5-2-25 - 7am - DOGE & Government Accounting and Mineral Deal

Episode Transcript

Speaker 1 (00:00):
Hey, Michael and Dragon, I think OURFK Junior should also
bring back the Presidential Physical Fitness Award ticket kids really
striving for that excellence in HOWTHI fitness have a great day.

Speaker 2 (00:15):
So there are a lot of reports coming out now
about Doge and actually a lot of peripheral stories about
Doze too, particularly about Elon Musk. You know, the rumors
that Tesla was looking for a new CEO because they're
fed up with what was going on, and you know
how he's kind of disappeared from sight right now, all

(00:36):
of which I think is fine as long as Doge
continues to keep digging, Because as long as Doge can
continues to keep digging, because we're way off now. Did
I think that I hope, Yes, I hoped. Did I
think that they could identify one or two trillion dollars

(00:59):
of waste and abuse? Yeah? Over time, but not within
you know, sixty days or even six months. But it's
going to have to be a continuing effort to do
so because there there are so many rules and regulations

(01:20):
that the cabinet departments and agencies have to comply with
that finding where that money is, you know, for example,
and this is just off the top of my head,
so it may not be entirely accurate. Is that as
payments are issued from the Treasury, they're supposed to be

(01:42):
the equivalent of a memo like you used to write
on checks, like what's this for? You know, the invoice number? Uh,
and that even that wasn't being done. Treasury would just
receive a notification and electronic noification from say Homeland Security

(02:03):
to pay you know X company under X cont probably
not even that. I'm probably giving more detail than even
Treasure you would get. But just pay X y Z
company four point five million dollars and you know, pay
it by such and such date, and that was it,
and Treasury we just automatically pay that. Well then then

(02:27):
then imagine that we still write checks even though it's
all you know, like EFTs electronic fund transfers. But imagine
a check register a ledger and it had all the
transactions of the country. But imagine that, like, I mean,

(02:51):
I don't keep it check register anymore. I keep it
all electronic. But I know I've looked. For example, I'll
pick up my mom for a moment. I've looked at hers.
Now look at her as electronically. But when i've seen
her or you know, been with her, she will you know,
pull her check register out and show it to me,

(03:13):
and I'll see gaps and I'll be like, well, you
know what, because I can probably figure out what it was,
but I don't know that she hasn't written it down
in her check register. Well, imagine a register like my mom's,
where sometimes things are written down, sometimes things aren't of
the country of an entire nation, and that country's legister

(03:38):
ledger has gaps and no missions, and the gaps are
something that like, consider myself as an auditor of my
mom's checking account. Well, if if I have nothing that
I can probe or that a citizen could question or
that anybody could ask you about the cutgister, is that

(04:02):
done on purpose? Well, that's the reality. That's the reality
of this country's ledger. There's the Statement of Federal Financial
Accounting Standards fifty six. Statement of Federal Financial Accounting Standards
s FFAs number fifty six came about in twenty eighteen,

(04:26):
and oh, good intentions, but you know, we got too
many good intentions as opposed to you know, real policies.
And the purpose was to shield classified operations from hostile eyes.
Kind of a early cybersecurity effort to keep anybody from

(04:46):
hacking in not necessarily to change things, but to see
things well. Over time, over the past seven years, that's
gotten to the point where it now threatens actual transparency
and public accountability that you and I need in order
to sustain the republic. Federal agencies are allowed now no,

(05:08):
they didn't say the intel community. Federal agencies are all
allowed to use s FFAs fifty six to hide spending
that they want to be And I use air quotes
here classified not just from you, but from Congress and
even from the President of the United States. So let's

(05:32):
dive into a little bit about the Federal Accounting Standards
Advisory Board and Rule number fifty six. It's not a
statue passed by Congress. It's just a rule promulgated by
this board, this advisory Board, and it permits any federal
agency to modify its financial statements in order to obscure

(05:53):
what the agency determines is sensitive national security information, not
classified sensitive information. Not for those of you that are
familiar with the classifications that sensitive can be a classification.
But this is not used in that technical sense. This

(06:16):
is being used in a much broader generic sense of
anything that somebody, you know, the chief financial officer FEMA
might look at and say, well, you know, that's kind
of sensitive and kind of touches on national security. So
I'm going to classify that under f FAS fifty six.
So it extends beyond My point is it extends beyond

(06:38):
the obvious domains of the intelligence community or the Defense Department.
It allows every department that produces any sort of general
purpose federal financial report to use this rule. Now, the
theory is it's going to safeguard or prevent enemies from

(06:59):
exploiting financial disclosures to learn state secrets. But what does
it really do. It creates a black hole into which
billions of taxpayer dollars vanish without a trace under this rule.
I'm just gonna refer to it instead of FFAs fifty six.
I'm just going to refer to as rule fifty six.
An agency like FEMA or any other agency. I mean, again,

(07:23):
I went to say this is any agency does that.
It's not necessarily the CIA, the DEIA, or this, you know,
the NSA. Any agencies can alter their financial reports by removing,
by aggregating, or even fabricating information provided that they don't
materially affect the reported net results, meaning that you can

(07:44):
obfuscate everything as long as the number itself is correct,
but you really can't trace back what it's really for.
They can exclude entire sub entries from a report and
then consolidate it somewhere else, making an not merely the amounts,
but the organizational structure of the financial document itself. So

(08:07):
neither the public nor Congress is afforded any right to
know when those modifications occur, how often they occur, or
the reason for them to occur. A general but nonspecific
disclaimer is enough buried in the back pages of whatever
agency report is disclosing their financial data. Even Congress itself

(08:32):
can be kept in the dark, and less an agency,
by its own volition, designs and decides to disclose the concealment.
So Rule fifty six effectively moves the Congress's constitutional power
of the purse from oversight. It creates a legal purgatory,
so you can appropriate funds for one purpose, redirect them

(08:55):
for another purpose, and then hide it all together from
elected representatives. Now, back in the day, back in my day, Congressman,
send me an appropriation and it would be a very
broad appropriation, and so I would have discretion within that
broad appropriation. Let's just say it was a billion dollar appropriation.

(09:16):
I could within that single billion dollar appropriation that was
for let's say individual assistance money that would go to
individuals in a disaster. Well maybe I would. Now I
never did this, but I'm just giving giving as an example.
Maybe I wanted instead to take part of that billion

(09:38):
dollars that was supposed to go to individuals and go
out and hire one of the consulting firms. I want
to go out and hire Rand or you know, any
of the other big consultant, you know, the big consulting firms,
and ask them to figure out a new se system

(10:00):
by which to deliver money to individuals. Well, that's not
really taking the money as technically intended, like actually putting
money in the hands of an American citizen and a disaster.
But I'm using it for the purpose to facilitate that. Well,
if I wanted to, I could use real fifty six

(10:22):
to hide that all together, and Congress would never know.
They would just take, oh, he took a billion dollars,
and we took a billion dollars, and we put that
in the hands of individuals in disaster zones around the country,
when in fact I really didn't do that at all.
So whatever protection that Congress might have on the Oversight
Committee to protect against abuse, the internal controls, the audits,

(10:47):
the classified oversight, even the Inspectors General, no, that would
all be vaporized. Now, those that argue for this rule
say that without being able to use those protections, then
our enemies could piece together all this vital intelligence from

(11:07):
just innocent looking financial entries. But the ingenuity of our
foes I don't think can justify the abandonment of full
disclosure of what we're spending money on unless it is
truly within Say, well, let's just take the White House

(11:28):
as an example. If if it's funds directed toward the
National Security Council, or it's funds directed toward the let's say,
the CIA or the d NI or the nssay, then yes,
I'm all for keeping that disclosed and only subject to
Congressional oversight. In secure facilities to a limited number of

(11:52):
people who are designated as the representatives for an oversight committee,
or maybe just for the oversight committee writ large to
see those figures. But FEMA or commerce, or AG or
HHS for that matter, we just talked about. So what
it does It inverts the burden. The concealment becomes the

(12:14):
default action, and accountability becomes the exception. So you might
as well argue that because a handful of bank robbers
are out there somewhere, then everybody, every citizen, must must
from now on veil their account balances from scrutiny because
somebody might rob a bank, and of course we're robbing

(12:35):
the bank. Get into the you know, into computer system
and see how much money you have. It's absurd, and
it's been abused before, and it gives us insight into
some of the lessons that we should have learned when

(12:57):
when this government assumes the power of secret spending, the
financing of the black ops during the Cold War. Sometimes
those were noble purposes, sometimes they weren't. Abuses proliferated the
Iran contra affair that showed how a what I believe

(13:18):
to be a noble motive gave way to clandestine mischief
when the oversight was thwarted. And now this same rule
today institutionalizes a structure that is far broader and more
opaque than anything that Oliver North ever thought he could
have dreamed of. Under Rule fifty six, DLD can give

(13:45):
very high dollar contracts to politically connected firms and conceal
both the recipient and the amount from public view. USAID,
I think, is the classic example. They can fund controversial NGOs,
both domestically and even foreign without notifying Congress.

Speaker 1 (14:07):
With the public.

Speaker 2 (14:10):
You want to get really ten foiled hat. Agencies could
funnel money to family members of political figures under some
perverse interpretation of you know, well they've got a charity
or you know, an NGO or something, and I mean,
this would never happen, right, of course, it would happen.

(14:31):
You find out that suddenly an NNGO is getting millions
of dollars or even tens of millions of dollars, and oh,
it's run by the son or the daughter of a congressman,
or of a president, or of a federal judge or
whomever it might be. That's the kind of stuff that
rule fifty six allows to occur. Suppose USAID wanted to

(14:55):
give a billion dollars to the Clinton Foundation or to
George Soros's Open Society Foundation, and the whole purpose was
to do development in projects that were in unstable regions
of the world. Well, if they were worried that knowledge
of that grant would be politically controversial, they could construe

(15:19):
it as harmful to national security, and the head of
USAID could invoke Rule fifty six and hide the transaction completely.
No notification to the White House, no notification to the President.
Congress would be completely unaware of it. They just gave
a lump sum, which I fault to Congress as much
as I do anybody else because they allow this stuff

(15:40):
to happen. The public, journalists, watchdog groups, everybody would get stonewalled.
In fact, no, stonewall's not even the right word. They
would never even know what to look for. They would
they could, They would have to just dream up some
wild ask question to ask. But even then just asking
a question, oh well, on grounds in national security, we

(16:02):
can't tell you. Conservatives, I think rightfully skeptical of the
administrative the deep states overreach. We've long griped and complained
about the unaccountable power of these regulatory boards. In particular,

(16:28):
that's where the deep state is able to get rules
promulgated that are nearer to their benefit so that they
can do their Deep state operative operations without any oversight
by Congress, but even worse, without even any knowledge or
acknowledgment or notification to the President or to the White

(16:50):
House or to the offer. And when I say the
President or the White House, I technically mean the Office
of Management and Budget about what they're doing, so OMBS
over here, if they wanted to find out, they would
have to go into every single agency, and they don't
have the manpower to do this, to every single agency
and show us every time you've invoked Rule fifty six

(17:13):
and disclose it to us, and that would lead to
a fight between the agency and OMB, and the President
would have to step in at some point because I
would hope that the Director of OMB would then go
to the go to POTUS and say, hey, USAID is
invoking Rule fifty six on money that we're trying to
find out where it really went, and they won't do it,

(17:34):
and the President would have to step in. And now
you've got a question about the I think the President
has the authority to do it, but I would bet
that USAID would would argue and maybe even go to
courts argue. Then at a Rule fifty six, we don't
have to disclose it that's how bizarrow this rule is.

(17:55):
It just strains. It's strange credual with you that we
could do anything like this. But if those wants to
really work, then they need to go find out every
place that Rule fifty six has been in vote and
demand that OMB find out what that money was.

Speaker 3 (18:18):
Mike, I never even really noticed the cameras at Kingsupers
until yesterday. I guess maybe because you guys were talking
about it and I looked up. I thought, holy craft,
there's one at every single self checkout. Blame, but I
guess welcome to our world, right.

Speaker 2 (18:36):
Somebody said I think on the text line yesterday too
that if I really want to see security cameras, walk
around the wine section where they sell alcohol, and there's
cameras everywhere there because I guess all of the drunks.
You know, I saw a really sad thing which just

(18:56):
reminded me when I was at King Supers the other day.
I was telling you that story about it dragged him.
When I when I walked out to put the stuff
in the car before I walked over to Crumble Cookie,
a guy came. I noticed the car next to me
was running, and so I just I looked in to
see if there was, like, you know, a kid or
a dog or anything in the car. Just curious and

(19:21):
as I from the time it took me to look
at the car, walked the fifty feet or so to
crumble cookie him back.

Speaker 4 (19:32):
Uh.

Speaker 2 (19:32):
The guy came out of the liquor store cars running,
has a not a mini bottle, not a mini bottle
of what looked to be like bourbon or something, but
but not a regular size bottle, like almost like a
in whin I'd say it was like a half craft
or whatever, Okay, and took it out of the of

(19:56):
the bag as he opened the door. So he's opening
the door and taking me out of the back all
kind of simultaneously, and sits down, sits down behind the
steering wheel, throws the bag, appears to throw the brown
paper bag over to the side, proceeds to open the
bottle and takes a couple of big swigs out of it,

(20:19):
and then drives off, goes about his business, goes about
his business, and I'm thinking, I thought my life sucked.
Holy cow, I said, is that dragon? Is that you?
Is that you?

Speaker 1 (20:35):
Uh?

Speaker 2 (20:36):
I played for you yesterday. Secretary of the Treasury Scott
Besince Bssence his announcement about the mineral deal with Ukraine. Well,
let's go through it a little bit, because I've read
through the text and it's kind of fascinating. The mineral

(20:57):
deal does not include secure security guarantees, but it does.
It actually outlines the creation of a joint investment fund
between Ukraine and the United States. Now again, according to
the text, we will manage the fund and the income
will be derived from Ukraine's mineral resources. So it covers

(21:21):
several strategic resources. Titanium which is obviously used in construction
and aircraft, uranium obviously from nuclear power and weapons, Lithium,
a vital component of evs, and of course consume all
of our consumer electronics, the batteries in our consumer electronics. Well,
Ukraine has succeeded in removing a condition that would have

(21:45):
labeled previous USAID everything that we've done up to now
as debt requiring repayment via the mineral wealth. Now that
aspect of the agreement is best as I can tell,
some sort of compromise to avoid embarrassment for the Ukrainian government.

(22:07):
So you may remember the originals. I shouldn't say it
was the original deal but Trump would conflate and say,
if we want to get this mineral deal done, because
we've given you know, billions of dollars to Ukraine and
while Europe has given you know, much much less. Whatever
your given doesn't mean any difference. But he was really

(22:28):
pissed off because Europe got some kind of loan agreement,
some kind of security agreement of some sort that Ukraine
would pay back the dollar value of whatever it was
that the European countries are given to Ukraine. Well, we
didn't get it. Get that. The key though, to this

(22:50):
deal seems to be to potential to foster potential US
interests in Ukraine and then align our government strategic goals
with well, I guess you could say the fate of
Ukraine itself. It maintains the opportunity for Ukraine to join

(23:14):
the EU, not NATO. The EU, so that keeps at
least one essential pathway to Ukraine to integrate into the
West open potential NATO membership. NATO membership elusive. It's not
supported by the President and doesn't appear to be anywhere

(23:36):
in there at all. So it seems that it just
creates this joint investment fund to aimed at rebuilding Ukraine,
expanding the ability to mind and extract critical resources like
these rare earth minerals, and any sort of contribution to

(23:57):
the fund will partially come in the form of future
military aid, which I read to mean that we're not
going to cut them off. It doesn't specify at what
level we will continue to give, but it just it
says that contribution to the fund will partially come in

(24:19):
the form of future military aid, but there are no
military security guarantees. So there you have it. That's pretty
much in a nutshell. The only thing that's in it
that I think is any consequence. Speaking of things across

(24:40):
the pond, the Mercedes Benz is set to expand it's
manufacturing operations in the United States. One more example of
Trump saying when he talks about the trillions of dollars
that are coming here, huh. Mercedes Benz decided they're going
to produce additional vehicle at its facilities in Tuscaloosa, Alabama.

(25:04):
So as all of this stuff is going on with
the Trump administration and their emphasis on boasting American manufacturing,
trying to urge automakers to enhance their domestic production efforts
in order to as he always says, you know, make
a mire you you don't pay any tariffs. Mercedes Benz
North America CEO said this, we are getting even closer

(25:27):
to the US customer by localizing a core segment model
in Tuscalusa, strengthening our ties to the North American market,
where range of Mercedes Benz vehicles, including the gl and
the GLS models have their roots. So it kind of
seems that that decision aligns with can some other shifts
going on in the auto industry towards on sharing their production.

(25:53):
Even BMW's contemplating increasing its workforce in South Carolina by
adding additional shifts. Handa is going to transfer production of
the Civic from Japan to the United States, and Hyundai
has announced a twenty billion dollar investment to strengthen their
American production capabilities, including a brand new So I think

(26:14):
this is more significant than just I mean, don't get
me wrong. Adding an additional shift moving production from one
country to another, that's all great. But Hyundai, in addition
to twenty billion dollars, is actually going to build a
new five point eight billion dollars steel plant in Louisiana,
which will aid in their goal of localizing their production,

(26:36):
and I wonder why they want to localized production, oh
to avoid tariffs. Kia in collaboration with Hyundai, they want
to manufacture hybrid vehicles in Georgia. Not evs, but hybrids.
Nissans thinking about moving production from Mexico to the United States.
Salansis makes jeeps. They're set to restart its Belvedere, Illinois

(26:58):
plant to produce a mid size pickup, and Toyota intends
to increase hybrid again hybrid but not evy their production
at a West Virginia facility. And then Serious XM. Yeah,
I don't know why, because I don't think I may
I may be wrong because I don't. I mean, I

(27:19):
have serious XM, but I don't ever think about using
it when I've been overseas. I don't think. Can you
get serious XM in Canada? Why not? I'm not. I
don't think you can.

Speaker 4 (27:30):
I know you can.

Speaker 2 (27:31):
I know, I don't think you can get it overseas.
I don't know why you couldn't know. Well, because the
satellites are are which is a geosynchronous where they stay
in one place.

Speaker 5 (27:40):
Right, they're directional, So if you're pointing at the America's
you're pointing at the entire Americas.

Speaker 2 (27:46):
Right, But I don't think it's available.

Speaker 5 (27:49):
It's not like it's only it stops at the border
and goes no, no, no, no.

Speaker 2 (27:52):
Further, I think I think it's pretty close though. Yeah,
let's let's let's google that in the minute, see what
we can find out. But anyway, I find this interesting
because Serious XM told their investors on their earnings call
yesterday that it does not anticipate tariffs to impact the
company's revenue. Now, I tried to figure out why would

(28:18):
why would that affect Why would tariffs affect their revenue?
The only thing I could come up with is that
Serious ExM is obviously very reliant on new car sales
to try to build their subscriber base, so holding installation
agreements with most US automakers. Maybe that's why I just
found it interesting that, because I'm a shareholder of SERIOUSXM,

(28:39):
I just found it interesting that on the earnings transcript
that I was reading that they made sure that everybody
knew tariffs aren't going to affect us whatsoever.

Speaker 5 (28:47):
According to the Serious XM website, SERIOUSXM provides service in
the fifty United States, the district of Columbia and Puerto Rico.
If you reside in Canada, Serious XM service is available
through Serious XM Canada.

Speaker 2 (29:00):
Oh okay, but what about overseas, anything overseas. I didn't
see anything like that. Okay, all right, Well anyway, So anyway,
the point is all of this stuff that everybody's screaming
about on the tariffs, at least companies are responding. And
I'll just casually mention this right now. I me get
into it in more depth later. China has said kind

(29:25):
of just very quietly, without any sort of fanfare, why
there's I see no harm in talking to the United States.
I'd say for a communist country to finally admit that,
you know, hey, we're not budgeing, we're not going to
do anything, to finally say, well, you know, probably no
harm in at least having a conversation. Huh. Maybe China is,

(29:49):
as I keep trying to tell you, in much worse
shape than anybody wants to admit.

Speaker 4 (29:55):
There's somebody in our neighborhood that has a problem. They
are always lea being their little empty shooter bottles of
booze along the street next to our house. Because our
street is a main street, that goes through the neighborhood,
but they must pull over and like empty out their
stash or slam a few back.

Speaker 1 (30:15):
I was just a Paul.

Speaker 2 (30:16):
I mean, I you know, I don't really think about
drunk drivers. I'd never been affected by one, so maybe
I'm just being ignorant of it. But I know it's
a problem. But I never witnessed like, wow, yep, you
just did that. What I didn't do was follow him

(30:39):
or or really watched to see how well he was
able to get to navigate the parking lot and get
out of the parking lot. Yeah. I was just too
busy smelling my crumbled cookie to care. You were preoccupied. Yeah,
we each have our own addictions. So so I mentioned yesterday.
Yesterday was May first up. Duh uh. But don't forget

(31:00):
that socialists and communist groups they all embraced May Day
because that was their symbol of class struggle and solidarity,
and of course they used it to advocate for workers' rights,
economic equality, all these anti capitalist ideas. And then, particularly
during the twentieth century, I would say it became a

(31:21):
prominent holiday in socialist and communist countries, and there were
you know, large state organized parades like in the old
Soviet Union in China. But it has a strong association
with those ideologies and it stemmed from that focus on
labor rights, collective action, the core tenants of communism and socialism.

(31:41):
And while you know, like during the Cold War, Eisenhower
and others tried to make May Day more like I
think he called it loyal Day, loyal Day or something
like that, but it's rooted in the labor movement, and
it's rooted in socialism and communism. Well why do I

(32:02):
mention that, because yesterday Bernie the millionaire an AOC that
wants to be a millionaire. We're out in one of
their little campaign stops again and AOC we here together.

Speaker 6 (32:18):
United to see that the billionaire quests should be afraid
of the power of labor and every day workers across
the country.

Speaker 2 (32:30):
So she's celebrating May Day like a good socialist or
communist would or should I I guess I would say, Well,
Mark Theeeson, I don't know where he was, but he
kind of mocked it, I thought, very appropriately. By today's
May second.

Speaker 3 (32:48):
Yesterday was May first, it is May Day, and we
found Bernie and AOC in Philadelphia at the may Day rally.

Speaker 2 (32:53):
There. Give this a look. Here. Watch.

Speaker 5 (32:56):
I'm not going to tell you that the struggle in
front of us is easy. The oligarchs own the economy,
they own the media, they own.

Speaker 2 (33:07):
The political process. That's the reality.

Speaker 6 (33:10):
Here together united to say that the billionaire class should
be afraid of the power of labor and everything workers
across the country.

Speaker 2 (33:23):
Oh, Mark, I was watching that. Are they getting anywhere?

Speaker 5 (33:26):
Are they building a grass roots organization from these appearances?

Speaker 2 (33:32):
Yeah?

Speaker 3 (33:32):
I was waiting for her to scream Workers of the
World of unite.

Speaker 2 (33:36):
This is you know, the first I'm surprised she didn't
Workers of the World unit. Just go ahead and go
all the way, baby, Come on, just just go all
the way. Workers of the World unite. And in so
far as Bernie upset that the oligarchs own the media,
well that's kind of fascinating to me because the oligarchs

(33:56):
that own the media all seem to be left center
and certainly are predominantly with maybe the exception of Fox
and a couple of others, are certainly anti Trump, anti conservatism,
and anti libertarianism. So those all of Dark City bitches
about they're all a bunch of lefties