Episode #17
Welcome back to the Tax Free Millionaires Podcast, episode 17. I'm your host, Reed Scott, and on this podcast, we're gonna be challenging conventional wisdom and dive deep into what really drives wealth and prosperity. Today we're gonna be talking about what's going on in the market today. It's April 25th, Friday.
We've had an excellent week. This market's been up and a lot of people, a lot of analysts, especially technical analysts are saying, Hey, , the bottom has been reached. We're back in a bull market. It's time to rush back in. We're gonna talk about what I believe is happening in the market right now and whether you should follow that advice.
So stay tuned because this episode could save you a lot of money. So this past week. We saw the market reverse course and have three days of solid growth. In fact, all 11 sectors of the market went from sellers being in control to buyers being in control, meaning that this week there were more buyers than sellers of stocks.
Now, as I said earlier, a lot of technical analysts are screaming that this means the market correction is over. We've hit bottom and we're back in a roaring bull market. Are you experiencing fomo? Fear of missing out? Have you already rushed in and bought stocks because they look so cheap relative to where they were last year?
Well, if you read my book, tax Free Millionaires, and if you've taken any of my courses at our website, tax free millionaires.com, where we teach risk management and investing wisely, especially in your retirement accounts, you'll know that I've been telling my students that they should stay out of the market.
That they first of all should not risk their, uh, retirement capital and should set very, uh, close stop losses. So those stop losses have already kicked in for my students and myself. And we're sitting in cash. At least mostly in cash, we might have some types of investments, uh, that we've held for some time that where we have puts that protecting our positions.
But. Any recent investments where we didn't have a lot of profit built in, we're setting in cash. And every, all of my students and myself are wondering when it's the time to get back in, I'm not getting back in and I'm not advising my students to get back in. And here's why. Uh, I'm going to explain in this episode why the technical signals don't make sense in this market.
This market is different. It's been caused by different factors that we haven't seen in the past. A president deciding to impose, uh, punitive tariffs. Never seen that before. What that's done to the market, what that's done into foreign investors and how they position themselves in our debt.
This has had a devastating impact longer term on our economy, and we need to be aware of that. So I'm calling this episode, it's the supplies Chain Stupid. And before I dive into today's podcast, I wanna make something abundantly clear. The arguments I'm about to present today are not political statements, and this is not a political podcast.
I'm an American first and investor second, and I'm an independent when it comes to my politics. I like to believe I don't blindly follow any one person or party and logically examine each policy independent. I've voted Republican in the past. I voted Democratic in the past and I voted for. Candidates who were not a member of either party.
I am not a zealot. Unfortunately, today we have an environment where if you question anything, a politician says it's viewed as disloyal. I am loyal. I'm loyal to logic and good sense. Not a man who puts on his pants one leg at a time just like you and me, but it concerns me greatly when a single man starts talking like he's a God.
And starts talking like he knows more than anyone else in the world and more than all the combined experts and economic wisdom in the world, and that only he can know what's right, what has happened to America when we act this way and follow one individual or group of advisors rather than a logic in common sense.
I'm not a never Trumper and have nothing against the president. In fact, I was hoping he would succeed and create a booming economy as he said he would when he ran for office and after he was elected. Unfortunately, his actions and the actions and words of his advisory team have convinced me that he and his team are dangerously naive when it comes to how manufacturing and supply chains work and how tariffs work and the devastating impact they can have on the World Economic order.
Despite the relief rally we saw this week in the market, I believe that we are an extremely volatile market over the next few months and perhaps years. If the administration does not radically reverse course, this is not just a matter of inflation and higher cost to consumers. Since tariffs were announced, we've seen a flight of investors away from United States Treasury bonds , and away from the United States as the world's reserve currency.
In fact, to demonstrate the absolute naivety of Trump's team, his chair of of the Council of Economic Advisors, Steven Moran, has proposed controversial measures aimed at restructuring the global financial system, including imposing fees on US bond holders. Moran has proposed against the advice of almost.
Every leading economist in the world, the United States should force foreign bond holders to swap their existing bonds for bonds to pay a lower rate of interest. He argues this would lower the interest the government owes and would automatically reduce our debt. Well, it makes sense, doesn't it? If you think just in a black and white terms, if you, , borrow money from someone and you agree to pay 'em 8% and you suddenly say, you know what? I'm only gonna pay you 4%. Well, that would lower your cost, but guess what? There are consequences on defaulting on your loan payments. And apparently Mr. Moran went right from his parents' basement directly to graduate school because every other economist and logical thinker in the world realizes this is de facto default.
And our government backed obligations would lead to a complete. Collapse of the World Financial system. No longer would anyone trust the United States to honor their debts, and it would lead to a cashing end of the United States, $35 trillion worth of debt within a matter of months, if not years. I think it would be less than a year.
And think of what that would mean to the United States in its economy already the dollar has declined in value almost 30% since President Trump announced these tariffs because foreign bond holders are fleeing. US Treasury obligations because they see this coming. It is these types of proposals and statements from the advisors who surround the president.
That makes me highly concerned that the president, unlike in his first term, no longer has any competent advisors when it is within his orbit, his Secretary of the Treasury under his first term, Stephen Chen, understood manufacturing, supply chains and the dangers of high tariffs, and was able to talk President Trump down from alleged a punitive tariff policies.
Unfortunately this time around we are not as fortunate. It appears the president only wants to listen to people who agree with him and tell him his clothes are are beautiful even when he isn't wearing any.
Foreign bond holders and and foreign holders of the United States treasuries have already begun to flee US debt obligations. As they no longer trust the United States will honor its obligations, the power to levy tariffs, and change the fundamental holdings of the United States treasury obligations.
Were never supposed to be in the hands of one man for exactly the reasons we see today. These decisions are too important to be put in the hands of a vindictive president with no understanding of global economic dynamics. These decisions under the Constitution were meant to be coolly, deliberated by a legislative body that could call an expert testimony and do deep unbiased economic research.
Unfortunately, our current Congress, primarily due to self-serving political reasons, have advocated their responsibilities and trusted our country's future. And to the hands of one man who was surrounded himself with a group of crackpot advisors with absolutely no real world experience, the Trump administration.
And his three clueless amigos, Howard Lunik, Peter Navarro, and Scott Bessett have all proven with their tariff plan that they are completely clueless when it comes to manufacturing and that they have absolutely no idea what they're doing and trying to accomplish What they state is their objective, which is to restore the United States domestic manufacturing dominance.
Remember none of them, and this especially includes President Trump have ever built one product in their lifetimes. They were involved in finance and real estate, and none of the current advisors in this administration have the sliced idea of what they're doing when it comes to manufacturing and supply chains As proof of that, listen to the comments of Scott Bessett when he recently stated that he didn't understand what Tim Cook, CEO of Apple meant when Mr.
Cook said it would be difficult to assemble iPhones in the United States because of a skills gap in the United States. Secretary Bessant went on to say, you don't need a PhD in mechanical engineering to assemble iPhones. So I don't know what, uh, Tim Cook was talking about. Challenging Apple, CEO.
Tim Cook's assertion that the US lacks the necessary skills for domestic iPhone assembly. Perhaps if Secretary Bessant had ever in his lifetime had any exposure to the manufacturing process, he would understand, or heaven forbid, maybe he and his brilliant advisory team could actually ask Tim Cook. What he meant before they started a devastating trade war that has no hope of accomplishing what they think it will.
If they had talked to Tim Cook, this is what they would've learned that Mr. Cook meant. When he said about the skills gap in the United States, when Tim Cook said it would be difficult to assemble iPhones in the United States because of a skills gap, he was mainly referring to the shortage of mid-level manufacturing skills, particularly in areas like.
Precision manufacturing tooling. China has a vast supply of workers, skilled in tool and die making, precision machining and supply chain coordination. These roles require technical training, but not necessarily a four year degree. The US has seen a decline in vocational training programs over the last three decades.
These skills require advanced assembly and production line management. iPhone assembly isn't just about lower wage labor. It also requires highly coordinated assembly line expertise, real-time supply chain adjustment and production agility. China has large industrial parks where tens of thousands of workers can be mobilized quickly, and they built this up over a period of two decades, something the United States lacks and has no goal to ever create supply chain ecosystem.
Cook has also pointed to the fact that China has developed a complete manufacturing ecosystem with component suppliers, materials, and engineers all clustered together. Even if you trained US workers, the parts would still need to be shipped from Asia, driving up cost and delays, workforce size and flexibility.
In China, apple can call in thousands of workers overnight to reconfigure production lines. The kind of scalability and flexibility is nearly impossible in the United States under current conditions. And to replicate these conditions, it would take a decade or more, and even if they did, no one would wanna wanna work for the seven to $10 an hour anyway, which is what these workers make on an hourly pay average in China.
In short, the skills gap isn't about coding or design. It's about manufacturing talent and infrastructure that have been systematically offshore for decades. Cook has argued that rebuilding the infrastructure and workforce in the US would take a long time, massive investment, and more importantly in which will never happen, government and industry coordination.
Right now we have a government that thinks they can just make an arbitrary decision and everything will fall into place. It is scary to think that our nation's economic future is in the hands of a group advisors who have never made anything in their collective lives. Neither President Trump, Scott Bessett, Howard Lunik or Peter Navarro have ever spent any time in any manufacturing process unless you consider bad policy as manufacturing.
President Trump is ultimately responsible for the bad advice he chooses to listen to, and apparently he has decided to ignore the advice of the one intelligent advisor he has on his team that does understand manufacturing inside and out. Elon Musk. According to recent reports, president Trump has chosen to listen, Howard Lunik, Peter Navarro, and Scott Bessett over the brilliant Mr.
Musk. So what's the bottom line for listeners and the students who take my courses to tax free millionaires? It's simple. What we're experiencing right now in the market is a relief rally. It is not a bull market and it is too soon, in my opinion, to be blindly jumping back in and buying a dip. You should exercise caution.
Now, does this mean you can never make money investing in markets again? No. There will always be places to invest and we will teach those at tax free millionaires. However, if you one want to invest right now, I would be more inclined to look at non-domestic. Um. Markets and ETFs, for instance, Europe, Spain, Germany, and Austria, while the US s and p 500 is down about 7.8% so far this year, indexes in these markets are all up over double digits.
And by the way, despite the doom and gloom I painted above, I'm still overall an optimist and would like to believe that President Trump does not wanna go down in history as the worst president since President Hoover, and that he might , soon start realizing. That he's listening to the wrong advisors.
Perhaps he will once again listen to advisors like Elon Musk and Tim Cook in reverse course before it's too late. If that happens, then the United States will see a bull market like we have never seen before because the fundamentals and the AI revolution that are driving his fundamentals are real, and they have been short circuited by these tariff decisions.
But if we can go back to course, then I believe that. We can see a tremendous bull market at the, by the end of this year, how will we know that President Trump has changed course? Well, I think a good sign would be that he fired Peter Navarro and Howard Lunik immediately. He doesn't need to fire Scott Bessett because Scott Bessett may not understand supply chains, but he does understand what will happen if the United States loses its status as the world's reserve currency.
So in summary. If President Trump starts listening to the only advisor he ever had who understood manufacturing and gets rid of the ones that never did, then I believe we can finally see some light at the end of the tunnel that isn't just the headlight on the train. So I hope that made sense. I apologize to have to get into politics a little bit, but it impacts our pocketbook, so it's necessary.
And again, I am not a politician. I don't care about politics except for the fact that they impact our country. So I think it's important that we all discuss this openly and logically. Thanks for listening. I look forward to talking to you again next week. And again, I encourage you to, to get my book Tax Free Millionaires.
It's available on Amazon, on Audible, so I encourage you to, to listen to that and to, uh, go to our [email protected]. Thanks and have a great week.
