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So I have written, count them, five books now. But each time I'm in the writing process, I stay at an Airbnb. I love to stay at an Airbnb. When I was actually first launching this show, I was at an Airbnb in Arizona. It was so peaceful. It was stunning. I could be productive and comfortable. The Airbnb was also surrounded by a ton of javelinas. If you know Arizona, you know they're like wild pig javelinas.
creatures, but honestly, I love them too. Being away for work, for fun, or both is a perfect opportunity to host your space on Airbnb. And if you think that hosting is overwhelming, I have a solve for you. With Airbnb's co-host network, it's easier than ever before to host. It's also a great way to earn some extra cash, which I know we all love. Now you can hire a quality local co-host to take care of your home and your guests.
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Oof, yesterday, the stock market had its worst day since 2020. And so did my portfolio. Thank you so much for asking. It has been rough. It's in response to Trump's Liberation Day tariffs, sweeping international tariffs that I'm going to dig into today. Trump says these tariffs will be good for American workers, that it will bring manufacturing back home, lower the trade deficit and generate revenue. But will it? The
Because when you start digging into what happens after big tariffs hit, you start seeing phrases like supply chain shock, inflation spike, and my personal favorite, global trade war. Tariffs can be a double-edged sword. They're meant to protect domestic industry, but they can also hike prices for consumers.
They can rattle markets, as we've seen. They can strain relationships with global trading partners, too. And while it's easy to say buy American, it's a lot harder to do when your grocery bill jumps and that iPhone you were planning to upgrade to suddenly costs 20% more. So today I'm going to ask the big question I think we all are thinking. Will these tariffs help the U.S. economy?
or hurt the U.S. economy. And to help me unpack all of this, I'm joined by my friend, investor, author, money rehab alum, James Altucher. James argues that these tariffs might not be the inflation bomb people are afraid of and that they could, in fact, create new leverage for the U.S. in future trade deals. I play devil's advocate, of course. And then James and I zoom out and talk about what these tariffs could mean for the stock market, for jobs, inflation, Bitcoin, and of course, the big one, a recession.
James Altucher, welcome back to Money Rehab.
Nicole, so happy to be here. This reminds me of those 5 a.m. moments when you were hosting that 5 a.m. show on CNBC. And you would wake up for it. I would wake up. So I'd wake up at like 3.30. I lived an hour away. I would get over there. And I loved every minute of it. It was always such a pleasure hanging out with you on TV. Who knows if the three people that were listening really paid attention. You were more than three people. But we had so much fun.
All of Europe was awake. All of Asia was awake. It was just the U.S. that was like getting up. That's true. Yeah. I should realize there's a global world out there. Big bad world out there. All of your adoring fans all over the world. Well, we're talking on Liberation Day. Woo. How was your Liberation Day? I, you know, I don't feel like it was any different than yesterday. Yeah.
Like, I don't feel liberated. Do you feel liberated? I mean, I feel scared. I actually, can we look at our portfolios for a second today? What is your portfolio down today? You know, I tell people like don't mourn paper losses, but I do still. Well, you know why? It's not necessarily the paper losses. It's the fear. Is this going to continue? Like, are we in trouble? And it's not like...
is this stock going to be okay? It's more like, am I going to be okay? Because every stock on the screen is down, right? The S&P is down 5%. I don't know the last time it's been down 5%. It feels bad. It feels like March 2020 or December 2008, like one of those periods where you feel like capitalism's going to be dead. Yeah. No, it feels very deja vu.
To me, I'm down like 4%. And I've wiped out more than half of my gains the last four years. Yeah. So it's very real and scary to people who are saving. And at the same time, their jobs are uncertain because of all the tariff stuff. And I'm saying all this because I think this is what people really care. They don't want to know, oh, what AI stock should I buy today? Nobody wants to know that. They just want to know
Am I going to be all right? Is my family going to be okay? And the reason I bring this all up is because I definitely think everybody's going to be okay.
But it just feels bad right now. It does feel bad right now. Not everything is in the red. I think my entire portfolio is basically in the red. But we do have like some Johnson & Johnson, some P&G, some boring consumer staples, defensive stocks that are still up. They were kind of dogs over the last few years. But now they're, of course, feeling some love. That's what people do. Yeah. Yeah.
It's hard. Your paper net worth, A, it's not your real net worth, and B, it's not your self-worth. And it's really important to remember that during the very few periods that are like this. So again, in the past 25 years, there was 9-11, there was 2008, there was March 2020, and there's now. Yeah, it's hard to not mourn paper losses, and it's hard not to rejoice paper gains. The two most important days...
that you're invested are the days you buy and the days you sell. And the rest of it is noise because, you know, just like your house, you can watch Zillow porn all day long and look at the value. But is somebody going to pay that? Yes, maybe. No, maybe not.
Right. And to your point, like I haven't looked at my portfolio at all until you just said, let's look at our portfolio. Okay, let's look at it. What is it? You didn't answer. Well, I don't really, I don't really, I only own stocks that I had invested in privately that are now, that then went public. So I'm significantly up on investments like this, but like one stock I own is 11% down today. So it doesn't feel good looking at it. But you know, a weird thing happened to me yesterday, which is I ordered off of Uber Eats
And the driver was dropping it off and I was outside. And she said to me, hey, can you give me advice on my career? Like, what should I do to have success? Because you live in a big fancy house. Why did she say that? Yeah, it looks nice. Let's just say that. And I said, without thinking about the markets, I said, the thing is,
And you know my story. Like, I've been broke many times. And then... How many times? At least four. Okay. Like, dead broke. I've had ups and downs. But, like, dead broke and then... Like, zero millions. Then dead broke again. And I said to her, which is the key thing I learned, is that...
The main skill is how quickly can you bounce back from adversity like you can't look backwards you have to always be looking for the opportunity even in bad moments even in moments like we're experiencing right now because there's always opportunities like the Economy is bigger than ever there is more money in this economy than ever and I'm not saying you can just tomorrow
turn your financial life around, but you could set yourself on a track and that alone feels good to make positive progress, to move forward. It took years for me to kind of stop wallowing in the badness and keep and start moving forward towards, you know, the goodness.
Yeah, I mean, no, I know you've had some bouts of depression during those troughs and coming back out of it is definitely really hard. I lost my house, as you know, earlier this year, which was a personal trough for myself. But what I realized through that is that the things that I thought were security, like
A house, you know, some people think a job, a certain amount in your portfolio, all of those things that I assumed would give me safety and security actually didn't. No, but... Lose your house in a second. Right. But like, just like a portfolio, even if your portfolio is down, even if the economy is down, even if there's so much uncertainty, there's so much uncertainty right now, but we know...
that everyone says that every time, oh, the world's over, capitalism's dead, but it always comes back. We never got closer than 2008. 2008, things were legitimately bad. Death in its eye, yes. We still bounce back so strong. I mean, there was like an 11-year bull market that lasted until the pandemic. And even that year of the pandemic, the market was up. So it lasted until essentially 2022. Yeah.
Yeah, the only certainty is uncertainty. I think the thing people want to know right now, just like bottom line, are tariffs good or bad? Yeah, so let's talk about it. First off, let's set the historical stage, like what historically has happened and when have tariffs been bad? Because there has been a period when they've been bad. So first off, for the entire first half of the United States, from the founding of the
97% of the United States revenues came from tariffs. We didn't have any federal taxes. So all the revenues came
came from tariffs. And during that time, you know, we had the Industrial Revolution, like the U.S. went from being a small country to the basically just about the biggest economy in the world next to the U.K. And then around World War I, which is right after, we surpassed the U.K. And I know this is a very different period than now. Nobody has to correct me on that. Obviously, it's very different. But historically, tariffs was the main
source of revenues, at least for early America. And there was zero inflation then. So tariffs are not really connected to inflation, despite what people are saying. And we can get to why in a second. But then federal income taxes started. It was a constitutional amendment. I think it was the 16th Amendment. And Woodrow Wilson was the first president to introduce income taxes. And then slowly the U.S. started shifting their revenues. Now almost all the revenues come from income taxes and very little comes from
But in 1929, which is a familiar day to people, is the beginning of the Great Depression. There was a tariff act passed, the Smoot-Hawley tariff, which put a huge, like a 60% tariff
on everything, like everything imported. So Herbert Hoover, the president, he just did not want any foreign country to interfere with American industry. So he was completely a protectionist and isolationist. He didn't want trade. He only wanted us selling to other countries. He didn't want anybody buying from other countries. So he put this huge tariff on everyone else, on every other country. And then every industry collapsed because there were no buyers and all the other countries put big tariffs on the U.S.,
And there was a Great Depression. Right. But you argue that Trump's tariffs are more strategic in comparison, right? Yeah. So as first off, let's look at 2018. Trump was president before, as we all know, and he put pretty big tariffs on Chinese products in 2018, Mexico, Canada, Europe. He put a bunch of people. He put a lot of tariffs on many, many products and pretty big tariffs as well.
in some cases bigger than the tariffs he's putting on now. And what was the result? Well, inflation was around 1.7%. So it was inflation was almost deflation. I talked to a Federal Reserve governor around that time who told me that what worried them at night was not inflation, but deflation because they were trying really hard to create inflation.
And there was none. So the tariffs... Yeah, you came on the show, I think, around that time, which sounds adorable in hindsight because inflation would later go to 8%. Yeah, so what happened was is that 40% of all the money created since the beginning of the planet...
was printed by the United States in around early 2021 to do all these bailouts in 2020. Between 2020 and 2021, 40% of all the money created in history was printed by the U.S. this one year, you know, for the pandemic bailouts. The year after, like 2022, is 9% inflation.
So money printing, just printing free money devalues the money. And that's when there's inflation. So you look at Germany in the 1920s, they had to pay all these war reparations. So they came up with this really brilliant idea. Well, here's one way to make money. Let's just print it and we'll give that to the Americans in the UK and so on. So they printed all this money. Everyone realized, oh, my marks don't have any value anymore because there's so much of them. And so then there was hyperinflation.
So that's what happens when you print money. Totally. But they're not like printing money for funsies. Right. So riddle me this. Printing money is a downstream effect of a ton of other macroeconomic factors, whether it's war or layoffs or unemployment. You know, people start borrowing money. Interest rates go down. Inflation goes up. Isn't that a possibility? No. No.
Because if there's a fixed supply of money, let's say you're not printing any money. Let's say all you have is $1,000. And let's say you buy food, oil, gas, a place to live, and books to read. I'm just making this up. And let's say...
you know gas the price of gas goes up well now you're gonna have to make a decision maybe you move out of your apartment and get a cheaper apartment because you're gonna need gas to go to work so you just have a thousand dollars you have a fixed amount of money so some prices go up like gas goes up let's say there's a gas shortage for whatever reason so some things go up but then you have to take away money from other things so the price of other things go down that's what happens
with calves if there's fixed money. You could borrow money, but there's only so much you could borrow. Then you have to pay the money back. But...
printing money creates new money. And what they did was they printed money and they just gave it to people, which I'm not saying that was good or bad. Like people were struggling in the pandemic, but they just gave that to people. And some people really needed it. But for some people it was just extra money. So these people just bought more things. And so then the prices of everything go up. It was just like, if suddenly everybody has like double the amount of money, then prices will double.
So that's exactly what happened. Like suddenly there was just all this extra free money for many people and they started buying more things. They're willing to pay more money for things. People recognize this. So suppliers charged more. That's almost if you look at almost every time there's like periods of inflation, not just in the US, but in any country, it's when money, just free money happens to be around.
Well, I mean, maybe that happens in a vacuum, but the federal government is not just printing money for their health. I mean, in economic times when people are upset and they're crying recession, like now, maybe they're printing money. It's not just because they can. I mean, listen, if I could print money, I totally would. But I think we should step back because I think we need to really just discuss what Trump actually did this week. Hold on to your wallets. Money Rehab will be right back.
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And now for some more money rehab.
I think we need to really just discuss what Trump actually did
This week, the highlights are, I'll just read these, 10% baseline tariffs across most countries, new reciprocal tariffs, notably an additional 34% on Chinese goods, 20% on the EU, 32% on Taiwan. A lot of economists are trying to predict whether these are going to be good or bad or what. It reminds me of my favorite parable that I will get to. So a lot of economists are worried that this is going to end you a lot of progress that has been curbing inflation. You have another take.
I know Stanford and Harvard and all the fancy school professors are yelling at you on Twitter. I refuse to say X, by the way, but they're yelling at you because of your take on this. Yeah. So that's why I just wanted to take inflation off the table, because historically,
Tariffs don't cause inflation. We have the example of 2018, 2019, early 2020. We have the example of the entire 1800s. We have the example of Smoot-Hawley, where there was deflation instead of inflation. The worse the tariffs are, the more deflation there is, because industries go bad. And that's why we're worried about a recession.
I don't think anybody really is worried about hyperinflation right now. It's not like we have so much money, we got to take a wheelbarrow of dollars to buy a loaf of bread. We're really worried about a recession, which is kind of corresponds with deflation rather than inflation. So inflation is just off the table, which is why I bring up that example. It never occurs because of tariffs. It didn't occur in 2018, didn't occur in 1929, didn't occur in the 1800s. Some prices do go up, but that means other prices go down. So that's that. But...
The problem is, could industry go bad if prices on steel go up because of 25% steel tariff on China? Will people stop building things because it's too expensive to build things? And will the housing industry collapse and people lose their jobs? And then we have a recession and it's like a death spiral down. So it's not that I'm worried price will go up. The real worry is, will there be a big recession? And even there,
The answer is a solid no. Like everybody's worried, will there be another depression like what happened when the Smoot-Hawley tariff happened in 1929? And the main difference is the Smoot-Hawley tariff was a blanket tariff on everything, just like that 10% tariff Trump is doing now. That's a blanket tariff, not the reciprocal ones, but the blanket 10% tariff that he announced.
But Smoot-Hawley was almost a 60% tariff, or let's say 50% tariff on everything that was being imported. So 50%, if you put a 50% tariff, you're basically saying, we don't want to trade with you ever again. If you put a 10% tariff, you're saying, please trade with us as much as possible so we make that 10%. And you're also saying with these reciprocal tariffs, hey, you tariff us, we tariff you,
Let's call the whole thing off. Like, let's just meet at the negotiating table and negotiate, which is what he's been doing with Canada, with Mexico, with China. Look, Apple today just announced they're going to spend $500 billion in
in the US to build factories here so they can make products here. So $500 billion is a lot of money. And Intel and Taiwan Semiconductor, they just announced they're going to spend $200 billion building tech facilities here to avoid
So we're already in one day. We're already seeing the results. Like $700 billion just announced in 24 hours is a huge impact on the economy. It's a lot of billions of dollars, for sure. I mean, I thought it was a negotiating tactic, too, and I'm still waiting for...
it to manifest that way for Trump to say, psych, just kidding, we're good. But think about like a negotiation. Think about a negotiation with your job. Like let's say someone's at a job and they tell, and they want to negotiate a higher salary. And let's say they're really truly willing to leave. They say to their boss,
I'm leaving. See you later. And the boss says, wait, wait, wait, let me make a counteroffer. And the right response is, well, I'm leaving. See you later. And you walk out the door. You've got to really show people respect.
that you're serious in a negotiation or else they take advantage. And I'm not talking about Trump, I'm just talking about every negotiation in the world. If you show you're scared and you're not afraid to do what you say you're gonna do, you're gonna lose the negotiation. So this is my theory of what Trump's doing. He said, let's just do this first. And yeah, there's gonna be a lot of people afraid, including the leaders of foreign countries and the CEOs of major companies and the stock market, unfortunately.
And then I'm just going to be silent for a while and see what happens. So we already see like hundreds of billions of dollars worth of announcements. Canada and Mexico clearly are negotiating with us. By the way, in 2018,
With Mexico, we put all these tariffs on. Then by 2019, all the tariffs were dropped. Mexico dropped all their tariffs against us. I know, but they're like our homies. Yeah. Mexico and Canada. China in 2020 agreed to spend $200 billion on purchasing stuff in the U.S. They agreed to start prosecuting theft of intellectual property, which was a big problem between China and the U.S. So with every country, we have strategic interests.
and financial issues. And Trump is just laying it all out and putting it on the negotiating table. And his argument is, oh, I just want fair trade. But he wants other things, too. He wants some strategic objectives. By the way, I'm not saying he's going to achieve those. We're just kind of getting into his mind right now. And like rather than rather than saying, oh, he's trying to destroy the country. This is what he's trying to do. And then we have to decide whether he's going to say what he's trying to do. There are three main things that he's trying to do.
Right. To move more manufacturing back to the United States, which benefits the middle class American industry in theory, to make trade more fair by lowering trade deficits and to create more revenue.
If you say inflation is not going to happen, what do you think is going to happen? Then there's a fourth thing, which is also to negotiate other strategic initiatives. Like maybe... Like a bargaining chip. Yeah. So like with China, stop sending fentanyl into the U.S. Then we'll lower tariffs. With Canada... Isn't Canada the one sending fentanyl?
Well, China, they're getting it from China and Mexico is getting it from China. And this is from all the law enforcement agencies. Then cartels that operate out of these two places on the border, they're sending it into the U.S. But it's all originating in China.
So that's why it's a negotiating stance for Trump. Okay, so four of them. So do you think tariffs are going to accomplish any of those? Well, I think with the strategic stuff, I think it's already happening. We've already seen negotiations with Canada, Mexico, and even China, and also these companies that are... Well, okay, let's talk about moving manufacturing in the U.S. I don't know how it's going to go in general, but we just see evidence that...
um a apple again the 500 billion dollar investment then intel and taiwan semiconductor and then you look at 2018 roughly there was they estimate about 30 000 new auto worker jobs were created in the u.s because of tariffs on cars on china or on asia in general and so there's evidence that that does bring now do we want manufacturing here i don't know but there's evidence that it does bring manufacturing here and so
Now, does it generate revenues? I actually don't think the tariffs are going to generate much in revenues. I think people will stop buying products that are too expensive. So then there's no tariffs. If you don't buy the foreign product, there's not going to be a tariff here. So I don't think it's going to generate much in revenues. Maybe the 10% blanket tariff. So let's say we have
$3.5 trillion worth of foreign imports. So a 10% blanket tariff would normally generate $350 billion annually. Maybe it'll, because fewer people will be buying foreign goods, maybe it'll go down to $250 billion in revenues annually, which is not bad, but it's not amazing. I mean, personal income taxes generates $2.5 trillion in revenues for the U.S. So this blanket tariff will only alleviate 10% of that. Yeah.
Yeah, I mean, if we're calling off reciprocal tariffs, then it's more of a short term trade war strategy than actually a long term play to move manufacturing to the United States. Because if we did that, there's a lot of other stuff that would need to go right. There would...
So a lot is happening in the economy right now, and a lot would need to go right for that goal to be accomplished.
I agree. So other things that happened, and again, we can look at 2018. Other things that happened is manufacturing spread out a little bit more. So instead of it all being in China, we went to Vietnam. We went to India. We went to places where we weren't putting on as high of a tariff. Or we worked out deals to make the tariffs and duties lower. The other thing is, by the way, where are the workers? Because in the U.S., we're essentially deporting a lot of the workers. So...
what's going to happen is robotics companies are really starting to amp up their investment. And, you know, you have things like the Optimus robot being built at Tesla. I don't know when that's going to be ready for prime time, let's say 2026, 2027, but that's going to be the new factory worker. I mean, already Tesla's automating a lot of their energy products, so they could build an electric grid almost automatically with robots. So we're
We're going to see some transition in technology that's going to replace the workers also. Doesn't mean the workers are going to be out of jobs. They just won't be at those jobs. But maybe getting higher minimum wage. I mean, the chatter is that a higher minimum wage might offset some of the economic fallout of the adjustments to higher tariffs.
I mean, I hate to sound like overly conservative, but let's say you're a manufacturing company and you're like, oh my gosh, steel prices just went up. So it's going to be, it's going to cost us more to build cars or whatever. Oh my God. Now the minimum wage, now it's going to cost us more to have labor. So they're going to, what's going to happen is they're going to just switch to robots eventually. And, and,
They'll raise the price on their cars or they'll insource steel as much as they can because steel does come from the U.S. Also, those have to like make more of it. So, you know, what happens typically is you start looking for alternatives to the things that are going up in cost, which is why overall inflation never occurs when there's tariffs. So take any basket of goods. If some of the goods go up, other goods are going to go down. Again, overall inflation only happens when you're printing up just a lot of excess money.
To your earlier point, I mean, I don't know if people necessarily care where inflation is coming from. They just care, like, are they going to pay more for that?
you know proverbial basket that we talk about when we talk about inflation but what people what a home does is they look for alternatives so they don't shop at i don't know whole foods they shop at costco or walmart or whatever and you know i bet you didn't know like on on you could go to any site that sells gift cards on the planet and you could buy infinite amount of uber gift cards
to do Uber rides for 75 cents on the dollar. You can get 25% all your Uber rides just by buying gift cards. Nobody does it though, but that's an alternative to whatever people are doing now, which is just straight riding Uber. So when people look, there's always alternatives to find cheaper goods or goods that are trying to be more competitive because they're made domestically, so they're cutting prices to compete.
when they couldn't compete before with the Chinese products or whatever. So yes, it's true. People don't care where the inflation comes from, but there's not going to be individual products might rise in prices, but you can't have overall inflation because where there's no money for that, if there's not extra money in the economy. So there's only... But what if there is extra money because of it? Yeah, so if money is printed, if money is printed, then there will be inflation. But that's not necessarily a bad thing either. We've had...
30,000 or whatever percent inflation since 1903, right? So three cents in 1903 could buy what a dollar could buy now, more or less. But our quality of life has gone up amazingly. Inflation is not necessarily a bad thing. It's what basically fueled all the innovation and discovery in the United States because there was excess money floating around that went into inventing new things for our money-hungry consumers to buy. I mean, I don't know, James, when you talk about
going to buy gift cards to buy food and stuff like that, that screams like recessionary vibes. Are you net net saying that we're past the point of no return for a recession? No, I'm not. I'm not saying that. I'm saying even in a right now, for instance, you could buy Amazon gift cards and buy all your groceries through Amazon at 80 cents on the dollar. So this is just what I'm saying is there's an alternative. People will start being creative and think of alternatives to way they're spending now.
It doesn't matter if you're rich, not rich, poor, middle class, whatever. You might not buy a car that just went up from $80,000 to $100,000. You might say, look, I'm fine with the car that's $70,000. And so people will just start looking for alternatives, particularly if you're not making more money. Now, if money is printed, which it could be, people will have more money in general and there will be
inflation in the economy and whether that's a good thing or a bad thing will have to be determined in the future. But that is one way to avoid a recession. That's why they printed money in the pandemic to avoid a depression. So, and it worked. I mean, there was inflation, but we avoided a depression.
Okay, this reminds me of my favorite parable. We're going to have story time for a second. You probably know this. Let me know if you do. It's about a Chinese farmer who lived in the mountains and spent all his days with his son and his horse farming his fields to make a living. Okay? Okay.
Do you know this one? Yes. Oh, you do? Yes. It's a great story. Okay. Our producer Morgan hadn't heard it yet. Maybe some of our listeners haven't either. But it reminded me when you were talking about whether or not this is good or bad. We don't know. Time will tell. In this parable, a farmer's horse ran away and everyone in the town said to him, you must be devastated. You lost your horse and now you cannot plow your fields. The farmer replied very casually. Maybe yes, maybe no.
The next day, not only did the horse return, he brought two stallions with him. The people in the town rushed to the farmer and said, that's great. You must be so happy. You now have three horses and you have just become one of the richest farmers in the land. The farmer replied casually again, maybe yes, maybe no.
Soon after the farmer's son was trained, the stallions and one of the new horses reared up and landed on the boy's leg, breaking it. Now the townspeople came to the farmer and said, you must be so devastated. Your boy broke his leg and now he cannot help with the chores. The farmer once again responded, maybe yes, maybe no. It's almost over. Days later, war broke out and the sons of all the farmers were sent to fight.
All except the boy who broke his leg. The townspeople said to the farmer, you must be so happy your son does not have to go to war. And the farmer replied, maybe yes, maybe no. And the story continues. Time will tell, right? Maybe yes, this will be a good thing. Maybe no, we don't have all the information. I'll say what is bad, though.
If tariffs are too big, we get into the Smoot-Hawley Great Depression era. If money printing is too big, we get into hyperinflation. So mild inflation is good.
Tariffs are good. They'll generate revenues for all the reasons you mentioned. They'll generate revenues. They'll generate strategic possibilities for the administration. They'll move some businesses onshore. So there's good. There's some prices of products will raise, but some products of prices will go down. But too much is too much. Then you have the Great Depression. So people are trying to determine, are these tariffs too much? And my... Maybe yes, maybe no. Well, I'll say the one difference is...
The tariffs that started the Great Depression were 50 to 60%. Here we're talking about a 10% blanket tariff. All the other tariffs are reciprocal tariffs that could be negotiated. So countries will bring their tariffs down and we'll bring our tariffs down as a result, or there'll be some other negotiation.
or we'll switch to other products or we'll insure or whatever. So, and similarly with avoiding a recession, yes, we'll print money that will lead to inflation, but inflation, we've had inflation for the past hundred years and we've flourished. So it's not necessarily a bad thing. It's only bad if it's hyperinflation, if it's too much. So people could get worried about that, but it hasn't happened yet in the U.S.,
So overall, everything's going to be fine. It's just we might see a lot of this short term uncertainty because we just don't know where these tariffs too big. I don't think they were. But, you know, a lot of people are worried about that. The stock market is clearly worried about it. The stock market goes down too much. There's a recession. But then they'll print money to kind of counterbalance that. That's where you kind of go back and forth like, oh, there's a recession.
Oh, but then there's going to be money printed and there won't be a recession. But here's another thing to keep track of.
AI is a new industry that is a weird kind of new industry. It's an industry that is powering, it's like accelerating every other industry. So it's not an industry by itself. It is sort of the fuel. It's like a super energy fuel that powers innovation in every other industry. So forget about the government, forget about the economy, forget about geopolitical stuff. AI by itself
is powering enormous possibilities in every other industry you could think of in ways that are unimaginable. It's like the future is coming to our doorstep faster than we thought it would. And that's going to power this economy more than any of this discussion about yesterday's or today's tariffs and, you know, today's regulations and so on.
I mean, that reminds me of like 20 years ago when I was reporting on the breaking news that Apple launched its first iPod or that Google was announcing Gmail, which I legit have videos of baby Nicole reporting on this. You know, when technology was a new sector or whatever, and then every company became a technology company. So it reminds me of that, the way you're talking about AI. Yeah, like think of like...
you're a farmer and you think, well, what does AI have to do with me? Well, John Deere is like full, you know, they make the tractors. John Deere is full force an AI company. The tractors are going to have, you know, full self-driving for instance. So now the farmer can work on other opportunities rather than riding the tractor around. The tractor is going to have an ability to recognize where the weeds are so it's
it'll only spread pesticide there using AI and save across the industry tens of millions of dollars on pesticides.
So these are just two things in one industry that I could think of, but every industry is going to leap forward far faster than we thought. By the way, medical being number one among that, like what's happening in medical AI is like unbelievable, but that's more interesting from an economics and stock point of view than these tariffs. Tariffs, in the long run, we're going to see nothing much is going to happen, just like in 2018.
So inflation, there's going to be a little bit of inflation if they print money, else there's going to be deflation and a recession probably. And inflation is going to be OK. It's not going to be as much as before because we're not going to print up 40 percent of all the money in history. And.
We'll survive. But then when we look around, well, what stock should I buy? We're going to look at like the stocks using AI to generate enormous profits. And that's going to happen regardless of the economy. Well, thank you for another farmer story. You know, I love farmer stories. We should, this should be a podcast about farmers. Two Jews talking about farmers.
Listen, we're old enough to know. Like, we're old enough at this point to have a lot of perspective. You know, 20 years ago or whatever, or 2008, I was freaking out. You were freaking out. We've kind of seen this happen before. I was freaking out and I went broke. But you're back, baby. There's all these times I've gone broke that nobody knew. Like, that was important to me, to never let anybody know. But I was going through it.
When I was on your show in 2000 or whatever it was in 2008 or 2007, it was hard. But so was everyone, to be fair. Yeah. At that point, everybody was was feeling it. So we did story time. We did tariff time. Let's do a little game time. This is a variety show. You want to play bullish or bearish? Yeah. Yeah.
Let's do it. You know, I have to tell you one time I go on CNBC and it was in 2008 or 2009. And I was optimistic and bullish because like Warren Buffett just bought five billion dollars worth of Goldman Sachs that day. And, you know, it was clear the U.S. government was going to bail out all the banks, which you could argue whether that was good or not. But
Why wouldn't I be bullish then if all the banks were gonna survive and Warren Buffett was investing so I'm dry I'm being driven home like in a cab and my mom calls me and she says maybe when it's so bad out there you shouldn't be smiling all the time on TV and I said my mom this is the exact time that one should be smiling is that this is where the opportunities are created and
That's such an important point. It is where opportunities can be created if you go after them. And some of the greatest fortunes have been made when there was a recession or depression, and we've never not recovered from a single one in U.S. history. I know people are like, but this one is going to be the one. But it's not. 2008 was so bad. And look, 9-11 was so bad. Yeah.
That was scary. Yes, of course. And it was, you know, there are black swan events like that. We just don't know. And who thought they shut down the global economy for like six months? How did the world survive? How did the world economy survive? I don't know. We're in a situation. We don't know. You're procrastinating from our game. Hold on to your wallets. Money Rehab will be right back. And now for some more Money Rehab.
Okay, bullish or bearish? S&P 500? Bullish. Tesla. By the way, I'm very sorry that someone keyed your wife's Cybertruck. Yes, we were surprised. This wasn't like a thing at that moment. It was like a month or so ago.
My husband also drives a Tesla and my car burned in the fire, but we were driving in his Tesla and like some motorcycle guy, I remember a few weeks ago, came up beside us and just kind of like slowed down, yelled at us, licked us off. And I was like, baby, did you do anything? Like, were you defensive driving? What was going on? And he was on like the auto driving mode.
And then we just thought, yeah, that's because you're driving a Tesla. There's no other reason that guy did that. You were driving an environmentally friendly car in California. Here we are. But no, there's so many bumper stickers, right? People saying, you know, I got this before Elon went cuckoo bananas.
But Tesla, are you bullish or bearish? If we're doubling down on AI and robots and all that stuff, the Tesla robots are just starting. I had been bearish for a long time.
Because I felt like, okay, the cars are good, but it's one car company among many. But the more I look into it, and particularly now, I'm bullish. Because within two years, it's not going to be a car company. It's really an AI energy products company. They're going to build electric grids. They're going to power entire societies. They're going to have the Optimus robots. There's 67 million blue-collar workers in the...
utility and electric and energy space. And these optimist robots could end up being a big chunk of that workforce. And meanwhile, the car sales are going down, but every other part of Tesla, like these energy products are like doubling every year. So I think within two years, the car revenues are not going to be as much as other revenues at Tesla. So I'm very bullish.
That's what I think, too. We're talking to someone who's, I know, your favorite technical analyst who, you know, showing all these charts of Tesla and where the peak and the troughs and the moving averages and all that stuff are. And they're like, get the fuck out of Tesla. But I feel bullish on it, too. That chartist might be looking at just like today or tomorrow. I don't know. But long term, is Tesla really not going to hit all time highs again when it's selling millions of robots a year? Right. Bitcoin. I'm very bullish.
How much Bitcoin do you have? It's more like I'm invested in a lot of Bitcoin companies. So crypto companies. And I'm actually more bullish on things like Ethereum, Solana and other cryptos. So let's just say the crypto sector, I'm very bullish on. But that means I'm bullish on Bitcoin. Okay. The dollar, bullish or bearish?
Maybe bearish because we are going to print money and value is a function of supply and demand. So if the supply of dollars goes up, the value goes down, particularly relative to something where the supply doesn't change like Bitcoin. How about gold? I am always bearish on gold. I hate gold. What?
Gold is like a rock. Like, okay. I mean, yes, but... It's a yellow rock. Like it has no actual value. Totally, but Bitcoin is not even a rock. No, no, Bitcoin has a million man hours of code in it. Like Bitcoin has a lot of functionality.
There is functionality to gold, but it's the same as silver. So silver is an antibacterial metal, which is why we have silverware and why our fillings, our cavities are filled with silver. I hope that you got rid of those. But you also have like collodial silver where you spritz in your mouth and if you're sick and it helps allegedly. You could do the same with gold, by the way, but gold's 60 times more expensive. Yeah.
So gold is just useless. And let's say you have all your wealth in gold. But it's the value that somebody attributes to it. It's the value that somebody attributes to it. It's not the actual rock itself. Right.
Right. So it's like a story. We tell ourselves that gold is a precious metal and it has value and it's a limited resource, which we don't really know. We don't know how much gold is in the earth. It's not a limited resource. It could be unlimited or mostly unlimited. And if you really, let's say your wealth is stored in gold, what are you going to do? Like if there's riots and your city is invaded, are you going to just put all your gold like in a truck and
no drive away with it no like gld like an etf right but then you need collecting you know but then you need like broaches from your grandma right but then you need like dollars like gold can't buy gld you have to abuse dollars to buy gld gold can't be used to buy anything actually there is no world in which gold can buy something no country allows you to buy something with gold
Right. But it can hold your value while other stuff is going in the pooper. Right. But that's just a story. People could. We love stories. The whole this whole spiel is about a story. All of this stuff is stories we tell ourselves. Well, no, because with the dollar, it has value because you actually need dollars to pay taxes. So you need to amass dollars to pay taxes. And with gold, though, you don't really need for anything. And crypto, there are
every possible crypto token has a functional use. So if you're truly rebuilding, let's say the banking system or other projects that crypto is involved in, you need crypto for it. But what do you really need gold for? Other than, like you say, as a store of value, but that could change. Okay. How about banks? Banks are getting a beating right now. JP Morgan, Goldman Sachs.
I'm kind of bearish on banks. Bank of America. I think banks are basically kind of scams. And I think this is where crypto sort of solves the bank issue. But I do have to say that the banking system is probably here to stay. Yeah, James, you can't say it's a scam. Yeah. Well, I mean, banks are constantly getting fined for illegal activities, but...
Their banks are here to stay. You have the whole cabinet is like pro-bank. And that's why the U.S. government's been traditionally anti-cryptos, because they didn't want to offend the banks, because crypto and banks are sort of opposite each other. But I think they'll be just like the phone company and the Internet, where they were opposite each other in the 90s. But then they sort of merged intentions. And I think that's what will happen with the banking system. Yeah, I feel like there is an access or an invisible string between Goldman and the Treasury Department.
I think that's true. Look how many Treasury Secretaries worked at Goldman, like Hank Paulson. Totally. I don't know. There's a whole bunch. Geithner, right? Yeah, Geithner. Yeah. Okay. Walmart. Bullish. Yeah, definitely bullish. Even with all the... Oh, my God.
Oh, particularly with tariffs. Because one skill, why did Walmart succeed when almost every mega grocery store failed is Walmart was particularly good at switching its supply chain very fast on the hundreds of thousands of products it sells. So what happens with...
high big tariffs, you need to immediately switch your supply chains. So you're getting products from places with lower tariffs. So Walmart is particularly good at this. So the tariffs actually make me super bullish on Walmart. What about Costco? They have less SKUs and aren't great at that type of pivot.
Yeah, but Costco's got the membership aspect. So it's got a big moat, which is why Charlie Munger, you know, Warren Buffett's former number two guy, he's passed away. But Costco also on Bullish on is very smart company. By the way, you could buy gold bars at Costco, sometimes at a discount to the regular gold price. That's the only time I would buy gold. You can also get glasses there in your old age like me. You could get so many things at Costco. I do own some Costco. Okay, how about NVIDIA? NVIDIA, 100%.
I'm mostly bullish, but here's the thing. Eventually, you're not going to need 100,000 NVIDIA chips to make the best AI, just like you don't need any more to upgrade your phone every year. We used to upgrade our phones every year. Now, we don't really have to. I mean, I just bought an iPhone 16, but my last iPhone was the iPhone 12 because it was good enough. And eventually...
Nvidia chips will be just good enough, but it's growing so fast now. I would, I'm still bullish on Nvidia, but not for the super long run.
But for all the AI that you're talking about, you're going to need compute. Yeah, but A, there's going to be lots of chips that are going to be good enough. Just like the phone is good enough for me to talk on now and use apps and watch videos and so on. There's going to be other chips out there. And companies won't need a million NVIDIA chips to make the best AI. Maybe they'll need a thousand chips and eventually just one chip. So chip companies eventually...
fall prey to there won't be an upgrade cycle. Yeah, but you're going to need energy. So what about nuclear? Yeah, nuclear I'm very bullish on. Long term? I mean, it's taken a beat down as well. Long term and for energy, obviously.
So I'm very bullish on it. Because look, a lot of Europe is powered by nuclear. Hardly, I don't think, I don't know of any part of the US powered by nuclear. I mean, there's probably some parts, but eventually we're going to have to switch to something like nuclear. And Microsoft is paying to open up Three Mile Island, like the only place in the US where there was a nuclear disaster. That's how much the demand for nuclear is starting to come right now because of AI. I mean, yeah, because nobody also wants it in their backyard. So are there specific ones that you like? Like...
SMR. OKLO, the Sam Altman one, Constellation. What was the one you said? SMR, they make these small modular reactors. So like smaller nuclear reactors. Yeah, because there's fusion and fission. Whatever, we can have a whole other episode about this. Let's argue about physics on this podcast. We'll go into quantum physics after that. All right, let's round it out. How about Amazon? Maybe the new parent?
Oh, really? I have not heard that rumor. Breaking news. Well, then I'm very bullish on it. Like last minute bid. I think the deadline is this weekend. Honestly, I love TikTok. Wait, I haven't followed you on TikTok. Are you dancing on there? You would be great. No, I'm not dancing on there. I don't think. I think I took that one down. I think you could have like a hair TikTok.
I have so many questions about your hair. I had at least one TikTok video with a million views, but I just use it mostly for viewing because this Gen Z generation, it's like they're superheroes. You see people doing like triple backflips out of an airplane and somehow staying alive. Four.
Four-year-olds playing Beethoven's Fifth Symphony on the piano and clarinet at the same time. It's amazing. Is it real or is it AI? We don't know. I don't know. A lot of it looks real and they're like superheroes. I'm so impressed with the current generation that's coming up. This is going to be a great generation. I can't wait to see what they do. Hell yeah.
All right, James, we end all of our episodes, as you know, by asking our guests for a tip that listeners can take straight to the bank. I'm an elder millennial. Wait, what are you, Jen? I'm Gen X. Yeah. Yeah, you are. Okay. So from a Gen Xer, what would you tell the kids these days? One thing. Don't be angry. Don't ever be angry.
That's the one thing. Angry at the market, angry at life, angry enough to, you know, angry at others. Cybertruck. It always takes away energy. It never gives you any energy. And you need energy to live in this life. And it's a hard life. So just don't be angry. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes.
Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.