Windrock Wealth Management’s Chris Casey joins Trey Reik to deliver a stark warning: the new budget bill is being dangerously misunderstood, and it could unleash a fiscal and market crisis. With U.S. debt surpassing $37 trillion and deficits exceeding $2 trillion, Casey explains why 2025 may be the year the financial reckoning finally goes mainstream, and how investors may be blindsided by a triple threat: rising interest rates, a looming recession, and inflation.
Key takeaways:
- Why the new tax bill worsens debt and misses spending reform
- What happens when markets realize the U.S. can’t repay its debt
- Why 2025 could trigger a surge in interest rates
- How gold, silver, and crypto may protect you
- The danger of trusting government forecasts
Get a free portfolio review from Chris Casey at https://bit.ly/4kOMblh
Get to Know Chris Casey: His Journey, Strategy, and Financial Philosophy: https://www.youtube.com/watch?v=l2DdcqtoBYs
Hard Assets Alliance – The Best Way to Invest in Gold and Silver: https://www.hardassetsalliance.com/?aff=WTH
Chris Casey 0:00
Anyone with half a brain looking at, you know, the fundamentals of the situation, realizes we’re in a fiscal crisis. They’re spending hogs. That’s what they are, and that’s what’s continuing under this bill. There’s no way to ever pay this back without serious pain, which they won’t do, or with a de facto default, where they just inflate the currency.
Trey Reik 0:22
You Greetings and welcome to our wealthion show. My name is Trey Reich of Bristol Gold Group, and we’re here today with Chris Casey, Founder and Managing Director of wind rock Wealth Management in Naperville, Illinois. And many wealthion Viewers will recognize Winrock as one of wealthions vetted investment advisors, and we thank Chris and his team for the work they continue to perform for the benefit of wealthion viewers. Chris, thanks for taking the time to visit with us today.
Chris Casey 0:55
Hey, Trey, how you doing good
Trey Reik 0:59
amid this flurry of headlines these days of Iran and Israel and Ukraine and tariffs, we’re going to focus today on, I think, an aspect of the investment landscape which may be escaping common consideration, And that is President Trump’s one big, beautiful tax bill. We have a house version, which is, you know, currently out of the House and the Senate is studying it for its recommendations and changes. But I think it’s fair to say that with all the front page distractions, consensus may be underestimating the investment impacts of the bill. Would you agree? I
Chris Casey 1:47
agree, and frankly, I think we talking about it a lot more, but for these other major geopolitical events going on, because I do think it’s it’s big news. It has a major impact, and I think it’s vastly misunderstood right now, what is going on and what is not
Trey Reik 2:04
so. Just for posterity, how would you compare the current house bill with President Trump’s campaign promises and Doge? Well,
Chris Casey 2:15
they’re not really comparable at all. First of all, if I was a Congressman, I wouldn’t even read these bills, and a lot of them don’t, obviously, but because I think I found out a shortcut to figure out what’s in a bill. Basically, whatever the headline or the title of the bill is, it means the exact opposite. So the one big, beautiful bill, it’s actually not one bill. It is one bill, but in the sense of it’s going to be one of, effectively 13 that’ll have to be passed for next year’s budget. It’s certainly not beautiful. It’s quite ugly. There’s a lot of detrimental things in there as relates to spending, and it’s not that big on a relative basis. And maybe I should just digress for a second and talk about what it is and what is not is what they call a reconciliation bill, which means it has an expedited process. It’s not subject to filibuster in the Senate, so the passage is much more likely than just a normal bill. It’s also primarily dealing with mandatory spending, not discretionary spending. Now, that’s great. I mean, that’s where you need to start, right to get the budget under control. But the reality is, it’s not touching defense. It’s not touching 12 different appropriation bills that’ll be passed later on, that deal with discretionary spending. So there’s some things. You know, it’s commonly misunderstood that it’s going to do a lot of things, but reality is, it’s not big, it’s not beautiful. It’s not going to be one bill, and if anything, it’s going to make things worse from a debt perspective.
Trey Reik 3:43
So if you were going to sort of rank components, how would you describe the most important components of the bill as currently constructed?
Chris Casey 3:54
Well, I think the continuation of the 2017 Jobs Act is a big deal. Whether it’s the opportunity zones or it’s just tax breaks, et cetera, that’s great. Tax breaks we should all be in favor of, pretty much all the time. If you give a tax break for eyeglasses, you know, I’d be in favor of it, even though it’s gonna cause misallocations in the economy, right? People are gonna start buying glass if they don’t really need to. But anything that reduces the burden of government at this point in time, because it’s so overwhelming, is beneficial. So that’s a good thing. What it’s doing, it’s also, you know, they’re talking about cutting taxes on tips and social security, all that kind of stuff, all good things. What it doesn’t do, though, it doesn’t go far enough in restricting spending. There’s a lot of controversy on this, because, you know, they’re talking about cutting spending years from now. Well, we’ve seen how that plays out. We saw that played out with Clinton, with Bush, etc. They’re always promising down the road, there’ll be tax cuts. It’s almost like, you know, if someone deals with an addict, you know, I’m going to quit tomorrow. I’m going to drink today, but tomorrow I’m going to stop. Up, right? They’re spending holics. That’s what they are, and that’s what’s continuing under this bill. And so just put some numbers to it. Last year, fiscal year, the fiscal year for the federal government, and September 30, they spent, let’s call it $6.1 trillion this year. September 30, 2025 it’s going to probably come in around 6.8 next year, which is what this bill is dealing with. You’re probably looking at 7.3 trillion when it’s all said and done. So you’re increasing your if anything, you’re reducing the rate of increase. But that doesn’t do anything to the debt, but make it continually worse, just at a slower pace.
Maggie Lake 5:37
If you have any questions about how to navigate the current environment, wealthion can help connect you with a vetted advisor to get a free portfolio review, just click the link in the description below or head to wealthion.com/free there’s no obligation, and it will just take a few minutes of your time. Again, that’s wealthion.com/free thanks so much for joining us.
Trey Reik 5:56
So what, what do you think the long term market impacts are for making the 2017 Trump tax cuts permanent? Well, I
Chris Casey 6:08
think it’s been pretty widely reported. First of all, I would discount anything from the Congressional Budget Office or a lot of these other government agencies that weigh in on its real impact on the deficits, etc. Because reality is, they use faulty models. They use these static models that don’t take into account other variables, right? It’s, it’s very binary. You cut spending or you decrease taxes, this is what happens, right? And it’s, it’s not the reality. You have increased economic activity, of growth, etc. So they’re, they’re pretty bad, but the reality is, it will increase the deficit, which is at a time when we already had a 2.1 trillion deficit last year, right? In this century, in my lifetime, the only time we’ve had trillion dollar deficits was during war or during a so called National Emergency, right? So we’ve never had that before, and now it’s just regular. No one seems to care. It’s another 2 trillion. So the spending will continue pretty much unabated, in my mind,
Trey Reik 7:06
and will the increase in the deficit of three and a half trillion to 5 trillion, whatever it turns out to be, over the next 10 years? Will that adjust your risk models in terms of how you look at the economy
Chris Casey 7:22
of wind rock, I think it impacts. I think every investor should look at it as having an impact through interest rates. And I’ve been saying this for probably a year now on wealthion, primarily, and just saying, like, Listen 2025 I think, is the year where the fiscal reality becomes discussed in mainstream media. So anyone with half a brain looking at, you know, the fundamentals of the situation realizes we’re in a fiscal crisis, not just from a year to year basis, but when you have, you know, $37 trillion in debt, and you’re taking in, let’s call it 5 trillion. It’s never going to be repaid. I mean, everyone knows this, and now you’re starting to see it reported. You started seeing it with Rand Paul, with his opposition to the one big, beautiful Bill act. You saw it with Thomas Massie, the congressman of Kentucky. You’ve seen with Elon Musk, when he had the falling out with Trump. People are starting to talk about it. And now, because Trump’s in office, you have what I would call a liberally inclined media that’s going to pick up on this more and more so by the end of the year, I think it’s going to be on the cover of Newsweek and veterans, you know fiscal calamity, fiscal crisis. You know debt death, wherever their debt spiral, whatever they’re going to call it. This is the year that people really start waking up and realizing when that happens, I think interest rates really spike. And I always compare it to, I believe it was September 2022, when the United Kingdom, their Chancellor, the sketcher, came out with a new budget resolution, or new budget and he thought it was going to be pro growth. Hey, this is great, just like this bill, right? The big, beautiful bill. And what happened was the market, the bond market, really, for lack of better term puked. They saw that, and they ran away. They realized United Kingdom can never pay back what they call gilts. It’s for long term bonds. And so their 30 year bond effectively rose by about two percentage points in yield over like a four day period. So that’s going to happen here. I could see rates spiking once people start realizing the federal government’s toast. There’s no way to ever pay this back without serious pain, which they won’t do, or with a de facto default where they just inflate the currency.
Trey Reik 9:34
So I’m assuming that you when that happens, potentially that you are expecting the Fed to initiate, uh, lots of easing in terms of lower rates and QE and Scott best into Treasury may even conduct larger, you know, weekly auctions and that type of thing. But I assume you’re expecting an outside. Is policy response when that interest rate bump comes,
Chris Casey 10:04
that wouldn’t surprise me, although this time may be different. I mean, the Fed, I mean, it’s all they know how to do, and that’s all they do do is print money, right? That’s all they they can do in response to anything. But this is a situation where printing money could make things worse, because now, if you have high interest rates and you have a bad debt situation, you throw inflation on top of it. I mean, there’s very few places to run from an investment perspective, right? So that would be the normal chain of events that we have seen historically. But same thing if we have a recession, if recession starts, and I think of recession is there’s a pretty high probability of that, especially if rates start spiking later this year. If that happens, the Fed will be a little bit handcuffed. You’re not gonna be able to go back to the same playbook. So everyone buying the dip, everyone holding long term bonds, and just assuming the Fed will come in and rescue them, they may be wrong this time.
Trey Reik 10:58
So with respect to bonds, do you expect the bill itself to change your views on, you know, Munis treasuries, or corporate credit spreads?
Chris Casey 11:08
You know, we’re largely out of the bond markets across the board. I mean, I’m not so much concerned about the nature, the asset class of the bond, meaning corporate munis, what have you I’m more concerned about the duration of the bond. What are you buying a three month, six month bond, or are you buying a 30 year bond? I would run away from the from the long term bonds. I think it’s an easy way to get hurt and hurt significantly, and focus on short term where effectively you’re not going to be hurt. And for proof of this, you can look at the 1970s right? You had the price level double over a decade long period. And by the way, everyone talks about stocks being inflation hedge, that didn’t pan out, and stocks kept pace with inflation, but they didn’t really. They still lost money in real terms, but bonds were decimated in that decade. You had roughly about a two thirds haircuts. And so that’s that should be a major concern of every investor out there
Trey Reik 12:04
and on the equity side of the ledger. If the tax bill is enacted as currently constructed, would that influence windrocks allocations in terms of sectors over the next three to five years?
Chris Casey 12:21
I would say it confirms or solidifies what we’ve already felt. We’re already pretty light on equities, primarily because of recession risk. We’re very light on bonds, too, as I mentioned, just because of or at least long dated bonds, because where I think interest rates are headed. So it really confirms, it’s just a confirming indicator of what we’ve seen coming, really, for a couple of years now.
Trey Reik 12:42
So if we’re light on equities and we’re not in bonds, where are we?
Chris Casey 12:46
I think you need to look at every alternative out there, things that are both recession proof, things that will at least weather higher interest rates and things that should do well in any kind of fiscal calamities. So any kind of, obviously, any kind of monetary substitute for us, dollar, if you’re looking at Gold, if you’re looking at cryptocurrencies, I think those are great first step reactions. Now you may get hurt initially, because if there’s a downturn, everyone gets hurt initially, but they should be the first ones to recover. So
Trey Reik 13:17
does wind rock have precious metal and crypto exposures.
Chris Casey 13:23
We’ve had crypto exposure and precious metal exposure basically since the firm was founded. We’re very early adopter of cryptocurrencies. You know, we wrote our first article in 2014 I think we had clients, some clients in it in 2013 so we’ve been early believers. We’ve always hold, held precious metals. Although I would say that, you know, we’ve increased that. We’ve increased a couple times over the last couple of years. We increased it after the Fed’s outsized response to the so called pandemic. We increased it after the banking crisis that happened in 2023 spring of 2023 we increased it, I think fairly recently, when we saw the what’s happening with the budget. So, you know, we have a healthy amount of precious metals, which I think every investor should consider doing,
Trey Reik 14:10
and we’re getting a bit off track here. But in terms of gold, since you brought it up, gold was up 27% last year. It’s up 28% this year. Do you find that surprising how steep this, you know, the climb has been, and what do you expect, you know, for the next year or so? Yeah,
Chris Casey 14:30
my answer would be yes. And no, I’m not surprised in that it’s gone up based on the macroeconomic situation. I’m surprised, I guess, in the way that it has gone up, meaning, who’s actually buying it. We, I don’t think we’ve really seen the retail buyers come in yet, and that’s so that’s a lot of potential upside right there. This has actually been done by central banks for the most part the last couple years, which is another confirming indicator that things, things may be really bad if they’re out there buying gold themselves. So, um. So I’m surprised at what it’s done. As far as where it goes from here, gold is not cheap right now, as it says today, it could be considered cheap retrospectively when you see what happens with the budget and debt over next couple years. But right now, I wouldn’t call it cheap, but I do think everyone needs to consider having a solid position in it. And as far as how high it goes, I don’t know, but because we’re kind of in uncharted territory, right? We’ve never had this situation. Us. Has never had a crisis like this, outside of maybe World War Two or civil war or something like that. So things can get can go quite a bit higher, because things budgetary wise or fiscal wise, can get quite a bit worse.
Trey Reik 15:38
I’m sure you saw this morning the World Gold Council released its annual survey of central bank intentions for 2025 and 95% of the 73 central banks they surveyed expect the total allocation to gold and FX, global FX reserves to increase over the next year. So that’s starting to become a pretty high percentage, 95%
Chris Casey 16:05
it is, I’m not sure. A lot of that, I think is political too. They may just be doing that kind of thumb their nose at Trump and saying, you know, we don’t want the US dollars. So I don’t know. I those kind of surveys, you know, I take with a grain of salt the
Trey Reik 16:16
assumptions that are being linked to the bill, you know, by budget offices, etc, of 5.2% GDP growth and 7 million jobs. Do you think the assumptions on the growth side are credible? No,
Chris Casey 16:32
I take, I put zero credence in anything these government I mean, because they’re always wrong. The CBO, Congressional Budget Office is always wrong. Federal Reserve is always wrong. You could look at them. They have projections, for instance, the Federal Reserve each year on major macroeconomic indicators, GDP, etc, and they’ll give a range, and they’ll give their their best estimate. And they’re always outside the range, like so they and they’re largely responsible for that, right? This is something that’s somewhat under, largely under their control. If something was under my control and I had to predict it, I’m pretty sure I’d be pretty close to being accurate, if not right, right? But they’re always incorrect. So no, I don’t take I don’t put any credence into it. Wouldn’t surprise me if the fiscal situation gets worse, I could completely see that. I especially given where interest rates are, because as the debt increases, as rates continue to increase, which I think they will. I mean, we’re paying right now effectively, like, 3% on debt that can easily go to five, that can easily go much higher. We had probably, effectively around 8% when I was a kid, you know, 10 years old, or something like that. That’s not unheard of, and that can happen again here in the United States, right?
Trey Reik 17:42
Is there a part of the bill that you think the market’s underestimating in terms of its impacts?
Chris Casey 17:52
Well, I think they have discounted its impact on the fiscal situation, because, again, this is one bill, right? This is dealing with the mandatory spending. Primarily, there’s going to be another 12 appropriation bills that happen. And one other point I think should be made is that this was the best chance to really this is what Musk said once he left Doge and you know, he’s off on his own, has feud with Trump. This was the best chance, and probably our last chance to rein in government spending, and they failed. So to me, that’s the biggest thing, if they spend 7.3 trillion next year to even talk about cutting spending the next year is a joke, because one Trump’s polls may go down, right? So these so called RINOs, or that wing of the Republican Party, have more influence and power. Two is that 90% of Congress is up for reelection. You got 1/3 of the Senate, and you got the whole house right. So that’s all they care about next year, is you’re going to be six months away from election time. That’s what they’re going to be focused on. So I’m very disappointed with the bill in general. I had pretty high hopes in January something was going to be implemented. And here’s the biggest disappointment, is that they had the mechanism to do it right? They had Elon come in, they had Doge, and they were made all these recommendations that was great, granted was only was called 150 billion. But the reality was they had, they couldn’t do anything because the appropriations were already made, and you can’t change the appropriations according to constitution, right? It can’t be pulled appropriate from the Treasury without a bill from Congress. They couldn’t do that. They could have implemented in this bill, but they didn’t. So I’ve really no faith that they’re going to do it in any of the future discretionary appropriation bills.
Trey Reik 19:35
So just generally, looking at it, how do you compare the current bill with either last year the current continuing
Chris Casey 19:43
resolution? Yeah, well, that’s what we are spending right now. We’re on a continuing resolution till the end of the year. We basically just took last year’s mandatory spending and just re upped it with with escalators, right? So it’s about, I think, a six to 700 billion increase alone, right? So that should have. Caused some consternation right there, that that’s what they were doing. It’s not like they didn’t have any time. This is June, right? They could have done this. They could have entered January with a bill all ready to go or almost ready to go. I’m not sure what’s taking so long. So just overall disappointed,
Trey Reik 20:14
all right? And I appreciate your reviewing this. You know, complex matter, but in summary or conclusion, how would you advise investors to respond to the next six to 12 months, given what you see as the likely outcome of the tax bill?
Chris Casey 20:34
I think investors could be in store for kind of a threats from multiple fronts. So you’re gonna, I think they should be very concerned about a recession. The the the various indicators that that predict a recession are still flashing red, and they have for a long time. That’s true for years, actually, but something you should be concerned about, I think they should be very concerned about rising interest rates. I see that very likely later this year, they should be concerned even farther down the road, eventually, about inflation, because the only response will be, even though they’re a little handcuffed. But I do see them to your point earlier, printing more money, the so called fix the situation. So I think you have a triple front, triple threat on the hands for investors, they have to be very defensive. They have to think about what does well in a crisis, what does well as a monetary substitute? They have to be very worried about counterparty risk, right? If you’re lending money to someone like the federal government, you may not get it back if it’s a 30 year bond. So I’d be concerned. There’s a lot of things to be concerned about, but there’s not a lot of safe havens
Trey Reik 21:41
for people, and when you look at precious metals specifically, because I think we both have an interest in that sector of the market. Do you have any general recommendations on what allocation to precious metals might be appropriate?
Chris Casey 21:57
Well, obviously it varies for everybody. It wouldn’t be uncommon for someone to have, you know, 10% allocation, I think, is completely reasonable. Probably more importantly, is how you hold it and what you own, right? So is it bar, is bullion coins? Is as gold? Is it silver? Is it? Where do you store it? All these things are good questions, right? So I think of anything right now, people should take a harder look at Silver versus gold. I mean that that wouldn’t own both, but maybe the allocation would be skewed towards silver, just because it hasn’t done as well as gold over the last couple of years, and maybe has a little bit more upside
Trey Reik 22:33
at this point. Right? The gold to silver ratio, I think, peaked at 106 in the cycle, and we’re down in the mid to low 90s. So do you think that is heading significantly lower? Well,
Chris Casey 22:46
that gold to silver ratio price, you know, they obviously moves around quite a bit, probably from 60 to 110 or something like that, over a course of time. But if you look at it, I mean, it’s almost like clockwork, you know, it’s, it’s always, I think makes sense. If the Gold Silver ratio is high, start looking at Silver, especially if we have a so called inflationary recession. If we have that, if it’s prolonged, I can see domain. I can see demand for silver skyrocketing while supply goes down. Because, as I’m sure a lot of your viewers know, silver is largely a byproduct of other industrial mining or precious metals. You know, byproduct of gold too, but you know, primarily, it’s by product copper, etc. And if that dries up because you have recession, well, then even if demand is going up for silver, the supply won’t necessarily meet it, because it’s it’s contingent upon other metals.
Trey Reik 23:37
And how about gold and silver equities? Are they something you dabble in at wind rock?
Chris Casey 23:43
Yeah, we certainly consider mining stocks. I mean, they’ve, right now, they’ve actually had the best of all worlds, right? Because energy, which is large cost for them, has come down significantly. You could say that. You know, obviously the revenues have gone up with where gold is at. So it’s a good time to be a mining company. However, they haven’t. They’ve performed very well year to date, not as well as I actually thought they would have. I thought they would have actually done better. So but on the other hand, people should be cautious about owning any kind of mining stocks, because at the end of the day, they are stocks. And so when the market goes down, which I think is quite likely this year, at some point a correction, or worse, people should be very concerned. We saw this in the last the lockdown period. I mean, mining stocks will get hurt and hurt significantly.
Trey Reik 24:30
You bring up general stock markets, which is obviously important to most investors. Do you have any views or expectations on the s, P’s valuation and where we might be headed from here? Yeah,
Chris Casey 24:45
well, it’s hard to think we’re going to get much higher, right? Because we’re at record highs. I mean, when you’re talking about valuation wise, and I think the best way, you know, I don’t like talking about price to earnings ratios, because what earnings are you talking about? Everyone’s got something different. Is it next year? Is it? Is it. You know, operating revenue, what are operating profits? I think price to sales is the best way to look at any kind of valuation metric. And if you look at it from that perspective, I mean, you’re really just talking about the tech bubble 1929 and we’re even passing 2008 already. So there’s not many historical comparable time periods. And the ones that are are obviously negative. So, and it should, that’s not rocket science. I mean, everyone should realize, you know, it’s the old adage, you make money when you buy the stock, when you sell it, meaning you got to buy it at the good value, you know, with plenty upside. So, yeah, I could see some, some trouble
Trey Reik 25:38
ahead. Great. So you obviously have a fairly conservative bent on the next six to 12 months, and there are lots of issues that are on your mind. For wealthion viewers who may share some of those concerns, what’s the best way for them to interact with wind rock in for example, obtain a free portfolio review or or input from your
Chris Casey 26:03
team? Yeah, we’re always happy to talk to people, I think, in the wealthion website, you know, there’s submission forms, and we’ll get back to you right away, or feel free to reach out directly. You know, we’re at It’s on our website, windrockwealth.com
Trey Reik 26:17
Perfect. Thanks very much, Chris. Appreciate your time, and we’ll check in with you in six months or so. Yeah. Thanks, Trey. Terrific. Thank you.
Maggie Lake 26:26
If you have any questions about how to navigate the current environment, wealthion can help connect you with a vetted advisor to get a free portfolio review, just click the link in the description below or head to wealthion.com/free there’s no obligation, and it will just take a few minutes of your time again. That’s wealthy again. That’s wealthion.com/free thanks so much for joining us. We’ll see you again next time you.
