We haven’t yet hit the depths of our current economic crisis, says financial expert Carol Roth. Author of ‘The War On Small Business,’ Roth explains why she likens today’s economy to a ‘horror movie.’ But the situation in Europe is even worse. In fact, the current energy crisis there gives Americans a glimpse into our own future if our leaders don’t turn things around soon. Glenn and Roth describe why a recent alert from Switzerland is ‘terrifying,’ what the U.S. can do to prevent a similar future, and the ‘anti-human’ effort spreading throughout the world…
Transcript
Below is a rush transcript that may contain errors
GLENN: The number of Americans that describe themselves as economic suffering, is now at the index highest since the poll started to be taken. It is the highest at 2008. More and more people are saying that they're not thriving. It was about 60 percent in June 2021. And now July, it is 51.2 percent. That's still pretty good. Half the country still considers themselves thriving. But what is -- what is concerning is the number of Americans who are suffering from that. There's a few things to mention to you here. Democrats have put in the climate law, that could be a game-changer. It was in the Build Back Better. Or inflation reduction bill. They put it in the last hour, to pretty much deal with the EPA ruling from the Supreme Court. They now can. And have the money to regulate all kinds of things that they say are toxic to the planet. One -- one other thing. MorganStanley says, cash looks relatively attractive right now. I wanted to bring in Carol Roth. She is the author of the War on Small Business. And former investment banker, who left the dark side to wield the power of the force on the light side. She has a new piece out for TheBlaze.com. Stop trying to turn America into Europe. Europe is self-destructing. And we won a hour, so we need you to follow suit.
Carol, I keep hearing all kinds of warnings about this fall, and what's going to happen. I'm really concerned. Is that real? Is that not real?
CAROL: Yeah. I've been calling it sort of the horror movie economy. I feel like everyone is taking this breather because it's gotten some data that doesn't look quite as bad as the really bad data. And so I likened it to a horror movie, where all of a sudden, everybody thinks, oh, okay. The killer is dead. And we're going to walk back into the shed, that has all the chain saws. Don't do that. The killer is not dead. That's not where you should be. So I really do think, it's this pause. We haven't hit the depths of sort of the economic recession that's potentially going to come later this year into next year. And, you know, the rolling over of the labor market.
And some of these bright spots, I think, are going to start to deteriorate.
If you just look at the consumer, which is 70 percent of our economy. You know, they have -- it's a book called Savings Rate, is at the lowest level since the great recession financial crisis. And we know that credit card debt is up double digits, since the beginning of the year. So the financial balance sheet of the average American is weakening. And, you know, all of these things are likely going to come together, on top of issues. You know, again, with energy. Where we've seen a little bit of a reprieve here.
GLENN: I saw a story coming out of Switzerland, about how they're begging the people to be prepared for what is coming with food shortages, and some sort of an economic collapse, because of the situation with energy.
And, I mean, it is spooky coming from the Swiss, who are usually just drinking their hot chocolate, and they're happy.
When you're talking about poverty and social unrest, that's a little terrifying. And it seems to be happening all over Europe. Are they ahead of us in real economic trouble?
CAROL: I certainly think they are because they are also ahead of us in this anti-human flourishing energy policy, in terms of, you know, turning over, you know, what could have been a great source of energy. And being more dependent on sources. Even though, we had some of that here in the USA. You know, certainly not anywhere near the extent they have in Europe. And fending on the particular country. The countries like the Netherlands, which are huge exporters of food, that are now saying, oh, well, you can't do this and you can't do this. And try to take away some of the farming, at the time, when we really need it. So it really seems like there is this sort of anti-human effort that is going on across the globe, starting in Europe. And now migrating to America. That is basically like. We don't care if you're suffering. Because we have this great initiative. That we're pushing. And we don't care what the fallout is from that. And, I mean, it's terrifying. This is something that is terrifying. It's why it's so important that we push back on that lunacy. If Europe wants to do that, that's fine. But our founding fathers won a war so that we didn't have to go across the pond and take dictation from them. We need to say, no. This is not the path that we're going down. And, unfortunately, it's the path that the Democrats want to go down.
GLENN: So I was talking to Vivek Ramaswamy. How much of an impact. He now told me $250 million in the first two weeks. How much of an impact, do you think this can have on moving us toward energy companies, saying, I don't care what BlackRock says?
GLENN: Well, you know, the big asset managers, I think between the big three, have something like $20 trillion in asset under management.
So 250 million is a valiant effort. And I'm not trying to downplay. Because we need to start somewhere. But, you know, it is currently a drop in the bucket, until we get some scale. And I think it's important that we need to have more companies that are doing that. The thing that you have to understand about companies, is that they're economic animals. And when it is no longer to their benefit, to be pushing this ESG stuff. It starts to go away. It starts to go sideways. And so it's really important for all of us. Whether you have your money in a pension fund, or a 401(k) that's managed by a third party, whether you're directly investing. You should be writing to where companies and saying, we don't want this. We want to have human flourishing. We want to have a variety of energy options. And if you continue down this path. Pull your money. Because the economic pain is the only thing that is really going to shift and change us.
GLENN: So I was looking at the stability of the world. We have Joe Biden, who is not stable. We have Vladimir Putin, who looks stable. However, with the bombing over the weekend, it could go unstable. I really believe that was probably an inside job. But it may not have been.
If it is Ukraine, we're going to be blamed, and things will get really ugly, quickly. There's something else, too. That nobody else is talking about.
The election of President Xi is coming up in November. This is the last election. He doesn't become a permanent dictator, until and unless he is elected this last time in November.
And when Nancy Pelosi went over -- if you remember, the press was saying, oh, Xi won't stand for this. He'll shoot her plane out of the sky, which is a crazy thing.
However, I'm told, from people who have deep connections in China, that this was the pushback on Xi, trying to get people to say, he's weak and dishonorable. Because to say, he allowed this to happen. That's why they were pushing these extreme scenarios, in all of their press.
So the entire world is unstable. And Vivek did a -- or a podcast with me, a couple of weeks ago. And he told me about the investments in China. And how they're really Shell organizations. You're not really investing in China. And I'm not sure people really understand that. And if China wants to pull out, and wants to cripple us. Wouldn't all they have to do is enforce the laws of, there are no investors that are foreign.
CAROL: So, yes. Any time you have a foreign company, that is listed in the United States, there are a couple of different entities within that may be involved, where you don't necessarily have direct ownership. An ADR. An American depository receipt. Is sort of a claim on shares done through a bank.
GLENN: Wait. Wait. Wait. ADR. That means you keep your money on deposit?
CAROL: So what it means, is that there's an intermediate bank that goes and haves sort of a foreign subsidiary. They buy the shares, and they issue you the claim on those shares. So -- and this is done, by the way, by the biggest companies in the world. The Sonys of the world. They are per the SEC, thousands of these. Over 70 countries. So you don't necessarily have direct ownership there. The thing with China is that they have, you know, on top of the ADRs, another layer. These -- these variable interest entities. VIES, Which I think is what Vivek is talking about. And this is a mechanism to try to talk about the idea that you can't have foreign ownership of anything in China.
The reality of the situation, and I think that the lead that is very clear. Is that nobody really has any ownership of anything in China. Because they are a Communist country. I mean, even if you are a Chinese citizen, you buy a house, you don't own the land. You get a five to seven-year lease there. So the reality is, China does not need these VIES to crack down. It can do whatever it wants. I don't remember if you remember last year, there was a huge company out of China called Didi. It is their ride-sharing company. It's like the Uber of China. They decided, they wanted to list in the United States. China was not happy about that. And they were worried that with audits and disclosures, that secrets were going to leak to the United States. That is what they said. But really, they just didn't like the power going over here. And Didi flouted that power. And what did they do? They opened an investigation, and within months, they delisted Didi from the stock exchange. And tens of billions of dollars of shareholder value was lost, just because China said, yeah. We don't want you to do that. They disappeared Jack Ma for a while, the head of Alibaba, and they put the kibosh on (inaudible), which is their huge financial services firm that owned Ali Pay, was potentially going to be one of the largest companies in the entire world. So they can exercise dish it doesn't matter about these entities. The fundamental underlying issue is the fact that the communist control. And on top of that, the other thing we haven't talked about, is the rampant thought that often happens with Chinese listed companies. So if you're going to be enlisted in China, that little piece of how it's structured is one small concern over a whole --
GLENN: It seems like this is another CDO situation that caused the breakdown of '08. I think we have a bigger CDO, if I'm not mistaken. We have a bigger CDO problem than we had in 2008. Right?
CAROL: Potentially. The big issue of what happened, in my opinion in 2008. Was when they created these securities, what happened with these other entities that sold insurance on securities? That basically said, if something goes on, we will pay with insurance. Just like you insure a house. The problem is they sold like exponential factors more insurance than there were products. If you had ten houses in your neighborhood, and insurance policies were sold on 1,000 houses. Then every time one house burned down, you had to pay off for 100. That's really what caused it.
Not to say, that there wouldn't have been a crisis. There still would have been. But what really caused the depth of that was that exponential insurance that sold --
GLENN: Did we solve that problem?
CAROL: You know what, I don't know that we did. They tried to, you know, reign it in some. But the reality is, there were all kinds of derivative markets, that are truly just gambling. And so there is a lot of systemic opinion, in my opinion, in the market. Because there are products that are not tied directly to the direct ownership of something. That's why in the face of, you will own nothing, from the World Economic Forum. That you want to hold something physical, as much as possible. Even with gold, you want to hold physical gold. You don't want to buy an ETF. Because that ETF may or may not have the gold. It may be a promise. So the closer you can get to an actual, physical ownership of something, is your best way to ensure that you actually do own something.
GLENN: Carol Roth, you can follow her on her website, CarolRoth.com. It's also Carol J. Carol J.S. Roth on Twitter. You can follow her there, and she has a brand-new article out on Blaze.com. TheBlaze.com. Trying to -- stop trying to turn America into Europe, is the name of that article, you can find now. Carol, thank you so much. We'll talk to you again.
