 Good morning, everybody. It's still morning, I think. You know, what I know is that when you address an audience this size, there's always people in the room and this sort of stuff is brand new to them. And then there's people in the room where this stuff is, you know, old hat. They're professionals at it. They understand everything that's being said. So I like to, you know, bring it way down, if possible, so I'm probably going to be talking to that little baby that's in the room. Now, I should probably confess to you that I do not have good news for you this morning. I'm hoping you anticipated that. Also, I don't have any solutions either. It's not that there aren't any, but we just don't have the time to explore those. Now, what I do have for you is good factual information about potential economic dangers that you should be aware of. Now, some of them are pretty bad and two of them are really, really bad. So yes, the focus of my talk will be on some, certainly not all, of the major economic problems in and surrounding the Trump economy. So the Trump economy, if I had to describe it, I would call it scary, scary and unsustainable. There's a lot of nail biting going on out there in several areas. For example, on one level we have financial analysts and big money managers of every kind that are worried because they are seeing the interest rate climb. They know what kind of an effect a rising interest rate can have on certain financial markets, especially the emotional ones, like the stock market and like the real estate market. Now, contrasting that and on another level, altogether is this strange phenomenon whereby the majority of Americans still believe that a booming stock market and a booming real estate market are indicators of a healthy economy. And our monetary policy leaders would want us to believe exactly that. Folks, that's far from the truth. There is no genuine savings in this economy to account for the market highs that we've had. These two markets have literally purposely been driven up. More accurately, they've been blown up like a bubble by a prolonged low interest rate environment that's been pushed down to near zero for the better part of a whole decade. That's what's done it. But now you see that the interest rates are starting to rise and the indicators are pointing to the markets going the other way. Most astute analysts are realizing that we are at the end of this ride. But actually pulling the trigger cashing out right now, either for themselves or for investors they're advising, that is actually the present conundrum that we're still in. The markets have been whips on around so much that they can't seem to make up their minds. Now the reality is that more interest rate hikes are on the way. Just late last month Chairman Powell announced that the target interest rate was to be in the range of 1.5% to 1.75%. Just so we don't confuse anybody, he's talking about the federal funds target interest rate. This is the rate that banks charge each other for overnight loans to meet their reserve requirements and it's probably the only interest rates you ever hear the government talk about in the news media. But that rate affects the bank prime rate. Now that's the interest that you and I pay if we have good credit. It's currently now at 4.75%. Now if you don't have good credit well you're going to have to pay more. You'll pay 5, 6, 7, 8 or more. But keep in mind that Chairman Powell also made it very clear that there will be 3 and possibly 4 more interest rate hikes this year. So you can see where all the nail biting is coming from. In effect these interest rate hikes are contracting credit in the economy. The Fed is pulling back on credit rather than expanding it right now. Now you add this to a president that is just so unpredictable and so contentious that every time he tweets he shakes up the markets and he drives us closer to what we definitely don't want right now which is a stock market crash. Now there is one bright spot in the Trump economy and I should mention it because it's coming from the sector that really will have make an effect on this economy. A very meaningful one if it is allowed to flourish. And it's the sentiment that's coming from the business community. Now here I mean the small and the large businesses that employ most of the American workforce. These businesses have been given a surge of optimism ever since the 1.5 trillion dollars in income tax cuts. And these businesses are just now starting to act on that optimism. They're doing it by hiring people and expanding operations. This is great. It's excellent. What's not so good about it is all of this geopolitical wrangling that's going on right now. Most of it being caused by President Trump. And this could easily derail the optimism. Plus those 1.5 trillion in tax cuts this is money that the government is going to have to borrow to make good on. And there are signs already that there will be close to 1 trillion dollars borrowed this year alone. Now that is a massive amount of U.S. Treasury that have to be issued and added to the already humongous pile of 21 trillion dollars in total national debt. Now let me see if I can put this in some sort of perspective. If I had a four by six white board right here to the left of me I would take a black marker and when I would ride across it in all capital letters the word confidence and I would underline it. And then I would tell you that as mysterious as this may sound to you our entire monetary apparatus is resting on that. Now by that I mean that if ever confidence evaporated the entire economic structure would come crashing down all around us. That is how fragile our economic world is and has become. Now underneath the word confidence I would write the U.S. Dollar and underneath that I would write the U.S. Treasury because they're both very important. The U.S. Dollar from an international world currency perspective is still the dominant currency reserve currency that is used by foreign nations to peg their own paper currency. But the dollar definitely is weaker from where it was a hundred years ago. But it still commands 64% of the 11 trillion dollar international reserve currency market. So by that I'm saying that the financial confidence in the United States is still there but it is definitely waning. The strength of the U.S. Dollar is very important to us because in a sense this is what allows our government to run deficits because those foreign governments that use dollars will park those dollars in U.S. Treasuries. So that's me saying to you that the U.S. Treasury for everyone that uses dollars is still the safest and most credit worthy investment instrument in the world. To prove it to you foreign nations own 6 trillion dollars in U.S. Treasuries. That also makes the largest debtor country on the planet. So we have a lot of creditors out there. And of course China holds the largest single share of that at 1.3 trillion dollars. So Trump's threats on this trade war with China that isn't helping the confidence factor in one bit. Now lurking behind all of this are other serious problems that because of time constraints I really can't get into. But I do want to mention two very important ones and they are big. Now these two topics aren't openly publicized as much as you would want them to be. The information is kept hidden behind huge walls of extensive financial data and a bunch of legalese. You have to keep in mind that the Federal Reserve employs more than 300 Ph.D. economists and countless of lawyers and accountants. But I do see that this allows our monetary officials to schedule when they want to spoon feed this information to us. And of course this makes us have to dig a little harder for the information. You have to study a lot more papers and reports and sometimes you even have to read congressional laws. What we find is that the information contained within these subjects do spell out dangers for financial markets. And of course even for us as individuals and so this is one reason we want to keep it sort of close under wraps. For example one of these subjects is the Dodd-Frank Act. Now this is the law that was enacted in 2010 to deal with ramifications of the next massive financial crisis such as the one that we experienced in 2008. In reading the law you discover that right now just being a mere bank depositor in a commercial bank has become risky for us. This 1000 page law covers a lot of areas but it hones in primarily on preventing the systemic risk problems that are associated with the too big to fail financial institutions. Namely the big commercial banks. In other words when they fail they fail in mass and they fall like falling dominoes. Now what is noteworthy in the law is that in such a future crisis there is to be no taxpayer bailouts to save these giant institutions. Now I don't know about you that makes perfect sense to me because if they tried that again on us I really believe there will be riots in the street but the alternative in the law is not that good either. I'll explain a little bit more of that in just a minute. Right now I want to introduce the other big problem that's out there and this one has to do with the massive 4.5 trillion dollar sell off government bonds by the Federal Reserve. We do all remember QE right? Quantitative easing. Okay what I'm talking about here is a reverse QE and it officially began this past October in 2017. And what's our monetary leaders the way they introduced this was so low key. I remember Chairman Yellen and Congress all this stuff you won't even know what's happening it's you know it's boring and it'd be like watching paint dry on the wall honestly that's nothing of the sword this is a huge deal if you recall during the initial days of the 2008 financial crisis the Fed Chairman Bernanke at the time went on a buying spree of government debt for the explicit purpose of expanding credit to stimulate the economy. Now that buying spree did not end till 6 years later in 2014. Well by that time the Fed's balance sheet had ballooned to epic proportions this 4.5 trillion dollars. So now the plan is to sell this entire massive load of U.S. Treasuries and mortgage backed securities over the next 3 to 5 years in amounts totaling up to 50 billion dollars per month. That's a lot of bonds hitting the marketplace. Now what's important to recognize just right here is probably my whole takeaway from my entire discussion this morning. When the Fed buys assets it lowers the interest rates and expands credit in the economy primarily through bank lending. On the other hand when the Fed sells assets like it's starting to do right now it raises interest rates and contracts credit in the economy. In other words it's cutting off credit. This is why interest rates are rising and this is why they will continue to rise all of which is a very risky move at this particular time in the Trump economy. Where the governments continue to issue U.S. Treasuries to fund their deficits and now the 1.5 million dollars in a trillion in tax cuts you added that this massive sell off by the Fed those two combined you can only describe it as a deluge of bonds hitting the marketplace. We have to ask the question who will buy them all what if the demand is not there. So again we definitely don't need loss of confidence in the United States at this particular time. Now all this gets even more unnerving when people panic and nothing panics people more than when markets crash like the stock market or the real estate market and that's the potential that's facing us right now because of the rising interest rates. They panic. The first thing they do is they run to the bank to get their cash out and that's when they discover that their money is not there and that the bank can't give it to them. It bankrupts the bank on the spot. Bank has to close is the Achilles heel of all banks ever since they've been created in any bank to its knees. Now this important fact brings us back to the Dodd-Frank law. In order to deal with a systemic risk problem that's inherent in banks, Dodd-Frank says this if your bank goes down then your bank deposits plus the bank stockholders, monies and assets will be pooled together and used in an attempt to resuscitate that bank. That is why they refer to it as a bail in as opposed to a taxpayer bail out. Now depending on how successful that resuscitation is you may or you may not see all your money back. Now we haven't had to test that in this country yet thank God but it's been tested several times in Europe. So yes all of this is very worrisome. What about the FDIC? Or are our deposits insured up to $250,000 per account? When this question comes up I like to remind people because I don't want anyone to be naive that during the 2008 financial crisis we had 1200 banks that went underwater 1200. And so yes the FDIC was very busy going around the country trying to shore up customer bank accounts. The folks they literally ran out of money. They went $8 billion in the hole. They had to go to the U.S. Treasury to get a loan just to be able to shore up their reserves. So the federal part of the FDIC is that line of credit with the U.S. Treasury. But on account of the Dodd-Frank law since 2010 it's questionable now. Since the law says very clearly no more taxpayer bailouts. This is my final comment because they're telling me my time is up. The FDIC currently has a reserve fund of $88 billion which is a nice hefty amount of money. But it has to insure $7.1 trillion in insured bank accounts. So just the disparity between those two numbers, $88 billion to $7.1 trillion tells the whole story. You take a calculator and the FDIC has maybe a little over 1% in reserves to cover the total insured bank accounts in the country. Now I realize I've thrown a lot at you. So if any of this is stimulating any questions, we can certainly talk about it during the break and of course during lunch and I think we are going to have a Q&A a little later on. Well thank you so much for making the effort to come out today and thank you so much for your kind attention too.