Jim Rickards: Heres What You Need To Know From Bidens State of the Union
Summary
➡ This article talks about how wealthy people, like hedge fund managers, avoid paying taxes by using deferred compensation plans, similar to a 401k, but with much larger amounts of money. They can then move to places like Puerto Rico to pay lower taxes when they retire. The author criticizes President Biden’s tax plans, saying that wealthy people will always find ways to avoid paying high taxes. The author also discusses inflation, blaming it on Biden’s fiscal policies rather than monetary policies, and criticizes the spending on green initiatives, arguing that CO2 emissions are not the cause of climate change.
➡ The Supreme Court ruled unanimously that a state cannot remove a candidate from the presidential ballot, reinforcing the separation of powers in the U.S. constitution. The president made false claims about the Red Sea being open, when in reality, major oil tankers are rerouting due to attacks. He also incorrectly pronounced the name of a murder victim and used the term “illegal alien,” which is not preferred by progressives. Despite these issues, he continues to receive positive reviews from liberal media outlets.
➡ The article discusses the potential outcomes of an election, suggesting that Trump could win due to various factors. These include the influence of third-party candidates, shifts in support from black and Hispanic voters, and dissatisfaction among Arab Americans with Biden’s policies. The author doesn’t believe recent events will change these trends. Despite the popular vote possibly being close, they predict a potential landslide victory for Trump in the electoral college.
Transcript
We’ll talk about some of that. But had this long list of things. My view is our readers are very tuned in. They have their own views on, and we’re not politicians, we’re analysts. So if you want an open border, vote for Biden. If you want to build a wall, vote for Trump. If you want higher taxes, vote for Biden. If you want lower taxes, vote for Trump. We can leave that to readers.
Everyone can make up their own mind, decide what they want to do on that. So I want to really deal at a higher level about demeanor, the intent of the speech, whether it succeeded or failed in its political intent, and then a little bit on some of the policy issues because they make a difference. The first couple of things that struck me, number one, he was very vulgar.
He kept saying, what the hell? Or you kept using the word hell, which is not blasphemous, at least in the catholic church, but it’s certainly profane in a lot of churches, and absolutely vulgar by every definition. If you’re having a couple of beers with some friends and you want, know, spice up the conversation a little, that’s, that’s fine. But instead of the union address, I think to use that particular choice of words, I would put in the vulgar category.
But Biden is basically a small time cook from Claremont, Delaware. I mean, I grew up in Cape May. I graduated from high school there, lived there many times. My family still lives there. I have relatives in Delaware. I know the place very well. It’s mostly chemical plants, refineries and chicken. You know, Wilmington turned into a little bit of a regional financial center thanks to Biden, but he’s kind of a small time guy and acted that way.
So I kind of made a note of that reading the headlines this morning, and I watched the speech. I’ll give you my own views. But the headlines, at least in the liberal press, New York Times and Washington Post economists and some others, they said Biden was fiery, feisty, energetic. He was trying to refute the notion that he’s old, senile, feeble, and not steady on his feet, basically, physically and mentally somewhat incapacitated.
That’s the image you get just from watching him. But it was an opportunity for him to have a big platform and rebut all those images. So he came out very loud, very direct, talking very quickly. And that was interpreted by the New York Times as a fiery speech. No, he was drugged up. I don’t know whether, I’m not a doctor, just to be clear, but whether it was bifetamine or methamphetamine or what kind of speed they were using, the thing with drugs, the kind of drugs that they inject them with before these speeches, they don’t take you from being lethargic to normal.
They take you from being lethargic to being hyperbolic, like at the other end of the spectrum, temporarily. You crash the next day. I’m sure there’s nothing on his calendar today, but that’s what he was. And you can fake it for a couple of hours, there’s no question about it. With the right combination of drugs, I’m very attuned to body language. His left eye was closed during most of it.
Like, why one eye, not the other? He had some abrasions on his chin. The makeup was really heavy on one side of his face. I don’t know what was up with that. I have a super high deftv, so I guess I noticed all this. So, no, I wouldn’t describe it as energetic and forceful. I would describe it as angry, screaming. And the kind of demeanor you get from somebody who’s been pumped up for drugs for the occasion, I think there’s very little doubt about that, because when we see Biden in all these other settings, he can barely talk.
I would say vulgar and hyped up would be pretty good descriptions. It wasn’t really a state of the Union address. It was a campaign speech. Okay? It’s an election year. He’s trying to win. We have a view. And a lot of other people said the same thing, that he might be replaced not before the end of the primary season. But you can’t wait till the convention. The convention is August 19.
The primary season is over at the beginning of June. So sometime in mid to late June, just for an estimate that he might be pushed aside and replaced with another candidate. I don’t want to spend time on that view right now because there’s time for that. But Biden didn’t act like anyone other than somebody who’s running for president. As far as he’s concerned, the campaign is on. It’s Biden versus Trump.
He started this speech, by the way, on this demeanor issue. He got up to the podium. I’ve seen a lot of state of the union addresses. There’s a whole protocol before you actually get into the speech. And one of them is the sergeant at arms, who know, kind of a floor director, if you want to call it that, security officer of the House of Representatives. There’s the initial applause.
When he walks in, he’s shaking hands, lots of applause. Gets to the podium. The sergeant R says, ladies and gentlemen, honored guests, et cetera. The president of the United States say there’s an introduction, then there’s like another five minutes of applause. Biden just jumped into the speech. He skipped that part. And you say, well, who cares? It’s protocol. Is it really important? Well, what’s important is that Biden didn’t have the presence of mind to know that that’s how you do it.
And they’ve done it that way for decades. And I’m sure they explained it to him and rehearsed it. But again, he was pumped up, had the teleprompters going, and he couldn’t wait for that introduction. But things like that are meaningful because, as I say, it means that you’re not kind of aware of your surroundings. You’re staring at the teleprompter, but you don’t really have the presence of mind to get through all that.
So in terms of. I did say I wasn’t going to focus that much on policy, but some of them you just can’t ignore. So he talked about a 25% personal income tax on billionaires. He said they pay 18%. And if you look at the tax table, the top rate is about 40%, a little bit less, but effectively 40%. Throw state taxes on top of that, could be 45% or more, depending on where you live.
So how do you pay 18%? Well, the answer is it’s the difference between an effective rate and a statutory rate. Statutory rate may be 40%, but when you get all your deductions and credits, all of which is legal, it’s all in the internal revenue code. By the way, I should confess, I’m a tax lawyer. I was tax counselor of the Citibank. So among other things, I kind of know a lot about the internal revenue code.
But when you get your deductions and credits, the amount you actually pay, that check you write to the treasury divided by your adjusted gross income can be a much lower percentage. And in between the two, between adjusted gross income and the bottom line, there are always deductions. And so that’s why they pay a lower rate. Incomes is no surprise. So Biden said, we’re going to charge you 25% no matter what.
In other words, we’ll disallow deductions to the extent we have to, so that you pay 25% of a top line number. And then he said, went on to say, this is going to raise, I forget the exact number, but it was in the tens of billions of dollars, maybe more of additional taxes, as if he’s going to balance the budget or something like that. Well, that’s what’s called a static analysis, which is you take everything, you know, you change the tax rate and you get more taxes, and you say, we’re going to get all that money.
Leave aside the fact that they would spend it on something. But that’s how that analysis works. But the world is not static, it’s dynamic. What happens when you actually do that? I know what happens. Everyone goes to Puerto Rico. Why Puerto Rico? In Puerto Rico, if you live in Puerto Rico, you pay 4% tax, not 40%. And you say, why isn’t everyone moving to Puerto Rico? Actually, they are.
There’s a place outside of San Juan that’s like an enclave, but it’s pretty big. It’s the size of a small city. It’s got hotels and restaurants and theaters and beautiful beaches and swimming pools and palm trees and everything you would expect. You go down there and walk around and assuming, you know, Wall street, you’ll say, oh, I’m not going to mention names, by the way. I don’t want to put a target on anybody’s back, but that guy is the head of the biggest hedge fund, or that guy over there, we see him on tv all the time, or that guy’s the CEO.
The way you do it in the hedge fund world, and I’ve spent ten years, or actually longer in hedge funds, you have a deferred compensation plan. So let’s say you made, I don’t know, $20 million or $30 million. Well before the year begins, you sign a contract. You said, I don’t know how much I’m going to make this year, but whatever it is, I want 90% of it to go into the deferred compensation plan.
I’ll take some because I got to pay my bills or whatever. And you do that year after year, so you don’t pay taxes on that. So think of it. It’s like a 401k. When you put $10,000 into a don’t pay taxes at the time, you exclude that from the tax base, and then when you retire, you withdraw it and you pay taxes then. But it might be 25, 30 years later, depending on when you put the money in.
It’s the same thing, except we’re talking billions, billions of dollars, not $20,000. And if you do that for 1015, 20 years and then the earnings on it, you put all this money in, the earnings on it are also tax deferred. So the whole thing, it’s like a zeros. So what happens when you’re 55 or 60 or whatever and you’re ready to retire and you’ve got 400 million, 500 million, a billion in this deferred comp plan? You’re like, okay, well, now you got to take it out and pay taxes.
No, you move to Puerto Rico and then you take it out and you pay 4%, not 40%. It’s a lot like the wealthy French, they all moved to Monaco. So if you think any billionaire or even sent a millionaire or anyone with a high income is going to sit there and pay the taxes that Biden wants, that’s nonsense. They’re not going to do it again. I happen to know all the ways around it.
All legal, by the way. I just want to make sure everyone understands this is perfectly legal. But just fly to San Juan and drive out to this enclave I’m talking about and you’ll see a lot of familiar faces. So what is that? It’s rhetoric. It’s a kind of populism. It’s attacks the rich. Populism. It’s red meat for the know. AOC wore know dress to the Met gala a few years ago as a white dress.
And then red is on her butt. It said tax the. So it’s red meat for the progressives. But it’s never actually going to raise any revenue because the reason people are billionaires is because they’re not stupid generally, and they know ways around this. So that’s the kind of thing. And then there was another tax bill. I’m just sorry, I’m just checking my notes because I was doing all this in real time.
He was going to do a 21% corporate tax, 25% tax on billionaires. And then of course, they always use the phrase fair share. These people should pay their fair share. Okay, I have a two word answer to that. Hunter Biden. Hunter Biden was a tax evader, money launderer, didn’t file returns for many years, finally got around to filing them. Filing them long after the fact. He has a sugar bro in Malibu who’s very wealthy, Hollywood producer who’s paying all of Hunter Biden’s tax bills.
The Justice Department sat on the case for years until the statute of limitations ran out. And then it. Well, okay, you’re. We couldn’t finish the case. The IRS agents, the whistleblowers have testified that they had the goods in Hunter Biden, but they were not permitted to investigate the way you normally would. And again, I’ve done tax audits. I’m a tax counsel for many years. I know how all this works.
They basically let Hunter Biden skate and then finally he got around to paying some back taxes. He didn’t have the money, but his sugar bro did. But there were no criminal charges brought. Plus it’s money laundering. The income that he wasn’t paying the taxes on were the bribes from Ukraine and China. Now all this is pending. Hunter Biden is going to testify publicly, I think next week under oath.
There are other criminal investigations pending. But I’m just trying to point out the hypocrisy of Biden huffing and puffing about tax the rich, 25% tax on billionaires, 21% tax on corporations. Meanwhile, his son is laundering the bribe money and not paying taxes on it. So this is the kind of hypocrisy, outright lying, et cetera, that you will not read in the New York Times. But that’s okay. We’re not the New York Times.
We’re trying to get to the facts. But beyond that, independent of the hypocrisy of the hunter Biden situation, is the fact that you’re never going to get this money because the people who theoretically owe it are always one step ahead. And if you want to get it, get rid of the Puerto Rico loophole, which goes back to the 1920s, by the way. But you’re not going to get it any other way.
And they won’t change the Puerto Rico loophole because it’s good for Puerto Rico, which is, a lot of democratic voters come to New York from Puerto Rico. So that’s just hypocrisy and stupidity. What else? That was the fair share screaming. I was talking about shrinkflation. Again. He’s hung up on Snickers, by the way. If you buy a Snickers bar, it costs more and there’s less snickers. I don’t know what snickers, that’s a brand, but I don’t know how he counts the snickers.
But he’s talking about potato chips in the bag. And it’s true. It is true that you used to buy a certain size bag, or maybe the bag is the same size, but there are fewer potato chips in it. And you pay the same price. So maybe pay a higher price for a few. That’s actually true. But you can call it shrinkflation. It’s inflation. When you pay more to get the same or when you pay more to get less, whether it’s Doritos or a new house or whatever, that’s inflation.
And he’s blaming the food purveyors, the food companies and the distributors and I guess Fritolay, Pepsico, General Mills, whatever. He’s blaming all the companies. No, they’re companies. They’re trying to make money. They’re not gouging the public. They’re just trying to make a profit in a world where inflation is out of control because of Biden’s policies. So what you have, he’s screaming about. Don’t. Again, I don’t know why he’s hung up on potato chips and snickers, but he’s screaming about it.
But he caused it. Or if you want to blame the. And by the way, it’s not from the Federal Reserve. Money printing. Money printing. No, the Fed has not been printing money for years on that. The Fed has actually been reducing the money supply. They’ve been doing the opposite. When the Fed owns a treasury note and it matures, if you take the proceeds and buy a new treasury note, you’re keeping the money supply constant.
If you buy treasury notes out of thin air and print the money, you’re increasing the money supply. Okay, that’s one kind of money printing. The Fed has not been doing either one of those things. What they’ve been doing is when the treasury note matures, they do nothing. The money disappears. It’s the opposite of money printing. It’s like throwing money into a furnace and burning mean. The Fed can make money appear.
They can make the money disappear. They can make the money disappear. Well, the Fed has been making money disappear. They’ve been shrinking the base money supply. So the inflation we’ve seen is not from monetary policy. Sorry, my austrian friends, it’s just not. It is from fiscal policy. It’s from the deficits. It’s from the spending, the COVID handouts, the pandemic, the payroll protection plan, the $1,400 checks, the $600 checks, the Inflation Reduction act, which is a fake name.
I was the real name, but it was a fake description for what was actually the green news scam. We talked a lot about that trillion dollars of subsidies, handouts, et cetera, for a bunch of green news scam deals that are completely unnecessary because there is no climate crisis. We don’t have time to kind of do a deep dive on that, but I’ve written about that a lot. So I think regular readers are familiar with the fact that the co2 emissions have nothing to do with climate change.
It’s caused by solar cycles, ocean currents, volcanoes, and actually moisture known as clouds. Co2 doesn’t cause global warming, it’s caused by global warming. So if you have other factors, then you will get more co2. But the co2 is not the cause, it’s the effect. So they’re understanding the science is all fake science, but they don’t mind spending a trillion dollars on this stuff. But that’s what causes inflation.
It’s not monetary policy, it’s fiscal policy. That’s Biden’s responsibility, and that’s why we’re getting the inflation. So for him to stand up there and complain about it shows that he doesn’t know what he’s talking about. But that really comes as no surprise. He attacked the Supreme Court from the podium, obviously didn’t like that. Nine nothing ruling in favor of Trump. On the subject of could a state strip Trump from the presidential primary or general election? And they were doing it in Colorado, Maine and Illinois.
20 other states were trying to do it. Supreme Court said no. Done. A state cannot take a candidate off the presidential ballot. State ballot, yes. Presidential ballot, no. And it was nine nothing. It was definitive. Again, we can drill down on a little detail there, but we don’t necessarily have time for that. But the point being, we do have separation of powers under the US constitutions. Article one, article two, article three.
It’s the Congress, the executive, and the judiciary. And the Supreme Court’s kind of nice to show up and sit there, although I think Alito was not there. But to berate the Supreme Court from the podium, from the executive branch to the judicial branch face to face, is incredibly bad form. It’s the kind of thing that tears at the separation of powers when we should be trying to maintain a separation of powers.
It’s part of the genius of the constitutional system that has lasted over 230 years at this point. Why would you want to tear at that fabric? But he did, and kind of goes with using the word hell. It’s vulgar, it’s uninformed, it’s a little nutty, but that goes with the drugs and being hyped up and all that. But that was just one more example of how he’s kind of a trashy, you know, you just don’t do that.
But he did, again, just kind of going through my notes, he talked about how the US military is stepping up to keep the Red Sea open from the hootie rebel attacks. I saw. I have news here, Mr. President. The Red Sea is not open. All the major oil tankers, what do you call very large crew carriers are going around the Cape of Good Hope. I’ve been there. It’s a beautiful place, but it’s a long way from the Suez Canal.
Suez Canal is effectively closed. One cargo ship went through a few days ago, was sunk. So it’s sitting there. It’s underwater. The bow’s sticking out of the water. It’s not that deep, but they sank a vessel. Yesterday, another vessel was attacked from crewmen were killed. All the major oil companies are shipping their oil around the Cape of Good Hope. If it’s set in for Europe or, pardon me, the western hemisphere, the Suez Canal is effectively closed.
So for the president to say, we’re bombing the hooties, someone said to me, we’re going to bomb the hooties back to the Stone Age. Hooties are in the Stone Age. I mean, you can’t bomb them back to the Stone Age. They live in caves, practically, and underground tunnels, and they ride camels and donkeys, but they have drones and they have rockets. They know how to use them. The hoodies have been getting bombed for 25 years.
If you include Saudi Arabia, and, I mean, go back to the 1950s, the NASA of Egypt was fighting rebels in Yemen. So that war never ends. But the idea that Biden can do anything about it is false. And we see that. As I say, the Red Seas actually closed. At one point, Biden called for a ban on AI voice impersonations, AI’s artificial intelligence. And yes, that technology, if they have enough samples of your voice, can synthesize your voice.
My thought was that actually would be a big improvement on Biden’s actual voice, but he’s against that. And the other thing is Marjorie Taylor Green. She’s one of the more kind of a little bit rabble rouser. I like her. I think she’s smart. She’s a congresswoman from Georgia. She was the one. She had a red jacket and a red Maga hat. Not the typical dress coat for the House representatives, but that’s okay.
I mean, all the Democrat women were wearing white. I think it’s for women’s suffrage. They kind of got that in the 1920s. So I don’t know what that protest is about, but the democratic women wearing white marcher teller greens and red. But she was shouting, say her name. Say her name. And this was a reference to Blake and Riley, who was the Georgia university student who was killed by an illegal immigrant while she was driving, jogging, rather, and brutally killed.
We all know about the open border and the criminals coming in, the terrorists coming in, and the result of that. But here, often in these crises, these political crises, that can seem a little abstract, there’s a concrete case. An individual who’s a victim in a brutal way, and she or he becomes the symbol of what’s wrong with the policy in this case, open borders and letting criminals. She, sadly, was the victim of a brutal murder by an illegal immigrant who, by the way, had been arrested multiple times before and released.
That’s a whole other issue in New York. It’s a whole other issue with the sanctuary cities, the local police not being allowed to cooperate with immigration and customs enforcement and the sanctuary city laws, and liberal Das Alvin Bragg and others in Philadelphia and Los Angeles and San Francisco and around the country. So this is someone who should have been either put away in jail or deported. He was earlier deported and came back and he kills this poor woman.
So Marjorie Taylor Green was yelling, say her name. Say her name. And Biden kind of was ready. He had a little Lincoln Riley badge, and he holds it up and he goes, I’ll say her name, lincoln Riley. So he couldn’t say her name. He said, lincoln. It’s Lincoln. And so he tried to say her name. Couldn’t even do it right, and then went on to say she was killed by an illegal alien.
Well, if you know anything about the progressive lexicon, you’re not supposed to say illegal alien. That’s what he was, by the way. He wasn’t illegal alien. But they’re trained to say asylum seeker or something other than illegal alien, which is exactly what they are. So vulgar, hyperbolic, unbalanced, hypocritical. A lot of really bad policies. But if you like him, he’s your guy. So he’s getting good reviews in the liberal press because that’s what they do.
I think a lot of the conservative press is kind of making some of the points I’m making, although I’m trying to be a little more pointed, because that’s our job. We want our readers and listeners to know exactly what’s going on. But he was a guy who was pumped up on drugs, engaged in a lot of policies that won’t work for the reasons I explained. A lot of hypocrisy when you take into account what Hunter Biden has actually done and the fact that Biden himself is kind of a small time crook, and then couldn’t even finesse the name of the victim and then went on to say, no, legal immigrant, which he’s not supposed to say.
Mrs. Q. At the start, I thought it was, if you want to do something scary, this is scarier than any horror movie. Watch Joe Biden on tv and mute the sounds. Hit the mute button and watch him physically watch him stumble, watch him shuffle. Look at his facial expressions, et cetera. It’s one of the scariest things you’ll ever see. But the yelling and screaming from the podium last night didn’t help.
Yeah. One takeaway from what you said and watching the state of the union last night, as I think Biden sort of trashed trickle down economics, and then he’s obviously not going to say it. But what you just said is the inflation that we’re getting from overspending, that’s just trickle down inflation. It’s just coming from everywhere. It’s raising the prices of everything. And they won’t even admit that. They’re blaming chip manufacturers or whatever.
Like you’re saying one last thing on the State of the union, anything for the next, say, like three months. Or if you’re thinking, like, is there anything that you can think that happens because of anything that was said there? Anything that would spur anything that’ll come in either the markets or America or from Trump in the next few months? Nothing that will change what we’re already seeing. Trump’s ahead in the polls.
He’s ahead in the national polls, which kind of don’t matter because we don’t have national elections. It’s state by state. But when you look at the swinging states, they’re really, honestly, Matt, there are like six states that are going to decide the know. Biden’s going to win California, Trump’s going to win Alabama, Biden’s going to win New York, Trump’s going to win Mississippi. We already know that. So there are only six states that are going to decide the election.
We know what they are. It’s Arizona, Nevada, Michigan, Georgia, Pennsylvania, and maybe Wisconsin. So maybe, I don’t know, throw New Hampshire in for a couple of votes. I live in New Hampshire. We were sort of a 50 50 state. But those states are going to decide the election. And Trump’s ahead in the polls in everyone, every single one, by sometimes two, 3% margin error, I don’t know, 2% is a pretty good lead in a world where most elections are decided by less than 1%.
But bigger leads in other states, 5% in some of these swing states. The other thing is that’s what they call a horse race. Just Biden, Trump. When you factor in a third party, RFK Jr. Cornell West, Jill Stein, the no labels party has not gone away. They didn’t get Joe Manchin, but we’ll see who they then. Trump’s leads are even bigger because some of the third party supporters might kind of lean Trump’s way, but more of them lean Biden’s way.
There are other trends in place. Blacks in general and black men in particular are moving towards Trump. Hispanics are heavily moving towards Trump. So I guess to kind of frame your question a little different. Well, just to frame the question a certain way, did I hear anything last night or seen anything last night that’s going to change any of those trends? And the answer is no, I didn’t hear anything.
If you’re a black man dealing with family dysfunction, lack of education, crime in the neighborhood, trying to get ahead, et cetera, did Biden ranting about tax on billionaires and pay your fair share change? I guess what did surprise me a little bit. It was all progressive red beat. It was an opportunity. If he wants to fade to the middle a little bit or come up with some moderate policies or say, well, we will do something about the border, but he didn’t.
It was a straight progressive party line. That’s fine if that’s your base, although it’s not clear that his base is holding together because a lot of the people in the progressive category, at least in certain states, Michigan in particular, are Arab Americans. There’s a very large arab community in Detroit, and they’re leaving Biden’s camp because of his policies in Gaza. Now, that doesn’t mean they’re going to vote for Trump.
I’d be shocked if they voted for Trump, but if they just stay home, that by itself is enough to cause Biden to lose the election. So right now I’ve got to, we’re going to update continually. So I’m not putting a stake in the ground, but Trump looks like a clear winner as of now. And I would go further and say the popular vote will be close, doesn’t matter because that’s not how we do it.
But this could be an electoral college landslide. I could see Trump getting 300 and 2325, but you need 270 to win. Out of 535, I could see Trump actually 538 because three for District of Columbia. I could see Trump getting 323, 30, maybe more. So it could be an electoral college landslide. And nothing about last night changed it. We know there’s a lot coming in the next weeks and months.
We appreciate it. And for everyone at home, we’ve got everything heard today. And stay tuned to strategic intelligence in these calls, and we’ll keep it up to speed. .
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