Retirement Wipeout: ‘Think Like A Central Banker’ Or Risk Losing Your Wealth | Devlyn Steele

Devlyn Steele (0:00)

A retirement saver should think like a central bank. I would say inflation is here to stay. A retirement saver is in the business of trying to predict the next Fed move. They're trying to understand the economy that they're going to be living in in five, 10, 15, 20 years, and why gold and silver would be important to them in that economy. The central banks aren't looking at the price of gold when they're buying it. They're buying it for where the future is going to be.

David Lin (0:28)

The following video is sponsored by Augusta Precious Metals. It's Friday, September 4th. We just got the payroll numbers. US payrolls rose 162,000 in August. More than expected, unemployment rate is still at 4.1%.

Meanwhile, Trump just threatened to end trade with countries with surpluses if the Fed doesn't raise, if the Fed doesn't lower rates, rather, soon. He said this, and I'll share it with our next guest and get his reaction. I think I know what his reaction is going to be. And this actually moved the probability of a Fed hike up from 50% to 60%. So I think it had the unintended consequence of going the other way. Markets are down. The S&P is down half a percent. NASDAQ is down half a percent. Gold is down 1% after climbing 3% yesterday. Bitcoin is down. Yields are interestingly also down. Devlin Steele is my next guest. He's the Director of Education at Augusta Precious Metals. Welcome to the show, Devlin. Good to see you again.

I saw you offline, so it makes me think in my head. We've already been friends for quite some time, but my first time hosting you on the show, my pleasure to host you. Thank you for being here.

Devlyn Steele (1:36)

Thank you for having me. I like the work that you do. The data that you get people is strong, and the conversations are worth listening to.

David Lin (1:43)

I appreciate it. And thank you for being a part of the program and supporting the program. Okay, I want to show you this and get your reaction to this. This came in from True Social today.

President Trump tells the Fed to slash rates or he'll end trade with countries with US surpluses. Before I read this post from True Social, let me just show you what I referenced in the introduction. The CME FedWatch tool gives a probability of rate hike or rate cuts by the next FOMC meeting. Previously, as of yesterday, the probability of a hike was 50%.

Now it's 60%.

So it went up. So Trump's True Social did absolutely nothing to sway the markets. But anyway, I'll read you what he wrote. Great job numbers just announced, breaking all estimates, except mine, by double and triple. And you haven't seen anything yet. Employers added 162,000 jobs in August. Lower the interest rates because the USA is a much stronger credit than it was just a short time ago. A strong country means a lower interest rate. It's a better credit. Very simple. We should have the lowest rate of any country in the world like the old days. Without the US agreeing to allow them their big surpluses, and we would stop that immediately, they would no longer be considered financially elite. Lower the rate or I'll stop trading with countries with which we have a deficit, which the US Supreme Court, in its ridiculous and very costly tariff decision, strongly acknowledged the president has an absolute right to do. It's better than tariffs. The Fed board with its great new leader must get smart. Be patriots for a change. High interest rates put the USA at a very unfair advantage, and I won't allow that to happen. So he just told the Fed to get smart. He did call Kevin Warsh a great new leader. But yeah, I don't think markets are responding to that. They're responding to the job numbers. But I'll let you respond to what I just read to you, Devlyn.

Devlyn Steele (3:37)

Presidents and Trump is not the first president to go to war with the Federal Reserve or try to reshape the economy in their own words.

You know, what happened with Biden was when inflation was going up and everything was going really badly for the consumer, he was saying, based on the numbers, everything is great. What happened at the voting booths? He was out. So presidents always talk, and that's fine. And that's what they're supposed to do. They're politicians.

Do they really affect the interest rates? Because why the Fed watch tool went up on probabilities based on economics? They're not paying attention to what Trump is saying. They're paying attention to the numbers, and based on the numbers, what that probability of a rate hike is. Unfortunately, the CME watch tool and has been a very good predictor of interest rate hikes, but I believe Kevin Warsh is a different type of Fed chair, and he's said very clearly, don't rely on the Federal Reserve for forward guidance, that we're not going to tell you what we're going to do. And what he also said is that he is about discipline, not a decision. So even though he said inflation is a problem and we have to do something about that, it doesn't mean that he is going to react the same way the numbers normally do. He might wait, he might wait and see more, he might want more numbers to come in. So I don't believe the CME watch tool is as strong as it used to be with Warsh in there. And if you look at this week, it's been all over the place, because earlier this week, the Fed gave indication that it's not going to raise rates. And then you saw all those numbers, the gold, everything go up, and now the jobs numbers come out, and everything goes down. So it's a very volatile market that's trying to predict what Warsh is going to do. And you have to also remember, Warsh is just one vote. He doesn't get to independently on his own say whether rates go up or rates go down. It gets voted on, and the majority wins on that in the Federal Reserve Governor's Board.