GOLD is the money of the KINGS, SILVER is the money of the GENTLEMEN, BARTER is the money of the PEASANTS, but DEBT is the money of the SLAVES!!!

Monday, February 6, 2017

John Rubino: Will It Be A Greater Depression or Weimar Germany?

Even if it begins as a Greater Depression, it will end up as a Weimar Germany. But with Trump in White House and most of the country already at Great Depression levels of hardship, it will be Weimar Germany in the US without a stock market collapse intervening. Stocks will rise and rise along with all other real assets including gold and silver. However, as John predicts, gold is riskier to hold since it is almost guaranteed to be confiscated to pay for imports with, when the US$ is no longer acceptable as payment and exports earn no foreign exchange as all the US$ held outside the US are used up to pay for them.

Transcript : howdy folks and welcome to The Daily 0:10 calling my name is growing and today is 0:12 Thursday January 26 2017 and I have the 0:18 great honor and very distinct pleasure 0:20 of welcoming back to the show mr. John 0:23 rubino from dollar collapse dot-com John 0:27 welcome back 0:29 they were very good to talk to you again 0:31 well I'm certainly glad you're here we 0:33 have a lot of ground to cover so we're 0:35 just going to jump right in 0:36 ok 0:39 zerohedge had published a few days ago 0:42 that article about eighty percent of the 0:45 central banks are planning on getting 0:48 into the equities market which is a 0:50 terrifying idea in my opinion and this 0:56 is from that article says the bad news 1:00 is that as more people realize that a 1:04 free quote market now only exist in 1:08 textbooks and that soviet-style central 1:11 planning is the only game in town 1:14 confidence and price formation will 1:18 evaporate and turned pushing even more 1:22 market participants out of the 1:24 quote-unquote market until only central 1:28 banks are left bidding on each other's 1:31 otherwise worthless stock certificates 1:36 now if the central banks are in their 1:41 purchasing directly all of these stocks 1:45 which there are some people that believe 1:47 in you maybe one of them that they've 1:49 been doing this for quite some time and 1:53 the comments of you it made the comment 1:55 about gold and silver and more 1:57 specifically about silver becoming even 2:01 a better investment in light of this and 2:05 what I was like John is for you to kind 2:08 of expand on that and share with us your 2:13 thoughts on silver in relation to what's 2:16 happening with the central banks making 2:19 these equities purchases church together 2:23 there's a lot of ground to cover you 2:25 have to set up the move the background 2:28 that explains how we ended up with 2:31 central bank's buying equities because 2:34 it wasn't so long ago you know we're 2:35 talking to a decade-and-a-half that the 2:38 Federal Reserve's job was to set 2:39 short-term interest rates and that was 2:42 basically it 2:42 you know it did Russell the federal 2:44 funds rate which in turn controlled bank 2:47 lending to an extent and so that was its 2:49 policy Weaver but 2:52 during the past 30 years the the Fed 2:57 mostly under alan greenspan allowed so 3:01 much new depth to be created and allow 3:05 the system to become so highly leveraged 3:08 that it became so fragile that any kind 3:12 of a crisis became an existential crisis 3:14 so the bed was left needing to bail out 3:18 pretty much everybody inside every time 3:19 there was trouble they had to intervene 3:21 in some big web and that in scented the 3:26 financial system take on even more debt 3:28 because the Greenspan put quote-unquote 3:32 came to be perceived as explicit public 3:36 policy specifically if there's any kind 3:39 of trouble any trouble in any major 3:41 financial sector anywhere in the world 3:44 the bed was going to intervene bailout 3:45 the guys who made the bad loans and 3:49 basically socialize losses while 3:52 privatizing profits so that the system 3:54 under that kind of a federal regime has 3:58 gotten more and more leveraged and every 4:00 crisis has gotten bigger and bigger 4:02 requiring more action by the Federal 4:04 Reserve that that is brand-new stuff 4:06 that didn't used to do so they they 4:07 originally began with QA where they 4:10 started buying bonds as a way to control 4:13 longer-term interest rates which is a 4:15 new thing to them and that prevented the 4:19 1930s style depression but at the cost 4:21 of huge amounts of new debt being taken 4:23 one same thing in Japan same thing in 4:25 Europe and it forced some of the central 4:29 bank's out there specifically 4:30 switzerland and Japan who had bought up 4:34 all the bonds you know there were no 4:35 bonds left to buy so they had the shift 4:37 to something else if they wanted to pump 4:38 currency into the system and they 4:41 started buying equity so you got the 4:42 Japanese central bank now as one of the 4:46 largest shareholders in a long list 4:49 Japanese blue chips and you got Swiss 4:52 central bank a big shareholder in 4:55 international blue chips like Apple and 4:57 Facebook you know so these guys are like 4:59 hedge funds now their major players in 5:01 the equity markets and the Fed and the 5:03 European Central Bank are kind of being 5:05 pushed in the same direction Janet 5:07 Yellen the chair the Fed is making 5:09 speeches where she says you know when it 5:10 be nice to be able to intervene in 5:13 markets that have a more direct impact 5:16 on spending decisions in other words she 5:18 wants to start buying equity for a lot 5:20 of economist or telling the the ECB the 5:22 European Central Bank they need to start 5:24 doing the same thing and the reason for 5:26 that is because old-style monetary 5:30 policy is totally stopped working 5:32 it's been taken to limit and New Age 5:35 monetary policy by quantitative easing 5:37 is reaching its limit 5:39 you know you can't push interest rates 5:40 down much below zero you want to system 5:43 to work 5:43 you can't buy up all the high grade 5:46 bonds in a system that you want the bond 5:47 market store and so they're they're 5:50 moving on to the next available asset 5:52 class which is equities and what's clear 5:55 in this process is that the guys doing 5:58 this don't understand what markets are 6:00 or how they were because markets are 6:04 basically price signal mechanisms that 6:06 tell people with capital where to put 6:09 that capital it's not as Lee you know 6:10 when the stock is going up that means 6:12 that business model is perceived to be 6:15 working and to be creating new wells so 6:20 it tells people with capital to invest 6:22 today maybe this kind of thing is a good 6:24 thing to do with my capital and vice 6:26 versa when a price is going down to the 6:28 company you know it says that this thing 6:30 isn't working for some reason so don't 6:31 put any more money over well with 6:34 central bank's buying stocks 6:38 indiscriminately because what they do is 6:39 they basically go in and buy you know 6:41 their national equivalent of a closer to 6:43 the S&P 500 with equal amounts or market 6:48 cap weighted amounts thrown at each 6:50 stock and what that does is it makes 6:52 every stock go up about an equal amount 6:55 of other things vehicle you know but 6:57 based on feedback and 7:00 therefore the market stop sending 7:03 signals about what works and what 7:05 doesn't work you got this gigantic buyer 7:07 in there that's pushing everything up 7:09 kind of simultaneously so markets then 7:13 stopped working as capital allocators 7:18 and capital doesn't know where to go so 7:21 it kind of goes in random directions 7:22 because everything seems pretty hot 7:24 right now so just invest in anything you 7:26 know so you get the the movement towards 7:28 index for instance where people instead 7:31 of buying actively managed portfolios 7:34 that might go up because the the stocks 7:37 in there are at least in theory the best 7:39 stocks on you just like across-the-board 7:42 equities via some kind of a DTS and you 7:45 get exposure to market but you don't 7:48 generate Alcide and not in hedge funders 7:52 you know you don't make anything above 7:53 and beyond what the market is gonna make 7:55 so the important thing to understand 7:58 about this is that the thing that 8:00 separates today's world from the world 8:02 of 10,000 years ago his market you know 8:06 that that's the only thing that has 8:08 allowed all these people to be born in 8:11 fed and of all the new stuff that is 8:14 going on right now you know all the 8:15 wealth has been created by new 8:16 technologies and everything come from 8:18 markets and all the political freedom 8:21 that we enjoy now comes from a 8:24 market-based economy throwing off enough 8:26 wealth to finance a big middle class 8:28 which then demands basic freedom for 8:31 everybody you know the show the world 8:33 that we know and take for granted is a 8:36 market-based world and if you screw that 8:38 up then you know we might as well be 8:41 ancient Egypt or the Roman Empire or you 8:44 know medial your for something like that 8:46 that's the only level of wealth creation 8:49 that will be able to manage and we're 8:51 headed that way and this is terrifying 8:54 on a low level up one more level where 8:56 it's terrifying is that has government 9:00 acquire more and more of the of equities 9:04 of the private sector you know their 9:06 ownership stakes in big companies growth 9:09 can certainly try and that means 9:12 they have control over the company at 9:14 some point so we we end up with some 9:15 kind of an industrial policy where 9:17 governments are are able if they want to 9:19 to direct the activities in corporations 9:22 and you know they're going to want to 9:23 you know you kind of power will will 9:25 always be used when it's available 9:27 imagine president Trump waking up some 9:30 morning and finding out he's the 9:31 majority owner of general motors in 9:34 Boeing you know guess what he's going to 9:37 tell them to do a lot of things but they 9:39 might not do otherwise if they're just 9:41 efficiently allocate capital or you know 9:44 let a democratically controlled Congress 9:46 find out it's in control of the most 9:49 companies in the S&P 500 and all of a 9:51 sudden every congressman's going to get 9:53 a big factory in his district you know 9:55 stuff like that will happen and lush 9:57 again no growth grinds to a halt when 10:00 that happens that's what your tried 10:02 post-war to where they basically 10:03 nationalized a bunch of industries and 10:06 it was a catastrophe and innocent isn't 10:09 that exactly what this has the potential 10:12 of doing is nationalizing certain 10:16 companies and other companies completely 10:20 falling out of the mix so if we've got 10:24 the central bank's they're buying all 10:26 the big box store stock that means that 10:29 every single mom and pop store that's 10:32 left at this point will absolutely 10:35 vanish because they won't have any funds 10:38 whatsoever and even within the equity 10:42 so-called market itself you would have 10:46 major winners and the rest losers or am 10:52 I wrong in thinking that I mean you're 10:54 only going to have the things you know 10:56 the Facebook Amazon Netflix google all 11:01 Apple all of these guys are going to be 11:04 the winners everybody else 11:06 loser sorry for your bad luck yeah if 11:12 government start buying equities or 11:14 continue to buy equities what they do is 11:16 they buy the biggest stock obviously you 11:18 know they're not going to buy tiny 11:19 little micro cap growth stocks are going 11:21 to buy the S&P 500 11:23 which advantages the big companies it 11:27 races their value relative to the little 11:30 guys and allows the big companies to do 11:32 a lot of bad things you know it letting 11:34 company rolled up its industry by buying 11:37 up the smaller competitors because the 11:38 big company stock is relatively more 11:41 valuable so it gives it the ability to 11:42 basically take over its industry so you 11:45 end up with a bunch of giant companies 11:49 running pretty much everything and not 11:53 much room for startups and mom and pops 11:55 and things like that so you don't get 11:56 you don't have dynamism in the economy 11:58 anymore when you have these big 12:00 lumbering monstrosities running 12:04 everything because it's really the the 12:06 fun and dynamic aspect of a modern 12:10 economy takes place in garages to begin 12:12 with you know that that's where the 12:14 really interesting stuff happens and 12:15 then they become to Google's with the 12:17 world and then a bunch of new garage 12:19 bays companies have to start to take on 12:22 the Google and Microsoft of the world 12:24 well if you short-circuit that process 12:27 by throwing a ton of public capital at 12:31 the biggest companies in the world you 12:33 you get pretty much another version of 12:37 the paralyzing of the price signaling 12:41 mechanism of market so yeah you know 12:43 this is terrible from a lot of different 12:45 points to do and probably also an excuse 12:48 me God but sure don't you also get a de 12:52 facto trans-pacific partnership because 12:57 who else is left 13:00 I mean the now the major corporations 13:03 they're all fat and sassy and they began 13:07 dictating how things are going to be 13:10 well we're going to force you to use 13:14 this Microsoft x product we're going to 13:17 force you to use this Apple x product 13:20 going to force you to do exactly what we 13:24 want and if you don't like it 13:26 sorry for your bad luck I mean it's not 13:28 really not yet the direction that would 13:31 have it is in if you want a real world 13:34 example of how that works look at the 13:36 banking sector in the u.s. exact 13:38 starting about 20 years ago we basically 13:40 told the big banks they're too big to 13:42 fail and will always bail them out and 13:44 that de facto government guaranteed 13:47 raised their market value relative to 13:50 that of small banks and so the big guys 13:54 just basically rolled up the industry 13:55 and you've got you know the mortgage 13:56 market in the US prisons dominated by 13:58 five or six tanks and you know so we 14:02 live under Oh a government that's 14:06 kind-of sort-of by jpmorgan chase and 14:09 goldman sachs and for jpmorgan chase in 14:12 goldman sachs already 14:13 yes we're seeing that in the financial 14:15 sector and to an extent that's true in a 14:18 lot of other areas because we've allowed 14:20 a lot of big ol the gospel is to form 14:23 over the years but this this would 14:26 turbocharged it you know what we started 14:28 buying the S&P 500 with newly created 14:31 currency you know brought into existence 14:33 out of thin air by the Fed then we would 14:37 basically be handing these guys 14:39 unlimited credit cards and allowing them 14:42 to do anything they want to so yeah you 14:44 know if you want to live under the and 14:47 the rulership of Microsoft and Google 14:50 and walmart and Monsanto and connects on 14:55 you know that we're headed that way now 14:57 and and the the idea that it's ok for 14:59 central bank to buy up most of the 15:01 equities and market is pretty much to 15:05 guarantee that we'll end up there and 15:07 and this is even necessary for the 15:11 Federal Reserve or any central bank to 15:14 purchase these equities or bonds or 15:18 anything else when all they have to do 15:22 legally it's just print money and handed 15:26 out they don't have to actually buy 15:28 anything I mean they just they can 15:31 literally just turn the printing press 15:33 on and start printing dollars start 15:37 printing in start printing euros and do 15:40 with them whatever they wish I mean it 15:43 and 15:44 and isn't this really kind of just a 15:46 backdoor way of taking over everything 15:51 yeah i mean that's what we already do in 15:54 the government bond market for instance 15:56 the government borrows money in order to 15:58 fund itself right and sends bonds out 16:01 into the market than the Fed creates a 16:02 bunch of dollars and buys those bonds 16:04 back and attract the Fed is just pretty 16:08 money and tossing it out in the market 16:09 already you know we're already doing 16:11 that and I i think you know it's a 16:14 combination of the nourishes that's the 16:15 way they've always done it and this 16:17 sense that if they do it this way it's 16:20 kind of hidden people don't completely 16:22 understand that we're just creating new 16:25 currency and funding the the the big 16:28 governments in the company's of the 16:30 world with this newly-created made out 16:33 of thin air currents so you know because 16:34 that might be politically hard to 16:36 explain but the way we do it now is so 16:38 convoluted that they don't have to 16:40 explain it because nobody really even 16:42 knows how to ask the question during 16:44 political campaigns did you notice that 16:46 this wasn't mentioned in the last 16:48 political campaign you know nobody at 16:51 the presidential level thought it was 16:54 worth discussing or nobody understood it 16:57 well enough to even think of it as a 16:59 topic for discussion 17:00 I don't know I like yeah that's the case 17:03 that they're just not enough 17:05 intelligence to ask asking the right 17:08 question 17:09 I mean the guys proved themselves to to 17:13 not be the sharpest tool in the shed in 17:15 the first place 17:16 I mean for the most part the ones that 17:18 were actually able to get out there and 17:20 ask questions remain with all their fake 17:24 views and so so forth 17:26 that's why Ron Paul was always so much 17:28 fun because he actually asked these 17:29 questions on a stage with a bunch of 17:31 other Republicans and knowing that they 17:33 would laugh adding behind his back but a 17:36 significant part of the people watching 17:38 those debates back then we're not 17:41 laughing at him right they were there 17:43 cringing at the way the other 17:44 Republicans you didn't understand Ron 17:48 Paul you know wondering whether gold is 17:49 still money or not wondering what the 17:51 Fed should be allowed to just create 17:53 money out of thin air 17:55 when that was the real question we 17:58 should have all been asking and you know 18:00 i would say right that it's too late now 18:01 you know we're headed off this cliff no 18:04 matter what we do and we can accelerate 18:07 the process by doing stuff like you know 18:10 having central bank's buy equities and 18:12 corporate bonds and you know after that 18:14 is not much stopping them from buying 18:16 real estate they could buy our houses 18:18 but twice the current market value and 18:19 stuff like that you know is that would 18:21 accelerate the process but even if they 18:23 stop doing crazy stuff right this minute 18:26 we still have debt at between three 18:29 hundred and fifty percent of global gdp 18:31 or eleven hundred percent of global gdp 18:34 depending on how to calculate dad and 18:36 that's a death sentence for the current 18:38 financial system that in in and of 18:40 itself you know we've already done the 18:42 damage we've already baked the next 18:44 gigantic financial crisis into the cake 18:46 so you know the behavior of the 18:50 government going forward almost doesn't 18:53 matter because it's the system is toast 18:57 regardless and it's just a question of 19:00 what kind of a crisis we end up 19:02 engineering with our mistakes going 19:04 forward we could have a 1930s style 19:06 depression when all the step gets left 19:08 out to default or we could at could have 19:10 a y Mar Germany kind of crack up boom 19:14 hyperinflation where we just print so 19:16 much new currency that it becomes 19:18 worthless everybody loses faith in it 19:20 those are the only two ways to get rid 19:22 of debt at this level you can't grow 19:24 your way out of it and then really 19:26 that's where gold and silver come into 19:29 play for you and I and the people that 19:33 are listening to this I mean that's 19:34 really the only way that we can protect 19:38 ourselves from either one of those 19:40 scenarios that you just described right 19:43 yeah that's because you know we can vote 19:45 in elections and we can call our 19:47 congressmen and we can march on 19:49 washington and and and that's all you 19:51 know it's interesting civil involvement 19:53 and everything is good stuff to do but 19:55 it won't stop what's coming right so all 19:57 we can do if we can't change the 19:59 political system and check can change 20:01 the momentum of the financial system 20:02 office cliffs that's looming then all we 20:05 can do is take care of ourselves and our 20:06 families 20:07 and you do that by arranging your 20:10 finances so that they're not immune 20:14 necessarily but they're so they're 20:16 resistant to the kinds of pressures that 20:18 we're going to see going forward you 20:19 know the governments of the world are 20:20 going to have to try to inflate the 20:22 currency's away in other words make 20:24 their currencies worth a lot less so 20:26 that their deaths are easier to manage 20:28 you know you pay off your debts in full 20:29 but you're paying them off with dollars 20:31 that are worth a half a third as much as 20:33 they were when you borrowed them you 20:35 know and that's really the only 20:39 politically palatable solution that is 20:42 there for today's and tomorrow's 20:45 politicians up so you want to get away 20:47 from that by getting out of national 20:51 currencies you know if you don't own a 20:52 lot of fiat currency then you won't be 20:54 hurt when it drops by two-thirds and so 20:56 ship your money into into older forms of 21:00 money like gold and silver that can't be 21:02 created by governments out of thin air 21:04 and those things will rise in value much 21:08 more slowly therefore i'm sorry rise and 21:10 supply much more slowly so they'll hold 21:12 their value of a lot better than fiat 21:16 currencies will and that's been true for 21:18 3,000 years now you know there have been 21:20 financial crisis every year since the 21:24 days of the Roman Empire somewhere and 21:26 in every single one of them without 21:28 exception gold and silver held the value 21:31 and and went way up in local currency 21:34 terms while those local currencies were 21:36 being destroyed so it'll happen again 21:37 same land I and and silver might 21:42 actually be better than gold as a store 21:46 of value and as a way to build capital 21:48 because gold is going to become kind of 21:50 a target for government you know it 21:52 already is something that a lot of 21:54 people think is manipulated with western 21:57 central bank selling their gold secretly 21:59 on the open market to keep the price 22:01 down because gold going up is the same 22:04 thing as saying the dollars going down 22:05 you know and and the guys managing the 22:08 fiat currencies don't want to be made to 22:10 look that my gold going out so they take 22:12 steps to to manage the increase or you 22:16 know actually make it go down 22:17 silver on the other hand tends to move 22:20 along with gold but it's an industrial 22:22 metal used in dozens of different really 22:25 crucial industries out there and 22:28 therefore it can't be just confiscated 22:32 by the government it it can't be taxed 22:35 in weird ways where you know if you're 22:37 still there goes up in value the 22:39 government takes half the profit that 22:40 you can't do that because so many big 22:42 industries are using solar so silver 22:44 might be freer of the content 22:46 manipulation that desperate government's 22:49 engage in and therefore might go up even 22:53 relative to go you know develop 22:55 dramatically relative to dollars can 22:58 somewhat relative to gold so might be 23:00 the best thing go 23:01 it's nice and cheap right now you know 23:02 kind of dropped from fifty dollars an 23:04 ounce 216 and change today so i think 23:08 five or 10 years from now people are 23:11 gonna look back at these prices wish 23:13 they'd get a mortgage now sold the extra 23:16 car and took their kids out of college 23:18 and use that money to buy silver and I'm 23:20 not that I'm recommending you do any of 23:22 those things I'm just saying people are 23:23 going to wish they did in the future now 23:25 are as far as what what you just 23:28 described I mean what would keep these 23:31 guys the government from nationalizing 23:35 silver and saying well you have to turn 23:37 in all your silver because it is already 23:41 considered a strategic material or 23:44 strategic metal why would they take that 23:47 to the next level and say it's it has no 23:52 value and you have to turn it in 23:57 well I mean they could try that it would 24:00 be incredibly complicated because 24:02 businesses use silver so what would stop 24:05 you from incorporating and saying oh I'm 24:08 a silver fabricator or something like 24:10 that you know that that would be a big 24:11 business or lawyers setting up silver 24:14 fabrication LLC is for people you know 24:16 because it would just be an easy thing 24:18 to get around compared to with gold 24:21 where they could just say you know what 24:22 like it's 1934 all over again turn your 24:25 gold in and if you don't turn it in and 24:27 you get a ten-thousand-dollar mine and 24:29 we'll put in jail yada you know it did 24:31 that that simpler because go 24:32 wasn't used by a thousand different 24:36 companies across the country and and 24:40 bought and sold all the time on 24:42 exchanges you know among in between 24:44 these companies right it's more 24:46 complicated it's not impossible for them 24:48 to mess with something like silver but 24:50 it's way harder so that they would try 24:53 with gold first i would imagine and 24:55 silver would be the last gasp of the 24:58 really crazy desperate government you 25:00 know if they try to start making it 25:02 illegal to own industrial materials for 25:05 people then we've really drifted into no 25:09 fascist Twilight 72 and the neverland 25:12 yeah because you would need a lot of 25:14 cops to fully silver yeah we would have 25:17 a creative and an even bigger police 25:18 tape and we have now and we would 25:20 criminalize huge sections of the 25:22 population and create gigantic black 25:24 market you know the black market as far 25:28 as those coming into full view I mean 25:31 because that's what I would see John 25:33 that as see that happening really kinda 25:38 regardless of of what happens going 25:41 forward I think that as the situation 25:46 continues to deteriorate further and 25:48 further stars our economy and finances i 25:53 see black markets on the horizon 25:56 I mean or manages completely out of my 26:00 mind and thinking that well yeah I as we 26:05 screw up the economy more and more 26:07 dramatically the later stages of this 26:11 process start to look a little bit like 26:13 Venezuela you know where you guys a lot 26:16 of government intervention intervention 26:17 market and price controls on things and 26:20 and he more and more capital controls on 26:24 your ability to move money in and out of 26:27 the country and and how much of one 26:29 thing you can own versus another thing 26:30 and and people tend to try to get around 26:34 stuff like that just because they're so 26:35 obviously bad laws you know you don't 26:39 really feel any moral qualms about 26:41 cheating on your taxes if your tax rate 26:44 is seventy-eight percent 26:45 rocky and the same thing is true in an 26:49 inflationary economy where their price 26:52 controls and capital controls and things 26:54 like that you you lose respect to the 26:56 government therefore you don't really 26:57 care if you're a small-time criminal 27:00 buying stuff out of the trunk of 27:01 somebody's car you know that's the way 27:03 it works right and silver and gold would 27:06 would be very major components of the 27:11 kind of black markets that would spring 27:13 up if we enter that stage you know if we 27:15 we enter something akin to 27:18 hyperinflation and the government starts 27:20 making a lot of arbitrary crazy rules 27:22 then silver and gold along with possibly 27:26 a Bitcoin or some other kind of 27:28 cryptocurrency would become the stories 27:32 of value and the medium of exchange we 27:34 would bypass the the established 27:37 financial system because the 27:39 establishment natural system is how the 27:40 government contract what we're doing you 27:42 know when I want them to know what we're 27:44 doing anymore and the war on cash is 27:46 part of this on early-stage part of this 27:49 process because governments want to be 27:52 able to move interest rates below zero 27:54 that's how crazy things are they see a 27:55 need for long-term negative interest 27:58 rates out there in the next recession 28:00 but they can't do that if there's cash 28:02 because we'll just pull their money out 28:03 of the bank or bank account is yielding 28:05 negative 2 percent or whatever rice and 28:08 and will bypass the banking system and 28:10 so that means government monetary policy 28:12 its premise on negative interest rates 28:14 won't work anymore so a lot of the 28:16 comments you saying well we just need to 28:18 get with a caption not all we need to 28:20 fix our financial policies so we don't 28:22 need negative interest rates are saying 28:24 well let's just get rid of cash so we 28:26 can have negative interest rates were 28:27 high and yeah and and that's out there 28:32 probably coming in the next session two 28:35 things of kind of calm down a bit right 28:37 now where interest rates have stopped 28:38 falling and and the financial markets 28:40 don't seem quite as shaky as they were 28:42 but that's because we're in literally in 28:44 year 9 of a recovery 28:47 which is usually when things seem 28:49 artificially stable or but all that 28:52 means is that we have been borrowing 28:53 more money for the last nine years and 28:56 spending it but now we have all the 28:57 steps so when the next recession comes 28:59 or even more fragile or even more prone 29:02 to a total breakdown just melt down at 29:05 the global financial system which will 29:07 require even more extreme government 29:09 policies so I I'll got on the lemon same 29:12 within two years we'll be talking 29:14 negative interest rates in the US and 29:16 capital controls and some sort of price 29:19 control and some sort of you know 29:20 limitation to ban on cash 29:24 we won't necessarily be implementing all 29:26 that stuff but we'll all be on the table 29:28 it will all be open for discussion and 29:30 at that point you're going to want to 29:33 have a lot of silver coins & gold coin 29:34 fashion safe places because that's the 29:37 only thing that that will be immune to a 29:39 lot of this stuff unless they they 29:42 target those things you know that in 29:44 which case then you become part of the 29:46 black market you know right but you 29:48 don't want a bank account in that 29:50 circumstance because it will yield you 29:52 nothing and it will be prone to to 29:54 expropriation you know when they start 29:56 doing bank bail-ins and start vacuuming 30:00 up checking accounts in order to pay for 30:02 a bank that goes bust you know things 30:04 like that and mean that's kind of was 30:08 what happened and India gettin a and and 30:13 that has it's just unbelievable 30:16 [Music] 30:17 what's going on there and the absolute 30:21 devastation that the citizens are as 30:26 this hand that they've been dealt that's 30:28 been forced on now and yeah it india has 30:32 ordered you know it well it india was a 30:35 a little bit of a special case because 30:37 they're kind of a cash-based economy 30:40 yes means nobody had to pay taxes the 30:43 government wants everybody to pay taxes 30:44 so they're trying to financial eyes the 30:47 economy in other words get everybody to 30:48 pay their bills with checks and credit 30:52 cards that can be traced 30:54 so you can tell who owes what in taxes 30:56 so you can see the government's point 30:58 except that it represents increasing 31:04 control of the government over people 31:07 and lessening of privacy and it's a 31:11 shame to see that happen anywhere at any 31:13 time because we're starting to see it 31:15 slip away for for us here in the US 31:18 yes and so it's it's suddenly an 31:21 important thing you know financial 31:22 privacy is almost gone for us because 31:25 they can track everything now 31:28 no I mean there they can record this the 31:30 skype call and they can turn on your 31:33 cell phone even if you have it off they 31:35 can still turn on the mic and they have 31:37 to listen to like the saying now and 31:38 then so we don't really have privacy 31:40 anymore in cash represents really the 31:42 last little bit of financial privacy 31:46 that exists out there for a lot of 31:48 people so it represents a lot more than 31:51 just you know a mechanism for the 31:53 government to figure out who owes what 31:54 and taxes it's it's it's your privacy to 31:57 financial privacy and as we lose other 32:00 kinds of privacy with a little bit of 32:02 print financial privacy thats left 32:04 becomes ever more valuable because it's 32:06 so rare 32:07 yes I would agree with that and the 32:10 situation in India I mean first of all 32:15 that nation represents the population 32:19 represents one in seven people on the 32:21 entire planet 32:23 second of all like he said there was a 32:26 cash-based economy and some of the 32:29 numbers about that i've read is between 32:31 eighty and ninety percent somewhere in 32:34 that range as far as all of their 32:37 transactions were cash-based you know to 32:40 the tune of eighty to ninety percent and 32:43 another interesting or more pertinent 32:48 aspect of what is what's happening is 32:52 only about 300 million out of the 1.3 32:58 billion people have access to the 33:02 internet and less than or somewhere 33:05 around half the people 33:07 have bank accounts you start talking 33:10 about these are astronomical numbers as 33:13 far as the impact on this country and on 33:18 the only individual citizens as far as 33:21 their ability to just get through the 33:25 day and that's it that i'm talking about 33:29 being able to have bread have water 33:33 have you no one piece of comfort brought 33:38 into their life for the day 33:40 those are all gone because they have no 33:42 cash and yeah they know they've got was 33:47 a pretty extreme case you want to 33:50 literally that was all the money a lot 33:51 of people had got all of a sudden those 33:54 big bills that they were saving some 33:56 seems to have any value 33:57 yeah that that ruin lives there and 34:00 possibly you know will lead to regime 34:05 change in the next election is going to 34:07 be hard to to run on the record of 34:10 having done that if you have guy in 34:12 charge of india so yeah and and you know 34:15 china's got a lot of stuff going on 34:16 better kind of similar but not exactly 34:20 the same thing but with a similar 34:21 motivation they borrowed huge amounts of 34:24 money over the last 10 years probably 34:27 more than any other countries ever 34:29 borrowed one 10-year stretch and a lot 34:31 of it was missed and can't be paid back 34:33 and and now the people who were made 34:35 rich initially by that are trying to get 34:37 their money out of the country so China 34:40 is imposing lots of different kinds of 34:43 capital controls on its rich people to 34:46 keep them from taking their yuan and 34:48 buying a vancouver condo or a miami 34:51 condo or or you know Los Angeles real 34:54 estate or something like that or gold 34:56 bars in Switzerland because they're 34:58 afraid that once that capital flight 35:01 really gets going it will become a 35:03 stampede 35:04 they won't be able to support the 35:05 currency in the currency of crash and 35:07 that's the kind of thing that happens 35:08 when you borrow way too much money you 35:11 start to lose control of the system and 35:14 the only way to keep control in the 35:16 moment is to impose really draconian 35:19 police state kinds of rules on your 35:21 people 35:21 yes and then you become something very 35:23 different you know then you're not a 35:24 well not that China was ever necessarily 35:26 a free country but they were at least a 35:29 capitalist country from the point of 35:31 view of guys with money to invest over 35:33 there 35:34 no you were able to buy and sell things 35:35 and now not so much anymore so they're 35:38 they're becoming a different country and 35:40 the u.s. is in the process of the same 35:43 kind of transition will air because we 35:47 screwed up our finances right as we 35:49 borrowed way too much money the 35:51 government is forced to do more and more 35:53 extreme things and that's changing the 35:57 nature of the country you know we 35:58 torture people now we pick people up 36:01 without a warrant and lock them up and 36:03 we kill people with drones from the sky 36:06 without any kind of due process or 36:07 anything and we create currency out of 36:12 thin air and just toss it out into the 36:14 world these are all things that Thomas 36:16 Jefferson and George Washington would 36:18 have been appalled by you know they they 36:20 wouldn't have accepted that as normal 36:22 functioning of the country the papers 36:24 they were designing and this is just the 36:27 beginning you know you leaving yeah 36:30 because for instance last year in fiscal 36:34 2016 the US government borrows 1.3 36:38 trillion dollars which is just that's 36:41 just the government borrowing over a 36:42 trillion dollars not corporations and 36:45 people taking out car loans student 36:47 loans etc etc you know the rest of us 36:49 were borrowing a ton of money too but 36:50 the government in in year age of a 36:54 recovery still felt the need to borrow 36:57 over a trillion dollars so we are 36:59 heading off that cliff at an accelerated 37:02 rate we're taking on more and more debt 37:04 now instead of less and less debt so 37:06 we're making things worse 37:08 which means that the crazy stuff that 37:10 the government has done the last few 37:12 years in terms of controlling people's 37:13 behavior and spying on us and everything 37:15 it is only going to be a lot more 37:17 extreme which takes us back to the the 37:20 whole you know central bank's buying 37:22 equities and stuff from and industrial 37:24 policy and everything you know that 37:25 that's a 2018 story probably that 37:30 it's going to be even more ominous them 37:34 than it sounds now you know it's going 37:36 to feel crazier at the time when it 37:38 actually happens when it does in 37:40 contemplation 37:41 so yeah you're right we're going to have 37:43 no shortage of stuff to talk about until 37:46 they make us stop talking he has them 37:48 well and that's what i was going to say 37:50 is that how interesting will this 37:54 conversation that we're having right now 37:56 how will it sound in 2018 2019 2023 when 38:04 more of the draconian tyrannical police 38:09 sta fascist nonsense has been rolled out 38:14 and shove down our throat a main it's 38:17 yeah there's a pretty good chance that 38:21 people from the end of this decade 38:24 listening to this conversation is going 38:26 to say wow those guys were over 38:27 optimistic they were written nearly as 38:30 worried as they should have been you 38:35 know it Trump Trump is just on TV today 38:36 saying that he hears the torture works 38:39 really well so we're going to revive 38:41 torture torture to be hammer it well our 38:45 president thinks it does well anyhow 38:49 that's just a sign of how rapidly things 38:52 can deteriorate what once it really gets 38:55 going you know what people get really 38:56 worried and start acting accordingly the 39:00 government has to respond to it you know 39:01 Kenna's Layla it took them about 10 39:05 years to go from you know reasonably 39:07 stable um member of open back making 39:11 lots of money from exporting oil to 39:13 flat-out bankrupt where they're eating 39:15 their dogs in their cats you know 39:17 yes and so can happen in a hurry and 39:20 we've been building the that the 39:23 momentum for something like this over 30 39:26 years now where every year we take on 39:29 more and more debt and every year we we 39:32 diminish our ability to pay off that 39:34 debt so it's coming 39:36 you know bad stuff the chaplain and it 39:38 will continue to happen 39:41 with the only upside being that this 39:44 kind of crisis creates a lot of 39:46 opportunity if you play it right you can 39:48 make lots of money how long it was going 39:50 on you know lots of people got rich 39:51 during the Great Depression Great 39:53 Depression of the 1930s by shorting 39:55 stocks right LOL dub it and it's really 39:59 not even from my perspective John it's 40:02 not really about getting rich is about 40:04 protecting myself and that's what I want 40:07 to learn is how to better protect myself 40:10 better protect my family and hopefully 40:13 educate people and how they can better 40:17 protect themselves and their families 40:19 and their communities 40:21 therefore we don't just get washed away 40:24 in this tsunami of of the dark ages that 40:29 are coming remain seriously I mean if we 40:34 end if you can get rich then great but 40:37 let's start with but let's keep the 40:40 Wolves out of the house first 40:42 yeah well you know you know I find be at 40:46 the possibility of making a ton of money 40:47 I kind of offset the fear that I feel 40:52 when I look at a lot of these other 40:54 trends 40:54 ok so it is you know it's a way of 40:56 maintaining some optimism going into 40:59 what will probably be a kind of a 41:00 chaotic time but the protection angle 41:03 obviously goes right along with the 41:05 trying to get rich angle you know 41:07 because they're really the same actions 41:08 yes with a different goal in mind but 41:12 yeah there's a lot of things that should 41:14 do well in this kind of environment from 41:16 an investment standpoint you know real 41:17 assets in general so a nice piece of 41:20 farmland is always going to have utility 41:23 right away if it makes food then then 41:26 very little can happen in the world 41:28 short of nuclear war that is going to 41:31 make that farmland worthless so that'll 41:33 hold it out here and you know energy 41:35 assets we're going to need energy going 41:37 forward although i would say a solar 41:39 farm might be a better thing to own in a 41:42 coal mine these day eh you know because 41:44 the intent technologies and transition 41:46 of energy from and and a well-chosen 41:49 piece of rental properties for instance 41:50 and i'm in a college town here 41:52 night at home and it's pretty stable in 41:54 terms of real estate but there's always 41:56 new college kids coming into need rental 41:57 properties you don't need a place to 42:00 live and and so the people who own you 42:03 know little modest rental houses that 42:04 they went to college kids have a steady 42:06 income and worse comes to worse they can 42:09 always moved in to a place like that you 42:11 know sell their other house and move 42:13 into the rental with which has been paid 42:15 off by the cash flow and everything so 42:17 that's something that that you can do 42:20 that will probably give you a good 42:23 chance of weathering whatever kind of 42:24 storm comes 42:26 so there's stuff you can do and it's 42:28 very helpful to I think psychologically 42:31 to be focusing on the positive stuff you 42:33 know rearrange and planning so you're 42:35 going to be in good shape and five years 42:36 is a positive endeavor a good thing to 42:39 be doing up for your mental health 42:42 so I'd reach that's one way because one 42:45 thing you don't want to do is listen to 42:46 these gloom and doom because of 42:48 interviews like a lot of what you and I 42:49 just said to each other and and 42:52 internalized that you know and just not 42:55 hydrolyze invited here 42:57 yeah you you gotta look at this stuff as 43:00 an investment pieces likely in other 43:03 words all of this stuff is going on yeah 43:05 it's dark but how do i play it you know 43:08 how do i exploit this stuff is going to 43:11 happen and then you've got kind of a 43:12 positive set of activity you can get 43:14 going forward which might have a payoff 43:16 at the end and so you're not paralyzed 43:18 with fear as you look out into this 43:20 world and getting darker all the other 43:23 good news through for myself anyway John 43:26 and I'm sure for you as well from based 43:28 on what you just said is that I just is 43:32 another coin here another calling there 43:34 and look at other other hard good items 43:40 that I need in order to continue to 43:44 function better that are outside of what 43:48 could be dictated to me or not dictated 43:53 to me if I've got my own then I'm in a 43:57 much better position you know if I've 44:00 got a little bit of solar 44:02 energy then I'm not as dependent upon 44:06 those wires coming to the house if I've 44:10 got a wood-burning stove and I'm not as 44:13 dependent upon the gas line coming into 44:16 the house and I look at these types of 44:19 situations and how I can like he said 44:23 exploit these things that I a I can't 44:28 control them and d they make they 44:30 improve my life and see they improve my 44:33 finances greatly so these are all very 44:37 positive aspects that I try to 44:40 incorporate every single day into my 44:43 life and I'm so grateful to speak with 44:46 you and I'm so grateful for you to bring 44:48 that to the table right there the whole 44:50 highlight of the of the show for me fish 44:55 yeah yeah it's really important to to 44:58 stress the positive side of this stuff 45:00 because otherwise that it's it's very 45:03 easy to just hear the crazy side you 45:05 know a lot of Kansas lot of good stuff 45:07 you can do you know another if we have 45:09 another 30 seconds another trend that's 45:11 really interesting out there that ties 45:12 into this is the tiny house movement 45:14 yes where people are saying you know 45:16 what I don't need 3,000 square feet of 45:18 in suburbia i can get by on 300 square 45:22 feet on this nice little piece of land 45:24 of the garden decided and solar panels 45:26 on top can be debt-free right and and 45:29 that right there is something that if 45:32 you do that you almost guarantee that 45:37 you'll be okay in in the next decade no 45:39 matter what happens because of what we 45:41 know if you can grow the food on the 45:43 side you've got a pleasant space to be 45:46 and it doesn't cost too much of anything 45:48 and you've got electricity from solar 45:50 panels and also your largely 45:52 self-sufficient and you know so what 45:56 let's let us have 10 years of political 45:58 chaos and bank stocks crashing and you 46:01 know the stock market falling apart but 46:03 that's okay because you will be alright 46:05 you know you and your family will we'll 46:07 get through it 46:07 exactly well and we've been speaking 46:11 with mr. John rubino and you can find 46:14 all of John's great work 46:16 over at dollar collapse dot-com and you 46:19 can also he has the he's authored on two 46:23 different books and i'll put the links 46:25 to those books in the description below 46:28 the video and John certainly appreciate 46:31 all your time today this has been great 46:33 sanctuary enjoyed it 46:37 well we will do this again a lot more 46:40 sooner than later and i look forward to 46:44 speaking with you very soon 46:46 great take care you two

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...