The President's Daily Brief - February 9th, 2023. Inflation Continues to Impact Your Pocket Book

Episode Date: February 9, 2023

It’s February 9th. You’re listening to the President’s Daily Brief. Your morning intel starts now. ------ A good day to you, ladies and gentlemen. I’ve got a special State of the Union brief for you this morning that helps explain America — and the world. Last night, Joe Biden delivered the annual State of the Union address in Washington DC. As expected, he touted his accomplishments on a range of issues, domestically and abroad. Although, not everybody agreed with his assessments. Politicians do tend to brag about things they didn’t actually do.  And that’s what we’re going to focus on this morning. We’re going to talk about what Biden said regarding the issues of greatest importance to you — and his record on each, using polling and data.  In fact, what polls show is that you are most interested in and worried about three things: The Economy, Immigration, and Education. But that’s just on the domestic front. We’re also going to talk about what you all think of Biden’s handling our most pressing global threat — which is China.  And then, before I let you go, we’ll close out the podcast with a note on what the world thinks of the state of our union.  ----- Please remember to subscribe if you enjoyed this episode of the President's Daily Brief. Email: [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

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You're listening to the President's Daily Brief. I'm your host and former CIA officer Brian Dean Wright. Your morning Intel starts now. A good day to you, ladies and gentlemen. I've got four briefs for you this morning that are shaping America and the world. First, the fight against inflation just got a little bit tougher. I'll explain how the price of eggs and used cars tell us that we've got a ways to go to tame those inflationary pressures. Second, some rare good news on dirty green energy.

You remember those very big wind blades? They might not end up in landfills after all. Third, an update on the China Balloon Saga. Countries around the world are getting briefed on China's program, and Beijing is not happy about that. Finally, a development that you never saw coming. I'm going to make you the president of Burkina Faso this morning, living in the city of Uwagadugu.

And I'm going to do that to help explain a very important story in international finance. Later, we close out the podcast with a listener question about the state of the union address. Lance in Mississippi heard Joe Biden say something very strange about the oil and gas industry. I'll tell you what it was. But before we get to that, we got to get started with this. Two updates this morning that directly affect your pocketbook and spell trouble in the fight against inflation in America. So let's first talk about some bad news about eggs.

As PDB listeners know from our briefs last fall, bird flu is wrecking havoc on egg-laying hens. Millions have been slaughtered. Plus, we've got an increase in the cost for feed and transportation. And so that's why, according to data from the research firm Nielsen IQ, the average retail price for a dozen eggs, stands at $4.40.40 nationally. But did you notice I used a little bit of a tricky phrase there? Retail price. You see, grocery stores pay a wholesale price.

and that is actually coming down. Wholesale prices of Midwest large eggs have declined to $2.81 a dozen. That's according to the research firm, Earner Berry. And that's quite a drop. Wholesale prices were at $5 a dozen in just December. So what's going on? Why the big drop and why are you still paying very high prices, but your grocery store isn't? Well, part of the answer is profit, no surprise there. Although grocery store chains like Morton Williams in New York and Carnes Food in Pennsylvania are saying, yeah, look, the wholesale prices are down, that's true. But we don't want to drop prices for eggs because we're going to have to raise those again very soon. In fact, this spring, and you know what, they're not wrong.

And that's because come this spring, wild birds will once again migrate across the country, which kicks off the annual bird flu season, which where cases normally start to surge regardless. Although I'm not sure that I buy the logic here, right? Grocery stores saying, look, we don't want to save consumers some money for a couple months, so we're just going to keep prices high to avoid confusion. But nevertheless, that's their story, and they are sticking to it.

So overall, folks, the key takeaway here is this. You should expect to see your egg prices elevated for, well, quite a while to come. So from egg prices and such we move on this morning to used cars, and I promise there is a connection here. For months now, the prices of used cars have been dropping, mostly because consumers have pulled back on their purchases. But in January, prices of used cars actually shut up. It surprised a whole bunch of very smart financial folks. So according to data from the firm Mannheim, wholesale used car prices were up 2.5% last month. And that's because they're were more buyers competing for those cars. Retail sales were up 16% in January over December.

In other words, consumers like you have been waiting on the sidelines for prices to fall, which they have been over the past six months. But in January, folks apparently decided that prices were good enough and it was time to buy. So why do we care about that? Or frankly, the price of eggs staying high for a long time. Well, the Federal Reserve, looks very carefully at this data to understand the health of the economy and whether inflation is too high. And if it is, which it certainly is, and this latest data show us it's getting worse a bit, well, then they raise interest rates to cool down the economy, trying to get inflation from the 6.4% it is today to around 2%, hopefully at some point in the near future.

So with this data of increasing prices for things like eggs and cars, it could mean an uptick in inflation, which could force the feds to keep pushing up interest rates. Well, in turn, that makes it harder to buy, say, a home or pay off that credit card debt amongst other things. So that's why I will keep you posted on this data and see if we can't get you ahead of the information curve about prices and inflation, all to protect you and your wallet. For our second brief this morning, we are going to talk about dirty green energy, wind energy actually, and one could argue that it is good news. The company Vestas announced yesterday that they, along with a university in Denmark and a partnering company in the United States, have all developed some sort of chemical brew

that will otherwise dissolve or weakened wind blades, allowing them to be recycled. Said the company Vestas, quote, this development signals a new era for the wind energy industry, end quote. Well, maybe. Vestas didn't release details on the secret chemical composition of their new wind blade brew, although nuts worry, I'm sure China will steal it soon enough. But they did say this. They planned to run further tests over the next few years on old wind blades to see if their new stuff works as well in the dumps as it does in the labs. And to be clear, that is where the blades currently go to the dumps.

As PDB listeners know from our brief on December 27th, windblades get dumped into truly massive landfills all around the world, including in the U.S. cities of Sioux Falls, South Dakota, and Casper, Wyoming. And once there, they sit for eternity, leaving those cities with that dirty green legacy. Now, what's especially interesting about this development, I think, from Vestas, is that just six months ago,

they were saying that it would take them until the year 2040 to cook up some sort of chemical brew to break down and recycle these windblades. So on one hand, this development is, well, it seems like good news, a much faster timeline. But on the other hand, goodness gracious, what is in that, chemical soup makes me nervous. But whatever your thoughts on this, it doesn't change wind powers three big problems. First, these things are just ugly. Second, they kill lots of birds, hundreds of thousands each year, in fact, just in the United States alone. And third,

sometimes, well, sometimes the wind just doesn't blow. And that is rather unfortunate if you like your electricity to work for you 24-7. Still, I will keep you posted on these innovations. They are, I think, and a pretty important part of the calculus as we decide how dirty we want to get with our energy. With that, ladies and gentlemen, let's take a quick break. When we come back, I've got two more critical pieces of news for you on the international front. So hang tight, and we will be right back. Welcome back to the PDB. I've got two more critical pieces of news for you this morning.

First, we've got an update on the China spy balloon saga. The U.S. government has said, and governments around the world are confirming that the Pentagon and U.S. State Department have both briefed at least 40 nations on the Chinese spy balloon incident and China's capacity to use this stuff in their countries, too. The medians were apparently held in Washington, D.C., and listen to this, in Beijing, too, where U.S. diplomats hosted other diplomats at the U.S. Embassy. Reuters News Service is reporting that the State Department has sent out cables and teams of briefers to foreign embassies like these in Beijing to share what we know. plus how China could use these balloons to target their countries as well.

Apparently, the briefing includes an unclassified assessment that these balloons are not weather research vessels, as Beijing is saying. Instead, Washington is apparently pointing out the use of solar panels, which in turn create more energy than would be necessary for a simple weather balloon. Also, they shared the flight path and how that didn't match with the wind patterns. And to explain that, the U.S. diplomats apparently shared pictures of rudders and propellers from the balloon, which is odd because those pictures haven't been shared with us, the average citizens. Lastly, foreign partners were apparently briefed that China operates its balloon spy program out of a certain province called Hainan province, which is off of China's southern coast. And from there,

apparently the program has targeted not just the United States, but also Japan, India, Vietnam, Taiwan, and the Philippines. So when asked for comment, by the way, the communists in Beijing, well, they unfortunately didn't even bother to pick up the phone. Well, that's according at least to the Pentagon, who said that after they shot down the balloon over South Carolina, they tried calling China to discuss the matter, but the communists apparently declined saying that they were busy

cleaning their bathroom grout. Okay, they didn't say that. But they did offer up a very lame excuse and said that they couldn't come to the phone right now. So as ever, I will keep you posted on this one, folks, no excuses from me. Finally, this morning, I've got a subject that it is fair to say. Nobody is really talking about, but honestly, really should be. Because it's one of those developments that could change our lives without us even knowing until it's too late. And it has to do with finance and currencies, which, let's be honest, just kind of boring and confusing, but not to worry. I,

am on it and we are going to make this one really interesting so that you are both informed and you can sound super smart to all your friends. So let's get to it and let's start with some imagination. I want you to imagine that you are the president of Burkina Faso. That is the Central African country that we've talked about before with the capital city of Uwagadugu. And you, Mr. or Madam President, need to buy yourself some oil. So you call me. up and I am the president of Russia, Brian Putinskov. And as luck would have it, I have some oil that you can buy. But now we have a pickle, because in what currency do you in Uwagadougu pay me in Russia? Well, you say, I've got some of my local currency. It's called the

West African Frank. And I say, well, to be frank, that currency sounds silly. It sounds like funny money. Funny money, unfortunately, doesn't hold its value. So if you, you want to buy some of my oil, you are going to need to pay me in a currency that I think is real and that I can use all around the world and that it holds its value. So you, Mr. or Madam President, and I, we talk and we agree that we're going to use the most popular currency in the world. It's the most dominant of what's called a reserve currency, and that is the U.S. dollar. And what I just described, by the way, folks, between you and Uwagadugu and me and Moscow, Well, that conversation and that transaction happens every day millions of times a day.

The world does business in the U.S. dollar, all because it is real, it is global, and it holds its value because, well, people think it has value. And it's been that way for a long time now. The U.S. dollar first became critical to global trade starting after the end of World War I and most especially at the end of World War II. that's when most businesses and traders and companies pushed aside the British sterling or pound for the good old U.S. greenback. Now, if you're the United States, this was a great development. More people want your currency. And once they have it, they want to spend it.

And what better place to spend it than in the United States? They can buy stuff made in America or buy American assets like buildings or companies. And they can actually play in the U.S. stock market, too. So the bottom line, folks, is that you in the United States, well, once you get that reserve currency status, you are the place to go in the world of business, all because of that U.S. dollar. But let's say that you are the president of Burkina Faso or Russia, and you end up on America's naughty list for whatever reason, fair or not.

Well, Washington, D.C. can make your life very difficult. And that's because when it comes to finance, well, it gets a little bit complicated. but what we've seen with Russia, well, the U.S. can slap on sanctions, right? Seize your bank accounts and shut you off from access to the banking system that uses or exchanges dollars. Well, that means that naughty countries like Russia have to start finding new ways to exchange goods and services. You know, maybe they barter or they use gold or here's the big one. They find a new global or reserve currency. Now, there hasn't been one so far, but maybe, maybe, or maybe.

a lot of countries will say, it's out there. So keep all of that in mind as background as I share this with you now. Indian oil refiners announced yesterday that they would trade with Russia using the currency of the Arab country called the United Arab Emirates or UAE. And the reason that they're doing that is that India has dramatically increased its purchases of cheap Russian oil, but they've struggled with how to actually pay for it. And that's because they want to avoid Western sanctions, and that means that they can't or they're reluctant to use the U.S. dollar. So they're looking at other currencies and banking systems with an increasing number of traders in India and beyond, settling on the UAE's currency, which is called the Dural.

And the reasons that they're choosing that currency is that, first, it's a stable currency. It's matched to the movement or pegged to the U.S. dollar. Second, it holds its value because it's backed by an oil-rich country. And third, people just believe in it. They think that it and that Arab country are legitimate and will always back the value of that currency. Plus, the banking system in the UAE is allowing Russian banks to set up shop. The Financial Times is reporting that, for instance, the UAE's central bank recently granted a license to Russia's MTS bank to operate, although both parties are refusing to comment.

Well, as you can imagine, this whole development in the UAE has caught the eye of the U.S. Treasury Department. They sent its top sanctions official Brian Nelson to the UAE last week to express the U.S. government's concerns about this development. Now, I should note that this isn't the first attempt by foreign powers trying to find a way around Washington, D.C., and the U.S. dollar. In fact, many countries have tried to figure out an alternative current. for decades. But because of the war in Ukraine, and frankly, the perception of America's weakening position in the world, players in the global economy are making ever more bold moves to embrace some sort of new reserve currency. As but one example, Saudi Arabia recently announced that it would accept a limited amount of oil trade in China's currency, or the remand-be. Or consider

this, Russia is now selling an increasing amount of its oil to Beijing. using China's currency too. In other words, folks, China is rising and so too is their currency. So those are the facts in the data this morning in this world of international intrigue and high finance. And folks, it could really impact you here in America and beyond. So let me now offer up my opinion and analysis of what's happening and why it matters. So when the U.S. and Europe slapped those economic sanctions on Russia and then largely froze them out of the international, banking system using dollars and euro. Well, no matter how righteous that you might think that

might have been, a lot of other countries took notice. And that's because nobody wants to be Russia right now, scrambling out in the cold financially because Washington or London or Berlin have decided you're on a naughty boy list and you can't play with their system of dollars and euros. And what we're seeing is that from Saudi Arabia to China, all the way down to other countries in South America, they're figuring that out too. actually in Argentina and Brazil and late January, the leaders of those two countries announced that they were looking into forming a common currency

to avoid the U.S. dollar. Now, economists are laughing that idea off, some reasons for that, but the bottom line is that they and other countries around the world are very anxious about what's happening. This war in Ukraine has made them realize that if the West can do this to Russia at this scale, well, they can do it to them too.

So, yeah, the world. is adapting and changing. And that means that the U.S. dollar's supremacy as the world's currency is now at risk. In fact, in a way that it hasn't been in decades or ever. And folks, if we lose that status, well, we lose power, financial and political. Now, to be clear, I don't know which way this will ultimately go, but what is happening in an unmistakable way is that this war in Ukraine is increasingly changing the way the folks do business globally, as we talked about from Indian oil buyers to Saudi Shakes and even friends in South America. And yes, eventually it will creep all the way to Uwagadugu too, which, by the way, thank you for your service as president this

morning. It was very helpful. Well done. By the way, I love what you've done with the place. Beautiful. And with that, ladies and gentlemen, we conclude your morning brief. But I've got one more thing. before I let you go. We'll be right back. Welcome back to the PDB folks. I've got one more thing before I let you go. Lance in Starkville, Mississippi, wrote him, asking if I caught something that Joe Biden mentioned in the state of the union address, he thought it was quite strange. Hey, Brian, did you hear Biden say that we need oil for 10 more years or probably longer? Seems like he's singing a different tune that's not as dirty green as he usually does.

Well, yes, Lance, I did hear that. But it's actually a lot more interesting than what it first appears to be. And here's why. When the White House released his prepared remarks, here's what he was supposed to say. Quote, you may have noticed that big oil just reported record profits. Last year, they made $200 billion in the midst of a global energy crisis. It's outrageous. They invested too little of that profit to increase domestic production and keep gas prices down.

Instead, they used those record profits to buy back their own. own stock and reward their CEOs and shareholders, end quote. Okay, no big surprise there. That's long been his argument, no matter if it was accurate, but regardless, the point is Mr. Biden then went off script. All right. So here's what he added to his actual speech during the State of the Union, of course, on the fly. Quote, by the way, oil executives told me, we're afraid you're going to shut down all the oil wells and all the oil refineries anyway. So why should, you? Why should you? You're should we invest in them? And I told them, we're going to need oil for at least another decade and beyond that, end quote. Uh-oh. Well, the green people, we're not happy to hear that. And if you

listen to the speech, God bless you. You heard the audience groan and boo, especially his fellow Democrats. But folks, he's right. His slip-up was honest. Oil and gas and other petroleum products aren't going anywhere for decades to come. But it does raise the question, what exactly does Joe Biden believe? Because on one hand, he's spending hundreds of billions in taxpayer dollars to put up solar and wind and battery supply chains. And as you know, he has repeatedly said that he wants the oil and gas industry bankrupt. And yet, on the other hand, he says the quiet part out loud, at least of that recent speech, that yes, we need oil and gas. And of course, why do we need that stuff? Well, here's the part that he hasn't said, right? Solar panels and wind turbines do not produce energy.

They only harvest it. And sometimes you have a good harvest, you know, with good sunshine and good winds. But sometimes you don't. And in those bad years, that's why we need oil and natural gas. It's reliable energy. In other words, Lance, despite massive subsidy, and sort of frothy coverage of dirty green energy. The dirty truth is that the renewable industry is not game-ready to power a global economy on its own. Now, maybe we're going to have more technological innovations like that wind blade story that I mentioned earlier.

But not right now. And it's nice to hear Mr. Biden say it, even if it was one of his many gaffes that he told of the night. And that, ladies and gentlemen, concludes your morning brief. As always, we close out the show, reminding each other of why we are here talking about our country and our world it's the creed of every good spy and every smart american it's from john chapter eight verse 32 and you shall know the truth and the truth

shall make you free good day