported on Thursday and Doug McMillan said, 'Well, given the magnitude of the tariffs, we aren't able to absorb the all the pressure given the reality of how narrow retail margins are in general for the big box retailers, right?'”

The host noted that official US GDP growth numbers are negative, and that 'stackflation' (simultaneous stagnation and inflation) is occurring, but mainstream media and officials aren't discussing this contradiction or its implications.

“Well, even the spending doesn't lead to growth anymore. The US GDP growth is negative. according to official numbers and nobody's really talking about stackflation.”

Trump's 'liberation day' tariff announcement caused market shock but the pain from tariffs is only beginning to manifest; despite a 90-day China ceasefire, importers already face 30-55% cost increases that will cascade into consumer prices over the next month.

“huge swings in the markets as a response. One has to wonder if uh I won't say if Trump knew what he was doing”

The Fed has become secondary to Trump administration policy in driving market outcomes; tariff announcements and trade policy moves have had greater market impact than recent Fed FOMC decisions because 0.25% rate changes are negligible compared to 10-30% tariff shocks.

“the Fed is playing second fiddle now. and the Fed's decisions, you know, how much difference is going to make when you're looking at 145% tariffs or 30% tariffs or 10% tariffs, you know, or bans or, you know, extra tariffs if it's steel or aluminum and all this, you know, how much does a 0.25% rate adjustment, how much difference does that make compared to this other stuff?”

Fed policy is now secondary to Trump administration trade policy in determining market movements, as evidenced by minimal market reaction to recent FOMC meetings while Trump tariff announcements and China negotiations drive major market swings; this represents fiscal dominance where tariff policy (potentially 10-145%) has far greater impact than rate adjustments of 0.25%.

“the Fed is playing second fiddle now. and the Fed's decisions, you know, how much difference is going to make when you're looking at 145% tariffs or 30% tariffs or 10% tariffs, you know, or bans or, you know, extra tariffs if it's steel or aluminum and all this, you know, how much does a 0.25% rate adjustment, how much difference does that make compared to this other stuff? So, it's Trump shock that's in the driver's seat right now, not the Fed.”

Powell's job is to 'steer the ship of state as calmly as possible,' not to tell the truth; he is aligned with stabilizing narratives and messaging regardless of actual economic conditions.

“the guy's not telling the truth. Sorry. It's just you know his job is to you know steer the ship of state you know as calmly as he can and so on not to be truthful”

The Fed likes to focus on core inflation data which excludes food and energy, trivializing commodities that directly affect consumer purchasing power and material inflation experience.

“the Fed likes to pay attention to core data which excludes such trivialities as food and energy, right? You know, who needs that?”

The US is currently running wartime levels of deficit spending (multi-trillion dollars annually since COVID) while simultaneously claiming to have 'the greatest economy ever,' which are logically incompatible claims—this contradiction suggests either the economy is weaker than advertised or spending is unsustainable.

“we've been spending like you know I think it would be a disservice to drunken sailors to say we've been spending like them the way it's been going. We've been spending at literally wartime levels of deficit spending at the same time that the powers that be Biden before us before now and Trump now they keep telling us we have the greatest economy ever and yet somehow we're spending like it's World War II. like what the f these things simply don't square.”

From an Austrian economics perspective, inflation is always a monetary phenomenon and oil price changes are irrelevant to inflation causation, but oil prices matter to voters and consumer purchasing power, making oil important politically even if not monetarily.

“to the point of the impact of oil as a as an Austrian-oriented economist or not economist, but economic observer, I'd have to say that, you know, inflation is a monetary phenomenon and the price of oil is irrelevant. If the price of oil goes down, something else goes up, right? Inflation is always and everywhere a monetary phenomena. That said, in terms of consumer prices and particularly prices, the gas pump, which voters pay so much attention to, obviously this is very important.”

Lobo predicted 'undeniable recession in the US by the end of 2024' but this did not occur; he attributes the miss to underestimating fiscal dominance—the government's continued multi-trillion-dollar deficit spending has papered over underlying economic weakness that would otherwise appear as recession.

“I was wrong when I said undeniable recession in the US by the end of last year. Uh, you know, people have said, 'Well, Lobo, you're not wrong. You're early.' Or, 'Lobo, you know, there was a recession in freight, in shipping and manufacturing and all these other things, the rolling recession.' But I said undeniable recession in the United States uh by the end of 2014. Didn't happen. I think I underestimated the fiscal dominance.”

Mainstream financial media cheerleading about economy recovery is partially explained by the fact that sponsors (presumably financial services companies) benefit from market optimism, creating a financial incentive for media outlets to promote positive narratives.

“despite the mainstream media, you know, seeming to want to be a cheerleader for the economy and for Wall Street, I guess that's where their sponsors are”

The tariff shock from Trump's 'liberation day' announcement has created immediate price pressures (importers facing 30-55% cost increases) that are just beginning to appear in price data, and despite a 90-day China ceasefire, the economic pain is inevitable because the core damage has already been done and will require months to fully manifest.

“He's paying 55% more now than before liberation/judgment day. And the Chinese, you know, that they're trying to sell their stuff and they're like, well, we could help with maybe a 3 or 5% discount. You know, he's looking at 55% more now during during the deescalation.”

Mining companies have learned lessons from the 2001-2011 commodity boom when they failed to convert windfall metals prices into shareholder returns, delivering instead negative free cash flow; current mining operators appear to be executing better with focus on margins and capital discipline.

“the business failed so spectacularly to, and you've talked to Rick Rule and others about this before, this isn't new. We saw this in, you know, from 2001 to 2011, you know, a huge windfall in metals prices and the companies just fell flat on their faces, you know, nothing for shareholders, like like negative free cash flow.”

Money printing can fill in economic holes caused by COVID without creating growth, making it impossible to conclude that fiscal stimulus no longer has stimulative effects—the effect depends on whether money fills a hole or builds a new hill.

“if you have everything's okay you do a bunch of spending then you get a bump in economic activity but if what was supposed to supposed to happen postco was a big economic trough and you print all this money it just sort of fills in the trough so it looks like oh it's not so bad we're going sideways well it's going sideways because you filled in this giant hole with money right”

China holds $760 billion in US Treasuries and is systematically reducing this position (down from a previous $1.5 trillion), with the Chinese Finance Ministry tracking this reduction as a deliberate policy ('760 billion to go'), representing part of a global ddollarization mega-trend.

“China, for example, still has $760 billion worth of US treasuries on their book. I spoke with Michael Howell, crossber capital. He he replied to a tweet I asked him in, 'So, what about China?' who said, 'Well, they have a sign at the door of the Minister of Finance is like 760 billion to go, right? So, they're obviously getting out of treasuries.'”

Members of Trump's administration have discussed defaulting on or rerating the coupon (reducing interest payments) on US treasuries held by foreign entities like China, which would be an unprecedented action equivalent to partial default.

“there are rumors, there are reports that members of Trump's administration have talked about defaulting on, they don't call it defaulting, you know, rerating the coupon for foreign bond holders”

The Republican Congress raised the debt ceiling for Trump's entire term so he doesn't have to address it; combined with tax cuts and spending increases, this guarantees massive deficit spending and inflation regardless of economic output.

“the supposedly fiscally conservative Republican party is, you know, they're they're raising the debt ceiling for the rest of Trump's term so he doesn't have to worry about it. I mean, that the the spending is like now it's real and it's big. At the same time, we're going to cut taxes and I love tax cuts, but if there's no pay for it, that's massively, massively deficit spending and inflationary.”

Recession odds have been debated among forecasters: Powell claimed 35% in March, Steve Hanke suggested 90%, Darryn Miller forecasted 60%, but after the China tariff deal announcement banks revised their recession forecasts lower, though this revision is questionable since the 'deal' is only a 90-day ceasefire, not a structural resolution.

“when we spoke in March, I think Jay Powell said 35%. Uh he but he dismissed it. And then I've been paying more attention maybe because I've been paying more attention. The banks came out with their recession forecast. I had Steve Hanky on the program. He was talking about 90%, Draen Miller is giving 60%. The banks have revised them lower now after the the deal with China.”

Consumer sentiment is at or near the second-lowest level in history (20+ year chart shows lowest levels since 2008), contradicting mainstream media cheerleading and Powell's previous claims that consumer sentiment is a key Fed monitoring metric, now dismissed as 'soft data' because it's inconvenient.

“the consumer sentiment which Powell a year ago was saying was a very important number that they were looking at closely and now oh that's soft data we don't look at that now that it's not so convenient”

One-year inflation expectations have risen to nearly 7.5%, and five-year inflation expectations are at a 25-year high (including during GFC and COVID), contradicting Powell's claim that inflation expectations remain 'well anchored' at 2%.

“consumer confidence numbers that we just got and you know the the one-year number is over it's like almost 7 and a half% or like it's such a hockey stick chart. It's unbelievable. Um and at the same time consumer sentiment this is you Mitch right the consumer sentiment”

The current US administration is floating multiple unconventional policy ideas simultaneously (Treasury restructuring, tariff threats, AI deals with Gulf states), and the frequency and extremity of these proposals is similar to the precedent set by Nixon, suggesting a pattern of radical policy exploration.

“how many crazy things have we seen since January 21st...how many crazy things have we seen since January 21st and B you know what did Nixon do that was completely crazy”

Globalization unleashed by the end of the Cold War was deflationary (offset monetary printing) and created overall wealth gains for the world, including for Chinese and global poor, despite reducing first-world manufacturing jobs.

“that was actually deflationary in a way a deflationary trend offsetting the money printing going on at the same time it raised up the world's poorest the Chinese included right and at the expense of first world manufacturing jobs sure but they learned how to code and got it jobs and did other things with it so it was I think overall there were people got hurt any change hurt some people somewhere but overall I do think that the globalization trend, which really was turbocharged by the peace dividend, was a win-win.”

Trump's fiscal package combining tax cuts with significant spending (with budget cuts deferred 4-5 years, which historically never materialize) is inflationary and equivalent to wartime deficit spending levels despite claims of a 'greatest economy ever,' creating a contradiction that reveals the money helicopters never actually landed.

“It's got, you know, tax cuts, more tax cuts, you know, no tips taxes and all this stuff. It's got lots of spending and the budget cuts, those are for four or five years from now. You know, like Congress always does that and then the cuts never happen, right? So that's inflationary.”

Wall Street and financial media are displaying 'irrational exuberance' and 'delusional optimism' about tariff outcomes despite clear evidence of pain (supply chain cost increases, margin compression) and unresolved China negotiations, and investors should not 'drink the Kool-Aid' of this narrative regardless of political affiliation.

“Where we're at now is, I think, irrational exuberance in mainstream finance. Everybody's saying, 'Oh, look, the the meat grinder's off. It's not so bad.' But our hand, the economy's hand is still in there.”

OPEC and Saudi Arabia may be pursuing market share over price maintenance by flooding the market to put US shale producers out of business and reclaim market control.

“the Saudis have just said, 'Screw it. We're going for market share. forget price. We're gonna put these US bastards out of business with their shale oil and we're gonna we're gonna flood the market until we put them out of business. So we so we get the market back.”

Consumer sentiment is at a 20-year (or possibly all-time) low despite mainstream media cheerleading and administration claims that the economy is fine, indicating that ordinary voters sense underlying economic weakness that has been papered over by fiscal spending but not genuinely resolved.

“the consumer sentiment which Powell a year ago was saying was a very important number that they were looking at closely and now oh that's soft data we don't look at that now that it's not so convenient you know that is um I only have a I only have a a 20-year chart it's the lowest on that chart or second lowest on that chart I have read on mainstream media that that is actually the second lowest in history since they started tracking it.”

Mainstream media and financial commentators want to be cheerleaders for economy and Wall Street, likely because that's where their sponsors/advertising revenue comes from.

“it's interesting that despite the mainstream media, you know, seeming to want to be a cheerleader for the economy and for Wall Street, I guess that's where their sponsors are”

Powell is not attempting to be truthful about economic conditions; his role is to 'steer the ship of state calmly' rather than provide accurate assessment, which means Fed guidance should not be trusted as candid economic analysis.

“The guy's not telling the truth. Sorry. It's just you know his job is to you know steer the ship of state you know as calmly as he can and so on not to be truthful”

BYD (Chinese EV manufacturer) produces vehicles with 400-500 km range for $10,000 that would still be cheaper than Tesla or General Motors vehicles even with 100-145% US tariffs applied, representing a competitive advantage that tariffs cannot fully eliminate for high-margin products.

“those BYD cars that have a 4 or 500 kilometer range for $10,000, they could slap a 100% tariff on those or 145% tariff. It'd still be cheaper than cheapless Tesla or, you know, a General Motors putt putt or something like that, right?”

Trump administration announcements of AI chip deals with Middle Eastern states (Saudi Arabia, Qatar) while restricting China's tech access are strategically incoherent—chips exported to Middle East go directly to Asia, which benefits China, contradicting the stated goal of preventing China's technological dominance.

“he he's just announced a series of AI deals for the Middle East. And if you think about it, if if China's public enemy number one, we can't let China beat us to AI because they'll take over the world and it will be bad news for the rest of us. Um, okay, how can you say that and then pivot and and set up data centers and, you know, all the latest, newest chips, send them to the Middle East. You know, where does the Middle East send its stuff? To Asia. That's what you know the gold souks they send their gold to the far east right”

The Federal Reserve's focus on 'core' inflation data (which excludes food and energy) is problematic because food and energy are 'trivialities' that actually matter to consumers, making the Fed's preferred metric less relevant to real-world price pressures.

“the Fed likes to pay attention to core data which excludes such trivialities as food and energy, right? You know, who needs that?”

The 90-day ceasefire with China does not constitute an actual deal or peace, and the odds of a workable final agreement are low because Xi Jinping cannot accept a deal that credibly appears to his domestic audience as a Chinese loss or American victory, even if both sides claim victory publicly.

“So if they can't come to terms, maybe we don't go back to 145. Hands still in a meat grinder, right? And if it goes, you know, all the way down to 80, that's still almost an embargo, right?...I cannot see she ever embracing any kind of deal that makes the Chinese look bad or like they caved or that Trump won and got them to do this stuff. They need to be able to credibly present to their people that they won that they you know the Americans chickened out”

Russian sanctions limiting oil sales to $60 per barrel have been largely ineffective because India violates them routinely, and the sanctions regime cannot be publicly admitted to be ineffective, making oil price pressure the only viable way to constrain Russian war funding.

“if you drop below that level, that no longer applies, but we all know that the Indians were violating it anyway. And what right? So the sanctions were never that effective anyway. Um so so yeah, if you're sitting there, you can't admit that the sanctions don't work.”

Inflation is fundamentally a monetary phenomenon (printing press always wins in the end), so regardless of oil price movements or tariff outcomes, an inflationary outlook is inevitable—either inflation now or more inflation later—making commodities a favorable investment.

“inflation is a monetary phenomenon and the price of oil is irrelevant. If the price of oil goes down, something else goes up, right? Inflation is always and everywhere a monetary phenomena.”

Most major S&P stocks are flat for year (Nvidia, Palantir only green for year) while gold sits over $3,000; investor attention remains captured by flat tech names, preventing capital rotation into mining.

“the S&P 500 is flat for the year. Nvidia Palanteer are actually green for the year which is quite pathetic actually personally. But my point is that it's still taking the attention away from what we're doing.”

Mining industry now has combination of high metals prices (gold >$3000, copper >$4, silver ~$30), low energy costs (depressed oil), and world-class recent discoveries, positioning mid-tier and major mining companies to deliver record margins and cash flows.

“for all those projects that have that run on gen sets, you know, remote high in the Andes or whatever that have high fuel costs as inputs to have lower oil costs at the same time that we have high metals prices and primarily I'm thinking gold here, but silver is relatively high... copper over four bucks isn't bad. I think they're all going higher”

Trump's tariff and trade policies represent a fundamental reordering of the global economy comparable to Nixon Shock (1971), unlike the peace dividend which was an efficiency enhancement of the existing system but not a change of underlying monetary or trade system fundamentals.

“I mentioned this in my talk yesterday here at the Deutsche Gold Mess. I think that we're looking at something that is on the order of and it's interestingly eerily reminiscent of echoing of Nixon shock. Trump shock and Nixon shock have a lot in common. Um, one of the things being lots of unintended consequences, one of those being high inflation”

If US GDP growth is negative according to official numbers (as recently reported), and money helicopter spending continues, the entire deficit spending is simply 'filling in a hole' from COVID contraction rather than generating new economic growth.

“the US GDP growth is negative. according to official numbers and nobody's really talking about stackflation. So, so like sorry but yes that's exactly what we're saying like if if you if you have everything's okay you do a bunch of spending then you get a bump in economic activity but if what was supposed to supposed to happen postco was a big economic trough and you print all this money it just sort of fills in the trough so it looks like oh it's not so bad we're going sideways”

Low oil prices act as 'QE for the people'—they enable Americans to consume more (ability to drive pickup trucks long distances), keep gas inflation low, and suppress overall CPI since oil is an input to everything, making low oil prices a de facto stimulus mechanism that buys political support.

“I call it QE for the people low oil price because it keeps gas prices low people can travel especially in the US they use their pickup trucks to drive a thousand miles to go somewhere doesn't sound really economic but at $2 a a gallon or 250 a gallon makes sense and it keeps inflation lower because oil is used in everything.”

Whether fiscal stimulus fills in a pandemic-induced economic hole or builds new economic activity determines whether deficit spending causes asset inflation or growth inflation; this distinction affects whether inflation is transient or persistent.

“if what was supposed to supposed to happen postco was a big economic trough and you print all this money it just sort of fills in the trough so it looks like oh it's not so bad we're going sideways well it's going sideways because you filled in this giant hole with money right so um I'm I'm not sure that we can conclude that throwing money at the economy will no longer have any stimulative effects. It depends on what the underlying strength or weakness is. Whether all that money just fills in a hole or builds a new hill. What does it do right now?”

Investors have become accustomed to back-to-back annual 20% gains in the S&P 500, which was a historical anomaly, and are reluctant to reallocate capital into other asset classes even when equities underperform, because the 401(k) dollar takes time to move and the historical pattern of 'stocks only go up' remains psychologically powerful.

“Investors are used to 20% annual gains in the S&P. They probably won't get that this year but at least they're not losing money right now. The the back-to-back 20s was a historical anomaly. for anybody to be used to a historical anomaly is like yeah but it was too almost risk-f free...stocks only go up...my point is there's no need to shift your investment yet again”

Equity markets may not experience a catastrophic crash (1929 or 2008 style) due to ongoing fiscal stimulus, but could significantly underperform for years through a slow decline or treading water, which would be perceived as a disaster by investors accustomed to consistent gains.

“I don't know that we'll have an actual stock market crash, you know, 1929 or or 2008 or anything like that, but if you just go from back-to-back outperformance to treading water, by comparison, that's bad. That's a disaster...It could be losing ground or slowly sinking, you know, for years”

If Trump administration officials seriously pursue the idea of restructuring foreign-held US debt (reducing coupon for foreign holders), it would trigger an immediate and severe shock to dedollarization, converting the long-term gradual process into a rapid capital flight that would be economically historic and frightening.

“what what I'm saying though is that it would be naive for and the Chinese are anything but naive to think that oh well there are limits to how crazy the US can be. History says that's not true...If I'm a foreigner holding this hot potato and they're talking about changing my coupon, tearing it up, well f that, you know, I'm out of here, right? So, you know, I I think these people, I hope they understand they're playing with fire. If they start making serious noises about that, you go from this decade-long orderly ddollarization trend to a sharp shock, which would be historic in the scary sense of that word.”

Members of Trump's administration are discussing reducing or restructuring the coupon rates for foreign bondholders on US Treasury debt as an alternative to outright default, similar to how the Nixon administration abandoned the gold standard despite having promised the world the dollar would be backed by gold.

“There are rumors, there are reports that members of Trump's administration have talked about defaulting on, they don't call it defaulting, you know, rerating the coupon for foreign bond holders.”

World-class mineral discoveries have actually been made in recent years in the mining sector, contradicting the narrative that good discovery opportunities have disappeared, but these discoveries aren't receiving capital market attention due to momentum allocation.

“It's interesting we talk about how how long it's been since we've had any really great discoveries in the mining space. There actually have been some in recent years and I'm not going to name names you know I don't do that but it's actually happening.”

If Trump's tariff and trade policies fail to deliver on promises and create economic pain exceeds expectations, this could damage Trump supporters' confidence even if they ideologically favor the policies' objectives.

“I'm in favor of deregulation lower taxes I'm you know I don't have a mega hat, but I'm in favor a lot of what Trump is trying to do, at least his stated objectives, but that doesn't blind me to the prices we have to pay along the way.”

Gold majors are producing margins of $2,000 per ounce at current gold prices over $3,000, while Barrick's existing mining operations were built assuming $1,300 gold price, meaning current prices are roughly 3x the economic assumptions that planned those assets, creating substantial windfall margin expansion.

“New uh is producing $2,000 in margin at the current level. Barracks existing operations were all planned around $1,300 gold. Their current price assumption has crept up, but their existing assets were built assuming 1300. Right. Like we're we're close to three times.”

Trump's public claims about Ukraine ('could end in 24 hours,' 'thousands of soldiers dying') suggest Ukraine is politically central to his credibility, making low oil prices (which would reduce Russian war-funding) a potential strategic tool to force Putin to negotiations.

“Trump has made a big thing. you know, he promised on the campaign that he could end the war in Ukraine in 24 hours. Nobody really took that seriously. Um, but he really pounded the table on this. This is a big deal. And every time he's on the interview and they ask him about some, you know, unconstitutional or unethical thing he's done. He's like, 'Yeah, but all those thousands of soldiers are dying and they're not American soldiers, but they're still human beings and I care.'”

If tariff inflation does not show up in core inflation data as the Fed expects (due to the Fed's theoretical framework), the Fed may be forced to 'walk back' its position or provide forward guidance about inflation expectations, but will likely not raise rates despite inflation, in order to avoid administering economic shocks.

“if the tariff inflation shows up as many, including Powell, are guiding, right? It'll be interesting if, you know, they can't just suddenly raise rates. I mean, they could, but I don't think they will. That would administer a a shock of the sort they don't want. So, I think they will need to start guiding. Even if there's like an emergency pivot, I think you'll start hearing Fed speak, start talking about, well, we do have this sudden burst of inflation. It's all Trump's fault. It's not our fault, right?”

Gold and mining stocks offer a 'perfect storm' opportunity in the next 1-2 quarters if equities underperform (transition from back-to-back 20% annual gains to flat/slightly negative performance) while mining company margins expand due to high metals prices and lower oil costs, causing momentum capital to rotate into commodities.

“I think we will get to that point where, you know, I don't know that we'll have an actual stock market crash, you know, 1929 or or 2008 or anything like that, but if you just go from back-toback outperformance to treading water, by comparison, that's bad. That's a disaster. Treading water is not what these people are here for, right?”

Trump's policies are effectively a weak-dollar policy despite rhetoric about 'strong dollar' and 'America first,' as evidenced by actions like potentially encouraging Saudi Arabia to increase oil supply to pressure Russia, which would weaken the dollar and help US export competitiveness.

“if you're patriotic and how great, you know, America number one, America first, make America great again. How can you say you want a weak dollar? that doesn't sound strong and good. Um, but if you look at what they're doing, it seems like everything they're actually doing is a weak dollar policy.”

Trump administration's announcement of AI data center deals for the Middle East contradicts the claim that China is a threat that must be excluded from advanced chip technology, because the Middle East re-exports advanced technology to Asia where China has access to it anyway.

“if China's public enemy number one, we can't let China beat us to AI because they'll take over the world and it will be bad news for the rest of us. Um, okay, how can you say that and then pivot and and set up data centers and, you know, all the latest, newest chips, send them to the Middle East. You know, where does the Middle East send its stuff? To Asia. That's what you know the gold souks they send their gold to the far east right”

Lower oil prices create a QE (quantitative easing) effect for consumers by keeping gasoline prices low, enabling discretionary spending on travel and other activities while simultaneously suppressing overall inflation across the economy.

“I call it QE for the people low oil price because it keeps gas prices low people can travel especially in the US they use their pickup trucks to drive a thousand miles to go somewhere doesn't sound really economic but at $2 a a gallon or 250 a gallon makes sense and it keeps inflation lower because oil is used in everything.”

Trump's 're-industrialization' and 'America First' agenda is not primarily economic policy but military and national security policy—the underlying logic is that you cannot make tanks without domestic car manufacturing capacity.

“for Trump to try to re-industriize the United States and put America first, which is not, I think, entirely an economic or even primarily an economic policy. It's partly military, national security, all this stuff. You know, I I get that if you don't make cars, how are you going to make tanks?”

If China dumps all US treasuries at once, it would constitute clear economic warfare more damaging to China than US, but if asymmetric damage expectations apply ('if the other guy hurts more'), China might accept mutual harm to damage the US.

“If they decided to dump it all at once, like that would be clear economic warfare, right? That would be a big deal. And you know, there's an argument that well, you know, why would they do that? They'd shoot themselves if they did that. Yeah. But you know, if the other guy hurts more, I'm okay. you know, I can bring back to the self-sufficiencies. Like, if you're self-sufficient, why would we care?”

Chinese precursor chemicals used in opioid manufacture are not direct fentanyl shipments but ingredients used in other drugs as well; China is not responsible for US drug problem through intentional poisoning but supplies raw materials.

“and by the way, it's not fentinol. It's not like they're actually shipping this drug. It's the precursors. They're made, right, which are used in other drugs as well.”

For commodities investors and speculators, the key question is what happens with tariffs and trade deals (whether there is escalation, partial deal, full de-escalation) because this drives copper, aluminum, and other commodity prices more than Fed policy or broader macro signals.

“for us as commodities investors and speculators you know what happens to copper and aluminum all these other things China is is absolutely central to that absolutely”

The printing press is 'a much more powerful force than anything else' and 'the printing press always wins in the end,' so despite any deflationary risks or economic weakness, an inflationary outlook is inevitable—making commodity investments bullish regardless of near-term macro path.

“I you know that there's some people who talk about all the problems with the economy and they warn about deflation. I just think the the printing press is a much more powerful force than anything else. it the printing press always wins in the end”

China will not accept a trade deal that makes it appear they lost or caved to Trump; any deal must allow China to credibly present to their domestic audience that they won or that Americans backed down, making reconciliation with Trump's stated objectives structurally difficult.

“the Chinese are not going to want to lose face in this. I I just I cannot see she ever embracing any kind of deal that makes the Chinese look bad or like they caved or that c that Trump won and got them to do this stuff. They need to be able to credibly present to their people that they won that they you know the Americans chickened out or whatever.”

If no deal with China is reached and tariffs remain at 80% or higher, it functions as an embargo with almost no goods flowing between US and China, leaving the US economy still in the 'meat grinder' even if maximum tariff levels are avoided.

“if there is no deal, if the Chinese are like, you know, we're not responsible for your drug problem, like that's that's not us... If there is no deal, if the Chinese are not going to come to terms, maybe we don't go back to 145. Hands still in a meat grinder, right? And if it goes, you know, all the way down to 80, that's still almost an embargo, right?”

Trump has shifted dollar policy toward weakness despite rhetorical claims of 'strong dollar'; his actual policies (tariffs, deficits) weaken the dollar and help US exports, which is a 'weak dollar policy' in contradiction to his patriotic messaging about dollar strength.

“if you're patriotic and how great, you know, America number one, America first, make America great again. How can you say you want a weak dollar? that doesn't sound strong and good. Um, but if you look at what they're doing, it seems like everything they're actually doing is a weak dollar policy.”

Mining companies have learned lessons from 2001-2011 commodity boom when they failed to convert price windfalls into shareholder value; this time they are running higher margins and improving capital discipline.

“the the business failed so spectacularly to, and you've talked to Rick Rule and others about this before, this isn't new. We saw this in, you know, from 2001 to 2011, you know, a huge windfall in metals prices and the companies just fell flat on their faces, you know, nothing for shareholders, like like negative free cash flow. Um, and it looks like this time they got the memo, they're doing things, if not right, then at least better.”

If equity markets transition from back-to-back 20% annual gains to flat performance or losses, momentum-chasing capital that abandoned mining will redeploy into mining stocks if gold majors report record margins and cash flows.

“imagine a world, just real quick, imagine a world where, okay, maybe there's no Trump session or whatever, but things are shaky, right? The the hand is still in the meat grinder and the pain is still there. Wall Street is trembling. People are looking around for a bright spot. If next quarter, if what when Q2 results come out and all the gold majors are reporting higher margins”

Fed may eventually need to pivot and hike if tariff inflation becomes undeniable, forcing emergency policy reversal and providing hint to markets before action through Fed communication.

“if the tariff inflation shows up as many, including Powell, are guiding, right? It'll be interesting if, you know, they can't just suddenly raise rates. I mean, they could, but I don't think they will... I think they will need to start guiding. Even if there's like an emergency pivot, I think you'll start hearing Fed speak, start talking about, well, we do have this sudden burst of inflation.”

Chinese manufacturing of BYD electric vehicles at $10,000 for 400-500km range would remain cheaper than Tesla or GM vehicles even with 100-145% tariffs, showing tariffs won't block all imports but will block most.

“those BYD cars that have a 4 or 500 kilometer range for $10,000, they could slap a 100% tariff on those or 145% tariff. It'd still be cheaper than cheapless Tesla or, you know, a General Motors putt putt or something like that, right?”

Lobo dislikes Trump's tariff approach but acknowledges he supports deregulation, lower taxes, and most of Trump's stated economic objectives; his criticism is that implementation will cause pain that needs to be priced in.

“I'm in favor of deregulation lower taxes I'm you know I don't have a mega hat, but I'm in favor a lot of what Trump is trying to do, at least his stated objectives, but that doesn't blind me to the prices we have to pay along the way.”

The stage is 'set' for a 'perfect storm' scenario within the next 1-2 quarters where equity underperformance, tariff pain becoming obvious, and mining margin expansion converge, though Lobo explicitly disclaims this as 'not a prediction'—he's identifying conditions that make it possible, not probable.

“I do see I do see not just a situation someday or whatever, but I I think this is something we're talking about in the next quarter or two where we could see this potential perfect storm. Not a prediction. I'm not saying there will be a perfect storm in two quarters, but but the stage is set where where if they are filling in a hole and the mainstream equities underperform, then our stuff should really outperform.”

The Saudis may have announced increased oil production to flood the market and put US shale producers out of business to regain market share, rather than responding to Trump policy.

“The one way of looking at this is that the Saudis have just said, 'Screw it. We're going for market share. forget price. We're gonna put these US bastards out of business with their shale oil and we're gonna we're gonna flood the market until we put them out of business. So we so we get the market back. That's one explanation for what's going on.”

The host believes he is waiting for a Fed rate cut (potentially in September 2025) to shift capital flows into mining, noting positive correlation between Fed cuts and mining outperformance from the previous September pattern.

“I'm waiting now for a Fed cut maybe in September cuz we've seen a positive correlation correlation back last September but as we've been discussing if the Fed is second fiddle is you know are people even going to pay that much attention but but I but I'm with I'm looking for glimmers of hope here.”

Investors should not blindly follow MAGA ideology just as they shouldn't blindly follow mainstream media cheerleading; rational investors must price in the economic pain from tariffs regardless of political affiliation.

“don't let your MAGA hat blind you to these realities, right? you know, I don't know the future, but to me, this looks absolutely baked in the cake.”

Recent mining discoveries have been world-class but haven't attracted capital because momentum is in other sectors; this represents a pricing disconnect where great discovery quality exists but market ignores it.

“we talk about how how long it's been since we've had any really great discoveries in the mining space. There actually have been some in recent years and I'm not going to name names you know I don't do that but it's actually happening. So you've got expanding margins, you've got some world-class discoveries being made, like the business is actually doing what it's supposed to do.”

Wall Street and mainstream media are displaying irrational exuberance about the tariff situation, ignoring the economic hand still caught in the 'meat grinder' and the price that will be paid for what has already been done, regardless of whether a final deal is reached.

“irrational exuberance in mainstream finance. Everybody's saying, 'Oh, look, the the meat grinder's off. It's not so bad.' But our hand, the economy's hand is still in there”