Heinz CEO DIRE WARNING: People Running Out Of Money

Added: 2026-05-12

[00:00:00]The economy is certainly headed in a very dangerous direction as well.

[00:00:03]>> No question about it. Republicans right now saying bombing might have to begin once more, but the American people are obviously not on board with the war, have not been on board with the war from the beginning. And the question as to whether the American people are making up their mind on the war with accurate information is now front and center because of a new well some new reporting. There's been some significant new reporting actually on this front. Do we know how much the war is actually costing? Let's put this New York Times tear sheet up on the screen. Here's a headline. Hexath says this war has cost $25 billion. I tallied up the true amount. This is from Justin Wolfers, obviously professor of public policy uh at the University of Michigan. And Wolers wrote in the Times, quote, "The Defense Department says the conflict with Iran has cost 25 billion so far."

[00:00:53]He says, "This tally significantly understates the true cost. By my calculations, the bill for a typical American household likely runs to thousands or even tens of thousands of dollars." He says, "Yes, that's a wide range blame the economic fog of war." Uh but man, Crystal, these numbers right now uh as they become more and more pronounced and obvious uh in the media and the American people are paying more at the pump and then looking at uh exactly how much more debt we're going into to fund the war per person. Uh so it's not even just I think first and foremost for most people it's about prices increasing and what you're seeing every day on the table but then just the the long-term ramifications for your own budget uh as a as an American and American family because of this as that becomes more and more obvious. I mean let's put B2 up on the screen uh in becomes more obvious in people's everyday lives. This is the Craft Hind CEO who said in an interview this this last week, quote, they're literally running out of money at the end of the month. We're seeing negative cash flows in the lower lower income brackets where they're dipping into savings. So just about what you're already seeing uh in consumer patterns, we're what two months into this thing, two and a half months into this thing. And even if it were to hypothetically, someone waves a magic wand and today, uh, the economy is not just going to get better. It's turning the Titanic around at this point, Crystal. So, heading into the midterms, Trump is poised to lose what little support for the war he has left, uh, the more we see of this, we haven't really even seen the beginning here in the United States, or I should say, we've probably just seen the beginning, just the tip of the iceberg. Uh, this is about to get much, much worse.

[00:02:39]>> Yeah, that's absolutely the case. And Americans famously, you know, already don't have a lot of savings, don't have a lot of margin for error. So when you have the spectre of gas prices going up and up and up day after day, week after week after week with no end in sight, you know, people in elites in DC, policy makers, they may not be feeling the pinch yet, but I can promise you, I can promise you ordinary Americans, for them it's already a crisis. And that's what you see reflected there in the comments from the Croftind CEO. I always pay very close attention to those things. You know, we've covered before McDonald's CEO saying, "Hey, you know, people are just skipping breakfast now." And not that we're celebrating people getting breakfast from McDonald's, although I am personally a big McGr Riddle fan, but we'll put that aside. But >> when people are just saying, "I I'm just not doing this at all." That's a very dire sign. Um, I wanted to go back just briefly to that that estimate from Justin Wolfers because I think it's so significant. He says, "Not only does the cost directly to each American family total in the thousands to tens of thousands of dollars, but when you look at the total cost of this war, and you factor in, as you said, the increase in the cost to service our debt, which has already gone up significantly, when you factor in new disability benefits and mental health problems for veterans who are serving, god forbid, if we do go in some sort of a ground invasion, those sorts of costs are going to escalate.

[00:04:05]when you think about repairing all the damages of those bases that have been obliterated, destroyed, if we even decide we're going to go back in there and fix them and and you know, take up those positions in the region again, which I think is a big question. But those are huge, huge costs. Then you think about the economic cost dayto-day of the oil markets, the gas prices going up, the way that fuels inflation, and he says 25 billion is an insane lowball.

[00:04:32]This is his quote. The best any economist can do right now is get the order of magnitude right. And my math suggests the Iran war will cost hundreds of billions of dollars and very possibly trillions trillions of dollars for this folly for this you know so far 40-day and counting folly. He says war is hell and hell comes with a hefty price tag.

[00:04:55]So that is what this president has signed us up for.

[00:04:58]>> Yeah. And I also wanted to go back to Wolfers just on another point uh about what's happening in the markets. So uh before we go back to Wolfers, let's put up this next tear sheet. This is before uh this is a quote from a Financial Times article.

[00:05:11]>> Yeah. Where the you have a a banker speaking anonymously to FT saying, quote, "Does anyone really care if the straight of Hormuz is open?" Now, >> oh my god.

[00:05:19]>> In the Wolfers article, uh he writes, quote, Wall Street is worried despite the market touching new highs. Every time the president takes a more belligerent stance, stocks tank, suggesting that investors think this conflict will undermine the value of leading US companies. My estimate based on the movement of oil prices along with the S&P 500 is that stocks are about 5% lower than they otherwise would be, suggesting that the war has wiped out about three trillion off $3 trillion off the value of these companies. and Crystal, the contrast between Wolfers, I think, reading what's happened in Wall Street pretty accurately and one banker uh just talking about how Wall Street is riding this AI boom for now, for now uh is pretty interesting because it kind of depends on your vantage point. If you're like if you're worried about the market as a whole uh or what it means for average Americans or what it means for your returns, I guess you're probably thinking of this word differently depending on uh that vantage point because if you're cool to just coast off of the AI boom uh as opposed to being like an average American who really does have to worry about what's happening in the S&P 500, that is a pretty different vantage point.

[00:06:28]>> Just extraordinary. Yeah. And it wasn't just that one person. Apparently, there was a a sort of rough poll, a show of hands about, hey, do you think the stock market is going to end up even further on the year or do you think it's going to end down from where we are right now?

[00:06:42]And the overwhelming consensus was that the line was going to continue to go up.

[00:06:46]Uh the headline describes it as blissful ignorance. And look, I think this is proof positive that the stock market is not only divorced from the reality of what ordinary Americans lives are, it is a negative indicator. The more the stock market goes up, often times in recent years, it's been because, oh, we did a bunch of layoffs because we can use AI to replace a bunch of workers. Like that is what they're betting on. When you we talk about this big bet on AI, it's not just, oh, the technology is going to help us cure cancer or whatever. Oh, what they are betting on is that AI is going to be able to replace a large number of human beings. That is the bet.

[00:07:27]Now, will that bet pay off or not? It's not entirely clear. I think that in some ways it will. You could also have a major bubble pop when one company succeeds and the rest of them fail, etc. There are a lot of dire outcomes that could come from this. But I think it's very important to understand that largely largely at this point when the stock market goes up given the large bet on AI that is a negative indicator for the well-being of Americans. And so yeah, if you're in the top 0.01% as these individuals, you know, hang out at the uh this milk and gathering as they would uh as they would likely be the little more gas prices at the pump.

[00:08:08]Yeah, you don't care about that. Who who cares if this trade of hormones is soap?

[00:08:11]It's not really affecting my life. I haven't changed my consumption habits.

[00:08:14]So, they are blissfully oblivious to what the reality is. And they don't care. I mean, they genuinely don't care about the way that this will cause ordinary people to struggle and suffer.

[00:08:27]Now, I think they're somewhat delusional that look, at the end of the day, you do need some kind of consumer base. Um, at the end of the day, you do need to avoid some sort of revolutionary fervor, which is very much increasingly on the table, especially the more they push things in this direction. But for today, apparently they're feeling pretty good.

[00:08:46]M.

[00:08:46]>> Yeah. But, uh, we have another indicator from Costco. Let's put this up on the screen. This is, uh, the Costco CFO, uh, who is saying that members are basically switching from beef to chicken.

[00:08:59]Actually, I'm just going to read this whole quote because it's very interesting. uh by the way not just in this current quote recession or concern for recession he said historically we've always seen some like within fresh protein we've always seen when there's a recession whether it was 99 20009 080910 we would see some sales penetration shift from beef to poultry and pork we have seen some of that now I think anecdotally I heard a few months ago from our head of food and sundries buyer that we saw some switch even from some to some canned products like canned chicken and canned tuna and things like that so again just to empas criticized.

[00:09:32]This is the really the tip of the iceberg in terms of in price inflation that we're likely to see if the war were to end today hypothetically. Uh that a lot of these prices would still be spiking for the months ahead. And uh there's already what feels like I mean we had uh Roit Chopra on last week, former head of the CFPB, Crystal, to talk about the circular funding uh in a lot of AI companies. uh actually just in AI in general the entire structure which is now like 30% of the S&P 500 is the MAG7 companies which is actually really horrifying because if you have investments from Nvidia to Microsoft and then Microsoft to Nvidia and that sort of thing uh and they're not anticipating a particular shift in the market or they just haven't they don't have it as a a high likelihood. They haven't priced it in exactly as they probably should be doing and everything starts dissolving in front of us. Um what could happen economically? what could happen culturally uh we are not prepared for what we could be seeing in the next 6 months year two years uh just right on the cusp of something potentially catastrophic I think at least I mean I I hope that's not the case but also all of this is going to amount to more and more spending uh from the US government which I think a lot of people on the right were correct to point to I mean yes you have greedflation that's absolutely already taking place there's no question about it you see it sometimes in the earnings calls showing up uh but also the government spending is going to cause average people who now are losing jobs because of the AI boom uh to spend more there think prices are going to go up like that's how this works and so it's just a complete mess a complete mess from the administration that was elected on a pledge to stop inflation to bring inflation or to to halt the growth at least of inflation and is now back up to about the inflation level uh month about the monthly inflation level uh as when Trump took took office. It's at around 3% uh in January of 2025.

[00:11:31]>> So any improvement that was made has been reversed effectively >> tax cuts too. We've se have you seen the the calculations that what average people are coming are getting from their tax cuts has been erased by gas price increases.

[00:11:43]>> Yeah. Well, and I learned from you that they were really betting hard on, oh, that that everything's going to turn around for us. Once people see their tax bill and they get getting their tax breaks, then that's going to save us.

[00:11:52]And guess what?

[00:11:53]>> Here it is May. People know what they're getting in terms of their refund and they're not feeling the love here.

[00:11:59]They're not feeling like this is going great for them whatsoever. Yeah. Zooming out, it's just a very volatile mix.

[00:12:06]You've got this AI backlash both at the ground level in terms of data centers.

[00:12:11]You've got deep concerns about the way they want to replace labor if this technology is anything like what they say even if in the long term the most hopeful optimistic projections which I don't believe but let's give it to them that over the long term it's going to cause more job creation than it is job loss in the immediate to medium-term like go look at the industrial revolution how long it took for in in the developed world right in the places that really ended up being net beneficiaries of the industrial revolution. It took over a hundred years >> for all of that to ripple through the economy. It's not like you just flip a switch. It's going to be extremely disruptive and extremely painful, if anything, approaching what they promise comes true. And if it if it doesn't come true, then you've got the biggest bubble probably in human history that's been inflated here. I mean, the amount of money that's being spent on these data centers is utterly utterly insane. So you've got that you have in addition to the labor displacement obviously that is going to lead to a further spiraling of vast inequality again of the the worst that we've probably ever seen in human history. You have an extraordinarily volatile political climate and a an empire here that is coming unglued. And that part of why it's coming unglued at this point is because of this disastrous war that the population did not want, does not want, that has now been decisively lost from a strategic p perspective and is imposing massive daily costs on the American people. I mean, it's it's a pressure cooker, Emily. That's the only way you could put it. It is an absolute pressure cooker.

[00:13:54]And obviously, we talk to Professor Pap every week here because we found his insights on the escalation trap very valuable. He's also writing a book on the likelihood of political violence and we need to have a conversation with him about that as well because he's deeply concerned about the confluence of some of these events and the way that they contribute to a rising trend of political violence. I think I mentioned this last week, but my final thought here is uh Roger Dreer has been he's an Orthodox Christian conservative has been been working on a a book about Weimar America sort of drawing up parallels between Weimar Germany uh and what we're seeing in America right now just any like cultural indicators looking at some of that and economic indicators and looking at that stuff. and he finished it a couple of weeks ago and said in his newsletter on Substack basically that he believes the one thing uh that would really be the tipping point from America as we know it today to something much much darker uh including more political violence would be an economic crisis and Chris I feel like people sense that I don't think it's you have to write a manuscript on this and I'm not saying of course you're not making the the uh cliched apples to apples parallel between Warar Germany itself and what came after in America and what might come after. But obviously when you have economies as you just laid out with this level of instability and procarity, uh, you could go to some dark places really, really, really quickly.

[00:15:17]>> Hey, if you like that video, hit the like button or leave a comment below. It really helps get the show to more people.

[00:15:22]>> And if you'd like to get the full show, ad free and in your inbox every morning, you can sign up at breakingpoints.com.

[00:15:28]>> That's right. Get the full show. Help support the future of independent media at breakingpoints.com.