on the way we have a talk show today so let's dive right into. the federal reserve concluded its l.m.c. meeting wednesday and announced nothing's changed rates will remain between 1.5 to 1.75 percent where it has been since the latter part of last year surprise surprise as the fed continues to try to assure the markets that they've had found a stable rate and that rate should remain unchanged in 2020 that is until they eat their words again and are forced to lower them again as a result of the virus outbreak threatens to her and growth projections money markets are currently predicting $125.00 bit rate cut this year and a small chance of a 2nd one in 2020 as such the focus of the meeting centered around 5 topics the outlook for the policy rates persistently low inflation people purchases a k. q e financial stability risk and the implications for global markets the us data continues to be a mixed bag with january's consumer confidence exceeding expectations and at the highest levels since august however december capital goods order data shipments and

core cap ex orders declined month over month the equities market is rallying to all time highs but the health of the companies is poor as earnings growth continues to decline year over year analysts speculate that this market melt up is a result of the fed pumping in $60000000000.00 a month into the market so what will happen when this all comes to an end policies expected to decide how much longer it will continue its current practice of steady liquidity injections and how to scale that unsustainable program back so low in place that crutch well the fed officials have been in talks to cap yields on short to intermediate term securities to fight the next downturn this was last used during and after world war 2 in order to help finance more spending and recovery with the benchmark interest stays so low and the fed running out of road to cut further they're now looking for more creative options to expand its toolkit. and now here to help us break down the media outlets here on the horizon let's welcome ron paul former u.s. representative and author of and the fed so dr paul it is probably not surprising

to you that the fed is keeping rates so low was there any news out today that actually does surprise you at all. oh no not really but there's been things in the news in related to what the fed's been doing and they're talking about if there's an emergency in the markets dealing to the flu. so-called epidemic they'll take care of a and i figure oh they're in the dark during business you have flu you go to the fish to take care of them and there's been some news related to that meeting today is that the fear more or less is said we'll never have the stocks go down more than 5 percent of corrections 5 percent they're always going to 3 always reassurance and i fascinate where they have because they generally like to deny the fact that they're not in the business of rigging the stock market but that's exactly what they're doing and i think they're reassuring the markets that they will be there

they certainly did the reassuring when the repo market fell apart in september so they're in the business of printing money to boost up the special interest the bond holders and the stock holders and wall street and the military industrial complex and all those things that run up our deficit but ultimately they're going to run out of cards to play and we'll have to face the consequence you know dr policies like everything you have talked about for decades now is kind of all coming to a head here we talk all the time here about the unsustainability of this propping up of the market on a regular basis so how big of a deal is it though that u.s. markets and really global markets are not allowed to adjust they're not allowed to come down at all markets are not allowed to dip as you said below 5 percent at the same time it's this good news bad news mentality right it's bad news the words really good news because the fed will bill you out and they're keeping the markets so artificially propped up at this point how do we do we'll get back to a real market. no not very easily and nobody be after

a tragedy but markets sometimes move slowly but they're never believe they win out and i keep thinking of how they rigged the market of gold you know even from the beginning of the depression a $20.00 an ounce and kept it into bretton woods at $35.00 an ounce or alternately eventually you know the market ruled it and showed that that wasn't true so they came down and i think what we're facing now in everybody's ways and i do too when the really really big boss comes where everybody knows about it but i think we're in the in the middle of that over the years they've been able to release a little bit of that air and gas out of the balloon and they could go on to the next one but i don't think they can do that anymore i think you know the next go around is going to be worse than the last go around the last go around was worse than the previous one and because the policies haven't changed the confidence is not lost we don't have a unit of account they can trust and we have the biggest burden i think it will

finally catch up to us will be the debt and to be corporate debt personal debt government debt and right now all of the confidence is still there though that they can handle it but the main thing is is there keep doing the ass things won't just. the nominal rates of a lot of these things will stay high and wages will stay at a certain level but what will happen is real value is going to go down because they are going to inflate and i think in this report today showed that 2 percent inflation rate they they can handle and we don't we want to lease 2 percent they indicated or not just close to 2 percent we want to a little bit more won't hurt and i really i believe they rolled a day that some day they're going to say and why is that for present how are we going to get back down to 2 or will get even back down that's 3 and i think that's true in some places already you know if you measure inflation of the money supply by abnormally high stocks and bonds and there's there's pretty good. inflation

there son now we've been looking at this concept of negative interest rates when president trump has been kind of floating this idea parts of europe has now and brace them so what we've seen negative interest rates here in the united states any time soon. not not right now i think that ultimately will happen but i think it when it when it does it will be a real negative and i think there are some now becoming skeptical when you hear a few people on wall street say you know this doesn't make make any sense we can't keep doing that and they can't because they have no measurement if you interfere with the price of money by interfering with the supply of money and then you mechanically interfere with interest rates like like they do eventually confidence will be lost and it doesn't say you know it doesn't protect anything because the markets are smart enough to figure and i doubt and the adjustment might not be through prices as much as the value of the dollar what the dollar is buying and the

other difficult thing is to find out exactly what is going to come what will be hit 1st and the most but it has to be unwound and and the markets so pick and choose exactly how to do it because you know the nasdaq bubble was different than the housing bubble but i think this is going to be a bigger bubble and it's going to involve just about everything i think is only a dollar a bubble and it's going to be real ruthless to the bond market and that's when we're going to lose a lot of credibility around the world you know let's talk about that very quickly also because you mention about the dollar bubble we've seen the price of gold what kind of rising steadily over the past 2 months i think we're at the highest level since 2013 right now in terms of price of gold bullion over $600.00 an ounce right now we're also seeing big point rise again cheap money cheap dollars or kind of the name of the game on wall street not right now the fed just keeps pumping and pumping and pumping is the fed ultimately going to destroy the value of the dollar and in doing so also destroy the value of savings is that where we're headed we've got about 30 seconds or. yeah they will and

a they've done the their job because it isn't a sound currency now it's just that everybody else is so bad that people will resort to it i think we've been in a very good gold market since the year 2016 when gold was a $1000.00 that's a pretty pretty good jump and i think we're in one of those periods it's going to take off and that will represent the fact that the fed and i cannot overcome the destruction of value by just print printing money and it's going to be a sad story for all of us sticking with the dollar has passed the way it's not a very good outlet for me as representative ron paul thanks so much for your time thank you i. finally happened today president trump signed the u.s. in c. a trade deal and in doing so he kept one of his biggest campaign promises of 2016 the president signing that deal and also speaking about it in an outdoor news conference as you likely know by now the u.s.

in ca that is the new trade deal between the united states mexico and canada it replaces the more than 2 decades old nafta the president explained that many people believe that this was a deal that could not get done everybody said this was a deal that could not be done too complicated too big couldn't be done we got it done and today we're finally ending the nafta nightmare and signing into law the brand do us mexico canada agreement. well so far mexico's parliament has already approved the deal but the agreement still has to be ratified by canada before it could take effect as we've explained the u.s. in ca it does not dramatically change the trade relationship between the u.s. mexico and canada though it does include some tougher rules on labor and automotive content by $400.00 guests were invited to the signing on wednesday but interesting lee not invited to the event were house ways and means committee chairman richard neal and other democrats who negotiated for months to expand the pacs labor environmental and enforcement provisions. when members of the european parliament

approved the terms on wednesday of the u.k.'s official departure from the e.u. also known as briggs if that vote it was mostly symbolic let's face it is the break the deal has been supported by the majority of the in the piece and has already passed the 1st parliamentary test me piece have also been saying goodbye to their british counterparts with some of them wearing the always united scarves the vote on wednesday marks the final stage of the briggs it ratification process. even though the u.k. announced it will allow huawei to build out parts of its 5 g. infrastructure the us seems to reject that decision and continues to apply pressure for the u.k. to reconsider u.s. secretary of state mike pump a.o.r. z u k to really look at the decision stressing national security risks a series of u.s. congressional figures also called on the u.k. to reconsider saying that this could be an obstacle to a post president in the us and the u.k. and jeopardize intelligence sharing. i'm very concerned about the u.k.'s discussion

or decision. and if. we see a lot of disagreement upstairs on obviously this issue is a peacemaker but i don't think there is an issue that has broader bipartisan support than the recognition that wall way. has been and will continue to be a national security. breach our strongest allies we've got to find a way to work through this i do recognize as well that there. you know war way we've got to put an inventor it was a national security threat it's also a lot cheaper than any of the other western alternatives. but really it just seems like the u.s. is sour about its waning employments over its allies the u.k. was seen as the leader in the euro bloc and this decision opened the floodgates for the rest of the members to decide what part hallway can play in their 5 g. networks and resist pressures from washington for an outright ban even member nations can assess the risk themselves and decide whether or not to exclude

suppliers from core infrastructure while i welcome the guidelines describing them as non-biased and fact based germany the largest economy is due in the coming months to publish its own decision on how to treat huawei now this announcement is a huge win for huawei after being banned from doing business in the u.s. and this also highlights the limited impact of a years long lobbying effort by the trumpet ministration which include everything from multiple visits to brussels to a highly publicized trial to even threats of kicking members out of intel networks if it did not comply but they could finally i think in the you case case really confront the us of that is the u.s. actually going to kick the u.k. out of the 5 no no i'm really not because because they need the u.k. more than the u.k. needs them to do it and more is not going to just kind of turning some tactics against them forcing exerting this maximum pressure it's like you're not going to follow through on their threats so mark warner the senator from virginia who was there for the cameras and say you know we don't agree on

a lot in there but this is something we can agree on and that's fine but here's what needs to happen is that if you want to make a case against what way the u.s. state department and the department of defense and all these groups that are looking into them need to provide some evidence of this and this and i'm not saying that way is right or wrong i'm not saying they do or do not work with the chinese government saying if you're going to make a case worldwide for why this company should be banned from doing business with any governments you've got to provide some kind of proof of that and so far the trip in the situation has provided. 0 there is no proof so far that they have given to any country or any world leader to say this proves that while ways doing this until they do that i think they'll continue to lose it exactly and europe is being very reasonable because they have basically no pony in the game no pony in the race right now and they just simply want the cheapest best alternative for their platform and right now sticking with always seems to be the best deal for them right out i recommend against. imports that are now for a quick break but hang here because when we return we've been following that come

back around a rise for a while now but new developments out of that airline but take a look at how the buyers have planned markets so far and what could be yet to come and as we go to break here the numbers at the top. and we're going to fulfill the true purpose is probably to the people come on you know we've all booked thank you. very.

very very prefer that you want to work. you know. paul. well yeah. i can link up my you. know all the money to the kid's name compensate the boy tonight i think.

people know that they can. move on the list that i didn't get showed up to move this because of a most an incident in the going to be out in show which the certainly must. is not so much because of my sons it is a constant that he has a few rough among the others. all of which i think. began to get i'm going. to bring everybody let.

me. ask you 1st. and welcome back now to the latest on the corona. iris as the number of deaths associated with that disease has risen to 132 on wednesday another 6000 people have been infected meanwhile as china attempts to deal with the virus on its soil the white house is now telling u.s. airlines that it is considering suspending all flights from china to the u.s. white house officials called executives at major u.s. carriers on tuesday telling them that a temporary ban on china flights is on the table and warning americans of travel to that country. c.d.c. conjunction with the state department has updated our travel guides and now

recommends that travelers avoid unnecessary travel to china well meanwhile united airlines which has the most u.s. flights to hong kong and china mainland announced on tuesday that it would cancel dozens of flights next month as the outbreak worsens and still the world health organization has not declared a public health emergency a flight carrying $201.00 americans were evacuated from the epicenter of the outbreak that flight landed in southern california at march air force base where those individuals will remain until they have been cleared by health authorities. airlines are obviously the hardest hit by the outbreak as many countries are limiting are canceling flights to china analysts are now warning that these airlines may never bounce back as the number of passengers on u.s. china flights could fall by 75 percent in 2020 as leisure and tourism travel makes up about 60 percent of the travelers as a result these flight routes will be too costly to operate and many will never reopen again tourism accounts for about 11 percent of china's g.d.p.

and this is not only includes airlines but also hotels restaurants and retail and this not only affects china as a global impact cannot be understated here as a result of this geometric progression of the factions over the last 12 days businesses in china the world's defacto manufacture and the most critical supply chain is grinding to a halt china is responsible for nearly a 3rd of the global manufacturing output and this not only includes apparel and consumer products but in the last decade has expanded to high tech electronics and auto the most valuable company apple is vulnerable to the supply chain disruption as specially as it is dependent on trial for about 50 percent of the supply chain starbucks also temporarily shut down more than 2000 outlets in china as citizens of white public areas and we work followed suit closing $55.00 offices across china while disney closed its theme parks in china and hong kong as it continues to monitor the situation and win resorts while still. open for business at the peak profit time of the year is requiring casinos to screen guess for high temperatures

all this as the number of corona virus infections has now surpassed sars the sars outbreak cost the world economy an estimated $40000000000.00 not including the indirect damages incurred years later as a result of the economic fallout. and with more we welcome richard wolfe host of the economic update so richard as we face an uncertain future we always try to find comps to see how historically we've weathered the situation so right now the current outbreak is spreading faster than sars which cost the world billions in the aftermath so how big of a hit will this be to the market and could this potentially be the catalyst that triggers a global downturn. let's separate those 2 questions it's very hard to know as you indicated how bad this thing will get the fact that it's bad at the beginning is a negative sign but the remarkable action of the chinese government i mean to basically quarantine an entire region to put i believe 50000000 people into

a kind of special situation that minimizes contact that's an extraordinary response bigger and faster than what you've seen in the past to things like this so we're going to have to wait and see whether the response is able to contain or at least limit the damage that is done number one number 2 it is already having an effect as you point out with airlines tourism and so on but i would hesitate to draw too many conclusions from that because everything depends on how long this lasts and how bad it gets at this stage it's kind of early to see much of the response that you're hearing about is political theater if you don't let flights go from the china to the united states directly you're still allowing the flights to go from china to 100. of all the places cities around the world where you change planes and go to

the united states which has been done all along anyway so you have to wait and see a little bit before the kind of overheated rhetoric of this moment to see whether that pans out positively or negatively over the period ahead yet it is interesting because with this particular virus it seems to transmit before there are any symptoms visible it was very difficult even with these airports where they're checking people simply that's pretty ineffective china certainly is at the center of the supply chain for most multinationals in the midst of a trade war a lot of companies were considering moving production elsewhere they're trying to avoid the high tariffs but for the most part they did stay put because the supply chains take decades to build up do you think the coronavirus could act as a catalyst for companies to finally diversify and move supply chains elsewhere and if so where else could they move to to replace the human capital that they have in china. well i think you've answered your own question i don't think at this point there's any chance that any major company is going to move for all the reasons

you've given but let me give you a couple more this kind of a virus can also happen in the any other corner of the world chinese economy is in better shape to prevent it and is in better shape to deal with it if it happens than most other countries in the world not all but most so if you're going to move you would have to believe that where you're moving to is in some way less likely to either have this outbreak or 'd less able or better able to contain it and that's simply not the case no one's going to move from china to western europe or north america because the differential is why they move to china in the 1st place if they move they want to go to another low wage low regulation area and that's precisely where the risk of another virus or $27.00 other problems also reside so of just those with tariffs they're not going to spend an enormous amount of money moving

before they see how long these will last because it's a big expense and what they suffered in china can happen wherever they might go so the best strategy as they're all deciding is to stay put and see how it evolves now we just talked about the airline industry as being one of the hardest head boeing just reported its 1st annual loss in more than 2 decades as cars from the 737 crashes double to about $1000.00 in fact there are as car was just an absolute disaster this morning but the stock is up today over 2 percent so what's going on here. well i think what you had is the anticipation everybody who is involved in this industry knows by now what the other disaster the boeing company has proven to be in making the bad decisions about safety that led to the. as to crashes in not being forthcoming about them in trying to delay afterwards we've seen the

complicity of the regulators in the government how they work with boeing it is a colossal disaster and it's going to affect boeing for years to come the ups and downs of one or 2 percent that's more the gambling going on lots of people sold boeing shares driving them down they are going to be always in that situation a few folks who say well i went too far down too fast it will bump up let me buy some shares get a little bomb sell them again it's a quick turnaround that's what you're seeing here the real problem is that the major producer of airline airplanes in this country basically has ceded the dominant world position to the air bus industry in europe and that is a profile on the shift part of many in which the united states is losing its stahmann ince and other parts of the world china europe and so on are gaining and

we're going to see more of that and these the long run accumulated effect of that that's the most important thing to keep focused on only about 30 seconds left or some very quick i just want to ask you about this you know 2020 started out fine we had the phase one deal and lot of thoughts on that but the holiday sales numbers are pretty good high hopes for a global rebound in 2020 and then the coronavirus hit do you think this sets us back significantly again about 30 seconds here. very quickly the real problem is that our capitalist system has a downturn on average for 250 years every 4 to 7 months we've now had a sunni 47 years we've now had 10 years since the last crash everybody who knows how capitalism works knows another one is coming there's no reason to doubt it so everybody is very nervous and you can see almost anything like the coronavirus being that type. the list but it's not because it's the cause it's because everybody is waiting for something to do what we know is coming and that of course

is the biggest fear of mr trump and the g.o.p. because if it comes to soon the election is lost for them living on borrowed time professor richard wolfe thank you so much for your time thank you found out that by this time you can catch who must undermanned on the brand new portable t.v. app available odd smartphone the google play and the apple app store by searching for about t.v. or stream us to your t.v. by downloading portable apps on apple t.v. and online at portable di p.v. viable t.v. will be available on more devices very soon and as always you can hit us up at youtube dot com slash boom bust r t we'll see you back here next time. the russian state television propaganda machine propaganda outlet propaganda tools we

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