Stephen K. Bannon and Philip P. Packer join me in the War Room to talk about the end of the petrodollar empire, the rise of the Middle East, and why you don't need an MBA to be a financial genius.
00:01:26.460You've got to help me think this through because Philip and his team are kind of my co-authors of the research part where we do the end of the dollar empire.
00:01:34.180And I can't recommend enough of – we told you guys and I promised you if you watch this show that we will put out the information that you don't need to go get an MBA.
00:01:47.460If you need the ticket punch, you've got to get that fine.
00:01:49.480But we're going to put out enough information from my years at Georgetown, getting a master's in national security and getting an MBA from Harvard that we will put that information out there that you can – you'll absorb it over time.
00:02:03.080And have enough of a framework of how to ask questions and get to the bottom of things that really is what the business school is all about plus some rudimentary financial skills.
00:02:16.840Philip – and that's why the end of the dollar empire I'm very proud of.
00:02:20.700We've been two years, maybe two and a half years now of writing it.
00:02:24.060So we were ahead of this curve and warning people what was going to happen.
00:02:28.940Philip, I want to take you in this audience.
00:02:31.760I want to go to the United Arab Emirates this past week.
00:03:25.120And COP28 is really essentially a reparations conference of how to get money from the industrialized West, guilt trip them to sending the money to the third world through the phony hook of climate change.
00:03:40.280Abu Dhabi is about, I don't know, 50 or 60 miles up the road.
00:05:14.040And that is a stick that we have been using ultimately to beat them with.
00:05:18.320And I think they've gotten to a point where they said enough is enough.
00:05:21.560And like you said, at this point, they're willing to take some currency risk to de-dollarize because ultimately, longer term, it'll weaken the dollar.
00:05:29.380It'll weaken our strength on the international stage and it'll give them an opportunity to take some more control.
00:05:35.820So we're not aiding things domestically either.
00:05:39.380Right. On the back of global de-dollarization, Powell came out recently with some very dovish comments.
00:05:46.620Right. Ultimately, you know, he had a shot here to ease, you know, to push back against easing financial conditions and growth in risk on assets.
00:05:56.220And he blew it. And in my mind, you know, he told us that rates were well into restrictive territory, which assured that not only would there not be more rate hikes, but he contradicted his prior warning that it's premature to speculate when the Fed might ease.
00:06:11.520In other words, it's a clear signal to the world that the Fed is willing to sacrifice the dollar in order to prop up risk assets.
00:06:18.800You combine this with what's happening on the international stage and we're playing into the hands of Russia and China.
00:06:25.280We're making it an easy decision and actually, surprisingly, a sensible financial decision to start to de-dollarize.
00:06:36.380This is what and you got to the point, the first part was the geopolitical uncertainty out there.
00:06:44.200The second is because that's the two converging forces that's causes the financial risk and particularly the dollar as the prime reserve currency coupled with the geopolitical.
00:06:53.220So I hear around here all the time and I just want to go back and reemphasize what you just said, because this is what I'm hearing about, because you look at this jam that Biden, these guys are in and people say, oh, no, no, no.
00:07:04.880Their plan is and Powell's going to do it and they're going to just trash the dollar, right?
00:07:23.260We're not here to give personal financial advice, but those two macro things, a government that clearly now is so addicted to spending that they can't back off now because they're within a year of a general election, coupled with the geopolitical forces, most of which are being driven negatively by those same forces because they say, look, maybe MAGA has to suck on that.
00:07:45.500Maybe the deplorables have to suck on that because they're U.S. citizens, but we certainly don't have to suck on that, right?
00:07:51.460There's got to be an exit for us and they're looking for the exit.
00:09:19.120Even friendly nations, it is becoming a bad financial decision to hold on to the U.S. dollar.
00:09:25.500So domestic policy is playing into foreign policy, which is escalating the problem all around.
00:09:32.420So I've said for a while we're almost at the point of no return.
00:09:36.880The longer time goes on, the more true that feels.
00:09:40.060When you go back to Arthur Burns, one of the reasons to go to Birch Gold and get the end of the dollar empire, the fourth installment, we do debt trap, we do the politics of currency, we do the prime reserve currency, the dollars, the prime reserve currency.
00:09:54.620We'll get you up to speed and knowledgeable about all of it.
00:09:57.060The fourth installment is kind of shocking.
00:09:58.840In fact, the fourth installment is so shocking about how we came off really the gold standard, the convertibility of the dollar into gold over a weekend, just over a weekend in August, right, with Arthur Burns and these guys and Nixon.
00:10:11.780And the thing that shocks me when I keep talking about it, I talk about it in there.
00:10:15.820I've read every transcript of stuff coming over there.
00:10:17.640You never see Philip – you never see really talk about projections.
00:10:21.260They're not like – they're not sweating over mathematical models.
00:10:24.280It's kind of like all this rhetoric and discussion and big guys talking big talk, but I never see really a hard analysis and you think a second, third, fourth order magnitude problems.
00:10:36.560Arthur Burns and what Nixon's did, you said a decade.
00:10:39.620Remember, it destroyed really Carter's administration and Reagan came to power.
00:10:45.100Reagan came to power because fixing the economy.
00:10:47.040It wasn't even the international situation, which was bad and he had a solution.
00:11:18.320And with 34 trillion – remember, next week we're going to pass – or at the end of next week we're going to pass a trillion dollars from September 18th.
00:11:36.620And as you remember, I was sitting there going, no, that can't be right.
00:11:38.780Because I did – we did so many executive orders with President Trump.
00:11:42.600We kind of became experts on how they're issued.
00:11:45.100This thing – this thing that's taken us off the gold standard was just an executive order.
00:11:48.800In fact, they had to use the – what's called an emergency executive order because they couldn't go to the Office of Legal Counsel.
00:11:54.820All executive orders, including the ones we did on the travel ban, go to the Justice Department, which has an internal law firm of like their top brains.
00:13:21.560Oh, by the way, effective – like before the markets opened, you no longer can convert the dollars into gold.
00:13:28.620It, like, was the biggest shock in history.
00:13:30.880And you say, well, naturally, if you do an executive order that has that long of a thing, you take it to a – you've got to make it – you've got to go and make it a law.
00:14:02.220What I'm going to ask you in the – excuse me, the second block is particularly for those people who are not gold bugs or people not familiar with it, the geopolitical forces, the financial forces, and we see it this week.
00:14:16.480Folks, unless we do our job on Monday and Tuesday, they're leaving Thursday or Friday, and they ain't coming back until January with, like, 10 days to go before, guess what, the next CR runs out.
00:14:28.280So the whole point is the converging forces of geopolitics, uncertainty, and, of course, really the financial irresponsibility of the ruling class of this nation.
00:14:58.280For War Room veterans, you know we have been all over this supply chain issue with China and medications and the active pharmaceutical ingredients.
00:15:10.980China has a stranglehold on us where there's a way to break that.
00:15:15.960I got an emergency medication kit from them.
00:15:18.460The FDA just declared a global shortage of medication and warned that critical antibiotics are in extreme short supply across the United States.
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00:17:10.940This young woman who's in the campaign with me, worked for me in 16 in the White House and state, decided afterwards she wants to be an entrepreneur, goes out and does this amazing beef out there in Wyoming.
00:17:21.240We always try to give you access to the best.
00:17:23.620And the Birch Gold guys have been just terrific.
00:17:25.280And working together, one of the first things we said is, let's try to explain this to people.
00:17:29.380You don't need to assess, but you've got to just explain the forces that are out there in the world and why gold.
00:17:35.660And particularly, I said, hey, if guys are not gold bugs or particularly guys are not the Ron Paul set, right?
00:17:50.320I said, let's just explain how we got here and why gold has been a hedge.
00:17:56.500Because one inconvertible fact, incontrovertible fact, is that gold has been a hedge against turbulent times in mankind's history.
00:18:05.560You always see it revert back to that.
00:18:07.100So why is it – why are we now, in your professional opinion, Philip, at an all-time high?
00:18:14.440Particularly now we live in a different world in the Middle Ages or ancient Egypt or the Roman Empire or even the British or the Spanish, you know, when they were getting all the silver.
00:18:24.160Now you're in a world of almost perfect information, right?
00:18:37.040One of the things we try to do on this show is to make sure that we can actually give you a structure in how to think about it.
00:18:43.660So then you can put the information in and kind of have some ability to get knowledge, wisdom, and understanding and discernment.
00:18:51.760So in your mind, having been – dedicated your life to this, why are we at an all-time high?
00:18:58.340And where do you – I understand you don't predict where gold is going to go.
00:19:01.100But just those forces that are driving this, where do you see them going?
00:19:06.160Look, I mean, sadly for the nation, it is a perfect storm in terms of the drivers for gold price.
00:19:14.040We're talking a lot about the problems that we have, right?
00:19:17.220Leading up to this year, we were dealing with an inflation problem we still have today.
00:19:22.980We're seeing, you know, markets right now that are looking shaky at best.
00:19:27.200We're dealing with a world that is currently running away from the dollar in their droves.
00:19:32.240These things, of course, all very negative but very positive drivers for safe haven commodities like gold and silver, particularly when we look at what's happening with the dollar, right?
00:19:43.580Nations around the world are watching the Federal Reserve printing money into oblivion, devaluing the dollar.
00:19:49.340And, of course, even for those friendly nations out there that are holding dollars to trade, it becomes a significant issue.
00:19:56.480If the dollar has lost 16% purchasing power in the space of three years, it starts to become a problem for nations and their reserves.
00:20:04.160So we've been seeing globally a flight from the dollar, and, of course, there are very few safe havens in climates like this, and gold is picking up a lot of that.
00:20:27.920So given where we are, given what's in front of us next year, I think we could see a very strong year for gold.
00:20:34.720And it's a reflection of, like I said, all of the very tough stuff that we're dealing with economically.
00:20:40.300So every cloud has a silver lining, and I would say gold is that.
00:20:44.420But the real price of gold being at over $3,000 was towards the end of that, towards the end of what Volcker and Reagan had to do to take all the problems out of the system, which those two guys were heroes because they took so much incoming.
00:21:02.060I also want just one last thing for people to know, and this is a constant, and we're seeing this, quite frankly, on Speaker Johnson.
00:21:08.080They should never leave this week with this financial crisis and not addressing the spending.
00:21:15.100You know, people said at the time that if they went off the gold, that the guns and butters policy of basically Johnson, the Great Society being the butter, the guns being Vietnam, that Nixon wanted to continue that.
00:21:31.020One of the things we know is an incontrovertible fact from what they did in 1971 over that August weekend is they did take off the controls of people.
00:21:40.460As long as the dollar was the prime reserve currency, as long as the American empire was out there all over hell's half acre, backed up by American military muscle, and that would be the sons and daughters of this audience and many of the people in this audience, that you could continue to print money.
00:21:57.340And that's why what's happening in UAE, that's what's happening in Saudi Arabia when these quote-unquote allies are telling you because you're destroying them financially that they got to get – somehow they got to get off the petrodollar.
00:22:08.060That shows you that all fiat currencies essentially, if you look at world history, always end up like this, don't they, Philip?
00:22:17.440Every prime reserve currency, whether it's the pound, the Spanish, what, the bloom, all of them, they all end up being – they all end up at the end of the day in the same situation.
00:22:28.620It's absolutely – and by the way, that is with no exception.
00:22:35.100And as you know, and I've mentioned it before, but when Nixon took us off the gold standard in 71, it was the first time in history that a global reserve currency had not been supported by gold.
00:22:47.020And nations around the world came to the U.S. in delegations and they said, look, if you do this, what is going to prevent printing money, devaluing currency, basically the situation we are today?
00:22:59.120And the response at the time, again, I think I've mentioned before, was very famous.
00:23:05.440And Connolly said, listen, the U.S. dollar is our currency, but it's your problem, right?
00:23:09.820And in 1971, the point is there wasn't a great deal anyone was going to say to that.
00:23:15.440But the problem now, 50-odd years down the line, is twofold.
00:23:20.740Number one, the key to a global reserve currency is that it is a stable store of value.
00:23:26.320Well, the dollar losing 16% in three years, that argument starts to weaken.
00:23:31.380Secondly, if you want to act as the world's policeman and you use your currency as a weapon one too many times, there's going to be a point when the world turns around and says, eh, enough is enough.
00:23:43.200And my fear is that we've reached that point.
00:23:46.100Now, I think the drop in purchasing power, the Saudis and the UAE understand it, and using it as a weapon, I kept telling people, that's a silver bullet.
00:25:41.620And back then, as Connelly said, it's our currency but your problem because we were a financial and we were a manufacturing superpower, a superpower.
00:26:30.520One thing that is republic ending is the spending because you can't – you get to a certain level, you can't pull it back.
00:26:37.840That's what I was explaining right now.
00:26:38.980Do you notice nobody else talks about except this show that on September 18th we passed $33 trillion and by December 18th we're going to pass $34 trillion.
00:26:49.420Within 90 days we're going to add $1 trillion.
00:27:23.320That means every five months another trillion dollars.
00:27:26.940You can't – for this audience to understand, we will never pay off, nor your children, nor your grandchildren, or if you're lucky enough, your great-grandchildren will never pay off one penny of the face amount of that debt.
00:27:42.080But the opportunity cost, the crowding out of – in the financial capital markets will be just paying the interest, which this show is the first to tell you.
00:27:51.840It's going to be a trillion dollars, and now I'm telling you it's going to be $1.25 trillion a year.
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00:47:45.320That's why the bandits, the cyber bandits, coupled now with artificial intelligence, are looking at that $6 trillion that's sitting there in net worth of the nation's housing stock.
00:48:41.580Here I am a little older, a little wiser, a whole lot bolder, and I got something to say.
00:49:09.360In this world that we live in, there are secrets that I hid, and I can tell you why, but you've got to believe, you've got to believe, believe.
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