U.S. Dollar Will Lose its Reserve Status, “We Fumbled this Big Time”: Charles Payne
“The Fed is on the verge of making a monumental mistake,” warns Charles Payne, host of Fox’s “Making Money with Charles Payne.” Speaking with Daniela Cambone, Payne criticizes the Federal Reserve’s decision to hold interest rates steady at a 23-year high, arguing it will not benefit the economy. He also lashes out against the Fed’s “data-dependency” approach, questioning, “What data exactly are you looking at? Are you looking at late payments? Are you looking at bankruptcies?”
On recent reports of Saudi Arabia breaking away from the petrodollar system, Payne acknowledges that de-dollarization is happening. “We’re not doing the things that come with the sort of fiduciary responsibility of having the world’s premier currency,” he says. He also advises people to stay flexible about the city where they buy their first home and to start saving. Watch the insightful interview now to learn more about Payne’s views.
CHAPTERS:
00:00 De-dollarization
5:48 HSBC statement about the US dollar
7:21 Fed rate cuts
10:58 Job market
13:50 People can’t retire
16:52 Housing purchasing
20:44 Stock market
23:39 Investing in precious metals
24:58 Future of America
TRANSCRIPT FROM VIDEO:
00:06
Hi folks. It’s clear based on many of these interviews that we are living in precarious times. And that’s why it’s imperative to build a strategy based around owning physical gold and silver. If you have not done so yet, I urge you to book a Calendly appointment with one of my incredible colleagues over at ITM Trading. It’s super simple to do. It’s a free information session and you’ll just walk away with a wealth of information.
00:34
You can do so by booking an appointment in the Calendly link in the description below of the video. That said, let’s get to today’s interview. Hey, this is Daniela Cambone. Welcome back to the Daniela Cambone show with my guest today. He is the best to do it. Charles Payne joins me, the host of Making Money with Charles Payne. He’s also the author of Be Smart, Act Fast, Get Rich, Unstoppable Prosperity, and his latest
01:02
unbreakable investor, which I read with great enthusiasm. Charles, welcome to the show. So nice to finally get a chance to speak with you here. I know, golly, all the hurdles, right? And then all of a sudden we’re still going through hurdles, but this was meant to be, so we’re here. It is meant to be. They don’t want us to tell the truth, but we’re gonna give it to the people anyways. No one can stop us. So thank you for joining us from your cell phone and making this happen.
01:31
I want to talk about your book, which is a great read. You offer so much pragmatic advice in it, becoming an unbreakable investor. We’re going to talk about that. But first I want to start with a topic that has gained traction again. This debate over de-dollarization. Is it happening or not? I say it has picked up steam because there have been unconfirmed reports leaked out of
01:59
Some are saying this is fake news. Others are saying, no, it’s absolutely true. But what we do know, Charles, is that Saudi has indeed joined Enbridge, the cross-border central bank, a digital currency project involving the central banks of China, Hong Kong, Thailand, the UAE, and Enbridge does not plan to support dollar payments for now. On top of all this, people are coming out of the woodworks, including Congresswoman Marjorie Taylor Greene.
02:29
Saying america’s demise will be at the hands of the bricks nations because they’re not going to want to use the dollar They’re picking up steam so No shortage of news surrounding de-dollarization is my point And I bring it up because I know you’ve had some comments about how you feel in your lifetime You wouldn’t be surprised that this would happen Talk to me No, you’re absolutely right. I would not be surprised. In fact, I think the only reason it’s it’s happening in slow motion
02:58
is we’re not the only sort of feckless nation out there, you know, sort of with these sort of unsustainable debt levels and things like that. We’ve got other things going for us that I think we’re also pushing the envelope, the rule of law, and those sort of things, the largest military in the world. And of course, we’ve been established for a long time. But so was Great Britain, right? I mean, you think about where they were and how over during the 1900s, beginning with the Second Industrial Revolution,
03:27
which they’ve kind of spurred with the locomotive, but we took the baton, if you will, and we just surpassed them. And they were stretched too thin as a country, and we’re too stretched too thin as a nation right now. And again, I think the only reason that we still enjoy this perch is because there’s no other alternative per se right now. I know there’s a talk of a basket of currencies, particularly brick nations.
03:56
And then and I think one of the more interesting Changes though has been in terms of asset reserves world asset reserves gold has come on Dramatically now it’s taking a lot of share from the euro, but it’s also taking share from the dollar That’s right. So yeah, so I mean it’s definitely it’s you know There’s a lot of people who kind of like just dismiss this out of hand It’s like crazy talk and it’s ridiculous and those are the folks that always make me know it’s gonna happen because
04:26
That’s sort of arrogance, right? I mean, it’s not ordained, and we’re not doing the things that come with the sort of fiduciary responsibility of having the world’s premier currency. So it’s not gonna happen overnight, obviously, but the pieces, to your point, are being put in place. And the petrol dollar, the development of the petrol dollar was one of those things that cemented the dollar as the world’s reserve currency.
04:51
And so that does start to unwind. And we already know that Saudi Arabia does transactions and other currencies, particularly as they have a cozier relationship with China. So it really is amazing to me. I think India is something of the wild card here, the I am bricks, and the world’s largest democracy. They just had a major election. I was somewhat surprised and a little disappointed. Modi didn’t win by a larger margin. So he’s got this coalition government, but
05:20
On one hand, listen, they love buying that cheap Russian oil. And the other hand, they do have a sort of natural rivalry against China. But I think they also just want to probably be in a position, a stronger position. And being in the BRICS, as opposed to just being another nation that America does business with, probably helps them. Well, to your point about folks dismissing it, I saw HSBC quickly issue a comment from
05:47
Jim Steele, who’s a good friend of ours, he said, the U.S. dollars placed as the world’s reserve currency won’t be threatened for decades. And I mean, HSBC is not the first bank to put out such statement. Um, but you know, getting back to your point about how the U.S. has really fumbled this, right. Has fumbled and not taken enough care of the responsibility of being the world’s reserve currency. Is there anything the U.S. can do to pick up the pieces and save itself?
06:17
Yeah, so the sort of sacrifices, I guess, that we would have a few years ago, not long ago, maybe we were demanding that Greece and Spain and those countries, those reckless spenders and those nations with high debt levels, we were demanding sort of, you know, that they tighten their belts a little bit. And we got to tighten that belt a little bit. You know, I think the problem is we started really complaining about this as a nation, maybe after the great financial crisis.
06:45
and it became a huge political issue. People were worried. You saw commercials about throwing granny off the cliff, those sort of things. And then we didn’t go off a cliff. And then next year came, we didn’t go off a cliff. And then next year came, and I think there’s sort of now this false, very arrogant notion that, well, we’ll never go off the cliff. And I’ve had some brilliant people come on my show telling me that we can print forever, that we can keep this sustained forever as long as we can pay the interest. Well, the interest is a trillion dollars right now. What’s it gonna be later on down the road?
07:18
Absolutely. And I want to also talk about the Fed with you now talking about, you know, what we could do. We saw last week they held a rate steady for the seventh consecutive time and suggested only one cut this year. Thoughts on this? I mean, thoughts on what the Fed is doing? I mean, on the flip side, we’re seeing data. I mean, they keep saying they want to see data, but I’m seeing data that the consumer has hit.
07:43
a wall here, Charles. I mean, what are they going to do something to give some relief to the consumer here? It is so amazing. The big mistake they’re making and that all these economists make is they study aggregate data. You know, so yeah, you know, I always say, imagine if there’s a bucket and there’s two trillion, whatever dollars of water in there. And if you tilt it a certain way, you could there, all of that could be in just one corner of the bucket. The other will be bone dry. That’s where our economy is right now.
08:13
No, the bottom half of the economy has been tapped out. The rest are the, you know, the middle income, little upper middle income, they’re living on borrowed time, all time high credit card, that all time high interest rate levels, all time high auto rate levels. And I know, listen, they come back, the naysayers have come back and say, well, it’s a percentage of GDP and those sorts of things. But again, I think the Fed is on the verge of making a monumental mistake. And the focus has been on not cutting too soon and not being Arthur Burns.
08:42
But by keeping rates this high, they’re being truchet, Jean-Claude Truchet, who made the mistake of actually hiking rates, right? Going into the great global financial crisis, because he had some things he was worried about, not realizing that Europe was already on the cusp of a massive recession along with the rest of the world. Also, the data dependent part bothers me a lot. Which data are you looking at?
09:10
It’s spreading your horizon. Are you looking at delinquencies? Are you looking at late payments? Are you looking at bankruptcies? What what data exactly are you looking at? you know, I had the pleasure of interviewing a guy who was at the Bureau of Labor Statistics and He acknowledges that you know, they need to blow the system up But they take so long and they do all these back testing and all these sort of things that if they ever do have a come To Jesus moment and say hey, you know what our system is flawed
09:39
for instance, the jobs report. Are you kidding me? That’s the most important data point. And right now 43% of respondents even bothered to reply to the survey. You’ve got a household survey that differs 1000% from the establishment survey. So what exactly is the Fed? What data are they looking for? And why did they hire all those PhDs just to be so-called data dependent? Wait for the numbers to come out. They don’t have to wait for the numbers to come out.
10:07
This isn’t too important because they know there’s a lag. If they acknowledge the lag effect when they started hiking rates, they’ve got to acknowledge the fact that if they get caught off sides, there’s gonna be emergency rate cuts. Now, going back to the 70s, when on average when the Fed cuts rates, our stock market goes down 23.5%. Why? Over 195 day period, why? Because they’re always late. And even those rate cuts come too late to have an immediate effect.
10:36
So what’s happening then is we’ve got an economy that’s dominated by a slower economy that’s in a recession and they can’t turn, they can’t stigmatize fast enough, but it’s reflected in the stock market. I don’t know why they allowed a pendulum to go from one end to another the way they do, but they’ve always done it and it looks like they always will. On that point about jobs, Charles, because obviously they would say that’s the data they’re looking at. And I get it, we had hot main numbers, but on the flip side, look at job openings.
11:04
Tanking. So what’s the real truth when it comes to jobs? What’s your take on that?
11:10
The real truth is we’ve created a lot of, we’ve got a bifurcated economy. So on one hand, we’ve got, we have created, we did create a lot of leisure and hospitality jobs as people went out there and they did their revenge travel and their shopping and sports on restaurants. You know, I don’t, I’m gonna paraphrase here cause I don’t know the exact numbers. I kind of forgot them, but before the great financial crisis, something like
11:38
10% of Americans have passports and now it’s over 50%. So everyone’s traveling and those sort of things. So we needed the lower paying jobs and that would bolster the number. What I look at though is employment to population, which is still down. But I also look at our weekly wages because average hourly earnings means nothing if you lose a couple of hours a week of work, right? Because that’s what employers have been doing.
12:04
to keep people on the books, they’ve been giving them less time. So ultimately it’s what your check is. And again, the Fed talks too much about average hourly earnings and those sorts of things. I think the job market is coming down a lot faster. I think everything in America is coming down faster than the data shows. I keep saying as an ode to Ernest Hemingway and the sun also rises gradually then sudden. Right? Yeah.
12:31
And that’s what the data, I’m telling you, we’re going to wake up one day and all the data will look like it fell in a hole. And then the Fed’s going to be scrambling. I mean, we take retail sales, the retail sales number. Even that CPI number that was a little, you know, that CPI number in my mind was down because of a lack of demand, all right? A lack of demand, how ironic that airlines where everyone’s supposedly traveling TSA data is through the roof.
12:59
that airlines would have a pricing problem right now, that restaurants are really starting to see their numbers dwindle, that even five below is too expensive for the average American. So people are shopping at deep, deep discounters like Ali’s. The numbers are out there, the evidence is out there. Yes, and more evidence, and I know you’ve been talking a lot about this saying, we’re not talking enough about this as a whole, as a country, about people who can’t retire.
13:28
Cause I can’t tell you how many people are writing to me saying they retired and then had to go back and take on part-time jobs, Charles, cause they can’t make it. So more than one quarter of us adults over age 50 say they expect to never retire and 70% are concerned about prices rising faster than their income. This is according to an ARP survey. Thoughts on folks wanting to retire and they just can’t. Where’s the American dream?
13:57
It’s it’s I’m trying to find the right word. The word that popped in my head was it was being hoarded, but that’s not really the right word per se. The financialization of our economy where more money is put into stock buybacks than capex where more money is put into paying out dividends and believe me, I’m a you know, I like companies that pay out dividends as a sign of success, but
14:22
There’s too much focus on the financialization of our economy instead of really building an organic growth economy. And as a consequence, it’s left too many people out. More people are cogs in a well as opposed to being able to achieve or pursue their own personal American dream, to your point. And something’s going to shock the system. And I think.
14:47
I think we’re seeing it now around the world because it’s not dissimilar to what we’ve seen in other countries. This election cycle, I think we’re going to see big time changes. We saw in South Africa a unity government. In France, they’re having a snap election. Macron is very, very worried as he should be. Germany. And again, these places, they’re far ahead of America. So their living, live experience, experiment.
15:16
for us to learn from instead we’re going down the same path. And that’s, you know, not to bring up the book too soon but one of the reasons I wrote the book is because I really believe that everyone’s got to find a way to be invested in these markets. I mean, this is where all the money is being made, it’s being generated. You could argue over the fairness aspect of it. You can argue over, you know, the system that, for instance, passive investing. So…
15:43
Billions of dollars go into passive investing every single day. And the mission is that you’ve got to buy the hottest stocks, right? When you buy the hottest stocks, the stock price goes up. So billions of dollars comes in the next day and what would it have to do? They’ve got to buy the hottest stocks. When they buy the hottest stocks, what happens? They go up. It’s a self-perpetuating machine. It’s a virtuous machine now until it breaks down the day that maybe a billion dollars, a few billion come out. It starts to reverse. But for right now.
16:12
It’s always been the best money making machine in the world, but to this point, it’s on steroids. But people are going to have to save longer, sacrifice more. Don’t be like your government. Don’t be like our government. And, you know, this whole FOMO, because only our government can go out there and print more money, take on more debt. The average person can’t. And you and it’s our society promotes leisure.
16:38
It promotes work-life balance, all of these catchphrases that mean, hey, party more, work less. And I’m telling people that you’ve got to push back against that. Let me ask you, Charles, before I want to get back to the stock market and your book, but one more point about the American dream, because I saw a stat that the age is going up. You know, most people now buying their first home at, you know, 35 at a minimum, you know, compared to 1981, which was, you know, 29.
17:08
Um, so I know you’ve said, don’t give up on your dream of buying your first house, but housing, top of mind for young voters when it comes to the election, they are freaked out that they’re never going to be able to afford a house. Right. Any advice there? Well, they’re, they’re legitimate, legitimately freaked out. So I’m not going to dismiss that at all. Um,
17:38
The system, you can argue, is somewhat, you know, they look at it as being unfair. I mean, I’ve seen the TikTok videos where they have a bunch of old folks chilling out. You know? And they’re like, yeah, they bought the house for $100,000 and sold it for $3 million without making any adjustments, right? So there’s some resentment out there. You know, I think what’s gonna have to happen, honestly, is we need better regulations.
18:05
right, to build these homes because they’re so expensive with all the red tape. It bothers me a lot. The degree that Wall Street has gotten involved in the housing market, particularly when houses get hot, people were bidding on homes and losing them to these faceless entities that never even went to the house. Right, so someone would save up their money for 10 years, a house they’ve been looking at for a long time.
18:30
They make a bid for 400,000, all of a sudden a $440,000 bid comes in from some PE group, some private equity group. And then the private equity group will rent it out to them. And it’s a hell of a scam. It’s a hell of a, it’s legal. Some people think it even helps the housing market. I don’t. I think it’s, I think it’s exacerbated the shortage of supply. And so
18:56
One thing people are probably gonna have to move, young people are gonna probably have to come to grips that everyone can’t live in a hip city. Forget New York City, Charles. Forget New York City. And by the way, you can visit. The stuff you wanna do in New York, you can always visit. Come in, go to a show, go to a good restaurant, then go back home. I do it every day. I visit every day. Lucky you. I go back to the trees, to the swimming pool, to the house, because I mean, listen, the way I live in Jersey, it’s nice.
19:26
but it would cost exponentially more even in Manhattan. And that’s the point. The good news is though work from home is true, is real. That’s a true paradigm shift, right? So you can move further away. You can probably find a dream home that might not be in the town or city that you want it to be in, which could be fine. Or you can wait for the next recession. I’ve been telling a lot of people, you shouldn’t go to school. I’m serious. Listen, save up your cash. Save up your money.
19:55
And when the tables turn and it’s a so-called buyer’s market, leap in there, that’s when you make your move. You already have a few individual cities, Austin, a lot of cities in Florida. And we saw this before with the housing boom in Phoenix, for instance, when it became a bust. There will be amazing opportunities out there. If you insist on living in any of these places, then you’ve got to gut it out. And yes, it might mean you get your dream home at 34 and your parents got theirs at 28, but you’ll still get it.
20:25
But the discipline involved in doing this and being prepared, you know the definition of luck, right? Absolutely. When preparedness meets opportunity.
20:39
Charles, I want to get to Unbreakable Investor now because like you said, for you, the stock market is the greatest money making machine. And I know you’ve been critical of folks, including people like Harry Dent, who’ve come on my show, touting the collapse of the stock market, saying he’d retire. You know, like he was so committed to the market crashing and you’re saying so many people missed out on making so much money listening to folks like Dent.
21:07
but you brought up the fact that you absolutely see the fact that markets on steroids. So how do you deal with the fact like, yes, it’s on steroids and deal with the fact that it could end at any moment? What’s your game plan? If I’m lucky, if I’m lucky, I’ll live through five, six more market crashes because
21:34
When you say, how will it end? I always find that to be the most intriguing part. And that’s the kind of the way people like a hairy dent communicate it. When it goes up for 10 straight years, that’s not the end. The end is only when it goes down. Only when it has an occasional crash, that’s the end. Let me tell you something. When the next time this market crashes, I’m gonna be buying stock with both hands.
22:02
I mean, as much as I can, because occasionally it does get overbought. It does get overvalued and guess what? It crashes and guess what’s happened every single time. It’s gone back to create an all time high thereafter. So the biggest mistake is you have to, if you’re going to be in a stock market, it’s got to be a lifelong endeavor. Hey, me, if it’s a lifelong endeavor, that means you’ve got to commit to putting money into it all the time.
22:29
Now, if you think you’ve become a good enough stock picker and those sort of things, fine. You wanna be more aggressive with your portfolio. The biggest mistake people make is they’ll buy one stock and see how it works. And that one stock can go from 10 to a hundred dollars a share and they’re like, oh, I kinda dig this. And then they go from a hundred dollars a share to one. And then like, oh, the market sucks. Yeah. So you gotta be- Establishing- Yeah. Establishing realistic expectations.
23:00
managing risk Accepting that from time to time you will take a loss and sometimes it’ll be bigger than you want But the stick to the nests of it is just staying in the stock market You know fidelity about ten years ago did this research on And I found that their best investors of all the people all their clients were the ones who were dead Because they never panicked they never sold on down days
23:29
That’s absolutely brilliant. Yeah. One more point about investing. I know you mentioned gold briefly before, and I know you’ve spoken about the rise of gold and how it’s really telling of what’s happening in the world right now. Obviously a lot in my, a lot of people in my audience are invested in gold. I mean, what’s your take on owning precious metals like gold, like silver during these times? I love it. Um, I really love gold. Um, I prefer physical gold.
23:57
And so, you know, gold bars, the little slender ones or the coins. I think there’s a place in your portfolio that might my number had always been 5% of my portfolio. It might go higher, but I’ve also bought some Bitcoin in the last couple of years. But I do I do love gold. I think here’s the way I put it. Gold is the greatest store of value ever in history in the history of mankind.
24:26
people try to make the Bitcoin gold battle. I think Bitcoin has the opportunity to be the most, to outperform all other assets over the next five years. But in terms of store of value, when you know what hits the fan, gold will always be an amazing store of value and people, everyone needs to own a certain amount depending on their risk tolerance.
24:51
Finally, Charles, we started by talking about the de-dollarization. I mentioned Congresswoman Marjorie Thomas-Green saying this will be the end of America and this is how they will shut down America. Just overall your thoughts, where do you see America headed? Are you optimistic, pessimistic, neutral? Where’s Charles at?
25:21
I’m a by nature naturally I’m a rose colored glasses kind of guy. Yeah. But there’s something that the former premier of the USSR of Russia, the old Soviet Russia said that always stayed with me Nikita Khrushchev that we will defeat America without firing a shot. The inference there is that America would defeat itself.
25:48
You can argue that Rome defeated itself. You know, where it became so lazy and, you know, I mean, and the elites would eat as much as they could, then they would throw up and someone would clean it up and then they’d eat more. You know, I mean, just, or that British, you know, the British Empire destroyed itself by being overextended. And then not only being overextended, but, you know, they had all these places, China and India and…
26:17
And they would send their worst people out there because the quality people didn’t want those outposts, right? They didn’t take care of what they were in charge of America is well on its way down that path right now where the elites have everything They own communications they own the assets and and they get and they get to make the rules or change rules So i’m eternally optimistic
26:45
because of where we’ve come in such a short period of time as a nation, as this upstart nation that was not perfect, obviously, but this notion of becoming a more perfect union is our key ethos of this, of America. And as long as we remember that, we’ll make the right adjustments because we’ve always made the right adjustments. But I do see near term, some problems. I do see near term.
27:12
where there’s gotta be some sort of upheaval. Something has to change. And when I say something has to change, I don’t mean paying off the college loans, paying off the loans to college students. I mean, we’ve gotta really make sure we find a way to get that American dream, the availability of it to more Americans.
27:40
I think the number one topic in our country is education or lack thereof. Starting in kindergarten, tougher curriculum. I think we need to believe in capitalism again. The government is destroying us. It’s a beast that feeds on itself.
28:01
And then just allow people to go out there and do what they want to do instinctively. You know, I, you know, I tip my hat. We have more, when you look at the numbers of entrepreneurship, you see how many people come to this country and built, started businesses so much at a much higher rate than people who were born in this country outside of America. You can see it. Wow. You growing up in a small village in India, and you’re looking at this, you’re looking at America like, wow, look at this inside.
28:31
You can’t. It’s hard. Every day you’re being told this is wrong, that’s wrong, this person doesn’t like you, this is… It’s just we see the, you know, the old saying, you can’t see the forest for the trees. It’s like in New York City. How many New Yorkers have never been to the Statue of Liberty? It’s a weird comparison, but the point is… The point is, is that we’ve got to find a way to make Americans believe in America, because America’s still intact.
28:59
But not enough Americans are taking advantage or believe in it like they did before. Wow. What a profound statement. Shaw, you gave me goosebumps with this. I mean, we need folks like you in politics. That’s the problem. I’ve been asking a lot, a lot.
29:17
Well, hopefully one day, maybe there’ll be a pain component ticket. You never know. Let’s do it. Okay. I love this interview. So before the folks come at me, why was Charles on his cell phone? It’s because it’s the message that counts and we wanted to make it happen. So save the comments. Yeah. We wanted to make this interview happen and we did. Charles pain. You’re the best.
29:44
Catch him on Fox and don’t forget to get his latest book, Unbreakable Investor. Like I said, it’s a great read, great advice, even quizzes you in the book. You have to pay attention to quizzes. But honestly, entertaining, informative, go get it. Charles, we’ll speak to you soon. Thank you so much. Daniela, thank you so much. I appreciate you. Really, you are so great and I appreciate being able to do this. Even if I had to do it on the phone, it was worth it for me. I appreciate that, Charles.
30:14
So much love. I love it and we love you all watching. So be sure to stay tuned Don’t forget to sign up at danielacambone.com to stay on top of it all. That’s it for me
SOURCES:
https://en.wikipedia.org/wiki/Jean-Claude_Trichet
https://finance.yahoo.com/news/fed-keeps-interest-rates-steady-181826650.html?guccounter=1
https://cryptodnes.bg/en/brics-prognoza-dominaciyata-dolara-top-banka/
