On today's show, Glenn Beck is joined by his good friend Carol Roth to discuss the ongoing government shutdown, the Arab-Israeli peace deal, and much, much more. Glenn also discusses the latest in the financial markets, including the Dow hitting new records and gold hitting new all-time highs.
00:07:49.760Because I think, you know, I would, I, my argument would be the border probably, but, and I do think this second term, the border has been an overwhelming, unquestioned success.
00:08:01.440But, like, I think the basis for what happened here was set in the first term.
00:08:25.560And people have accused him of that, of course.
00:08:28.580They always say, you know, warmonger and all these other things.
00:08:30.720I think he really does believe that to his core.
00:08:34.260And the only reason I think this stuff might be possible, and again, with all disclaimers aside for a moment here, because we do know this is a very difficult road ahead on this.
00:09:07.440But the basis for this even to be possible was set up in his first term with the improvement of relationships between these other Arab countries in the region and Israel.
00:09:17.180The fact that we think people are like, oh, what's Israel even giving up here?
00:09:21.360They are allowing, if this goes through, a bunch of these countries that for the past half century have attacked them every three years.
00:09:37.180Just since their founding have been attacked by these.
00:09:39.200A lot of these countries over and over again.
00:09:40.700And oftentimes in coalition with each other, they're allowing them to come in and if this goes down the road, oversee part of their own country.
00:09:51.980They are giving up a massive thing here and they only do that if they actually had some trust with these nations and of course, trust with the United States to help enforce it.
00:11:10.940He is playing three-dimensional chess.
00:11:13.360When he said that he knew that was the key there now, they're all saying now that was the key because, uh, when he did that with Qatar and defended Qatar and said, Hey, no play nice.
00:11:27.420And Benjamin Netanyahu did apologize that separated the United States from Israel as, you know, just a little, uh, you know, that we're all in it together.
00:12:16.620Uh, this is, you know, it's unequivocal here and this is a, uh, you know, you, you still have to get this over the finish line, but these are, uh, uh, incredible accomplishments.
00:12:27.080They're accomplishments that every, I mean, it has become for as long as I've been involved in politics and world events and cared about it at all.
00:13:23.280They'll guarantee the peace there because they'll have their money invested in it, in hotels and golf courses and whatever they want to do and make it the Riviera.
00:13:36.180That changes everything, all the dynamics, because now the, the, um, Egypt and Saudi Arabia and Jordan and Qatar and everything else, they're going to be pulling, pouring billions of dollars into it.
00:15:34.020It is a daily supplement that is specifically designed like ibuprofen and everything.
00:15:39.360I think they have two major ingredients that work on inflammation.
00:15:44.060This has four of the ingredients that are known to work.
00:15:48.420It combines them and it gives your body the ability to fight inflammation, which is what causes most of our pain and quite honestly, most of our disease as well.
00:15:58.840You got to get rid of the inflammation.
00:17:11.620You know, obviously, I think that the world, both investors and central banks, are catching up to the things that you and I have been talking about for years.
00:17:21.600So, you know, we were ahead, we warned everyone, and now this is a little bit of catch-up.
00:17:27.080Interestingly, you know, as you noted, the average American is very behind in terms of what gold means.
00:17:34.840When you look at Chinese households, when you look at Indian households, there are estimates that each one of those countries' households owns about up to 30,000 tons of gold at this point, which, to put that in context, the U.S. government owns 8,133 tons.
00:17:54.440So, the Indian households, all of them combined, 27,000 tons.
00:18:05.720So, the households in China and India are really ahead of the curve.
00:18:10.240When you look at data for the U.S., it's a little bit hard to get good data, but from what I've seen, the estimates are only about 10 to 11 percent of U.S. households at all have exposure to gold.
00:18:24.000Now, I know that your audience is very sophisticated and is ahead of the curve, and I would imagine blows through that number, but just shows how sort of unprepared U.S. households are, you know, in general.
00:18:36.560When you're looking at Indian and Chinese households that own gold, is that, does that include all the gold jewelry?
00:19:03.040So, there are a confluence of factors, and I think the two most important factors, which, of course, are linked, are what Wall Street is now calling the debt debasement trade, which they've just caught on to and gave it a cute name,
00:19:17.440and the changing global financial order, and those are very much linked.
00:19:23.460Tell me what the, what is it, the debt debasement, what is that?
00:19:27.120They're calling it the debt debasement trade, which is just basically what you and I have been talking about, which is our unsustainable fiscal position.
00:19:37.800And what all of the money printing that we've seen over the past, you know, 17 years, what that has done to our purchasing power and how that is going to catch up to us.
00:19:48.240So, as a reminder, you know, our debt to GDP is at emerging market crisis levels.
00:19:58.020We're running deficits that are equivalent to a wartime level or a recession level while we still have growth, which is crazy.
00:20:07.140We have interest rate that is outpacing defense, or interest payments that are outpacing defense spending.
00:20:14.300So, everyone is now finally catching on to the fact that this is an unsustainable financial position, and it is going to be very difficult to get out of without there being some sort of additional debasement of our currency, which is a fancy way of saying a diminishment of your purchasing power.
00:20:36.460What's really crazy, there's a chart that's been going around, and they did kind of a comparison of different asset classes priced in U.S. dollars and priced in gold.
00:20:46.700So, if you look from the end of September 2018, out seven years, and you look at the top 100 NASDAQ non-financial companies, it's called the NDX, in U.S. dollar terms, that is up 236%.
00:21:02.760So, you think you're super rich, right?
00:21:40.100In fact, right now, it takes less gold in terms of ounces to buy the median single-family house than it has in, you know, decades and decades and decades.
00:21:51.680So, it goes to show that even though we see these dollars, they're buying less and less.
00:21:57.920And now, you know, you and I have been talking about this forever, but now Wall Street is catching on.
00:22:04.340And so, in terms of preserving the hard-earned capital, we need something that is that hedge, that neutral hedge that's going to retain its value.
00:22:14.240And that's why more investors, institutional investors, funny enough, a lot of millennials, more than anyone, starting to really get into gold.
00:22:51.220And once you realize that system is rigged in a million different ways and the system is not telling you the truth, like, I mean, that is amazing.
00:23:00.020When you look at the stock market and you say it's actually down when you compare it in U.S. dollars to gold, what's happening is, let me explain this to the audience.
00:23:12.120What all that means is, gold is only going up in dollars.
00:23:46.620It takes more dollars to buy than it does with gold, which holds its value.
00:23:52.380That is, if people could understand that one thing, that changes all of the conversations of, the government's got to do something to make housing more affordable.
00:24:06.320They have to stop spending so much money.
00:24:08.840If you think of the three definitions of money, it is a medium of exchange, how you help to exchange goods.
00:24:18.780It's a unit of account, which we say things are priced in dollars, and it's supposed to be a store of value.
00:24:24.480The unit of account that you just talked about, my friend Steve Forbes has a great analogy, and he talks about other measurements.
00:24:31.880You know, imagine that your clock, you know, one day, you know, 12 o'clock means midnight, and another day, 3 o'clock means midnight, or 6 inches to measure a curtain one day, and then the same measurement is like a foot a different day.
00:24:48.760You can't have a consistent measurement if the unit of account continues to change, and that's what we've been seeing here with the dollar.
00:24:57.300And unfortunately, it has not been to our favor, which means that when you work really hard to earn something, and it's valued in a dollar, that over time, that work that you've put out, your productivity, is worth less and less.
00:25:12.760And so what gold is meant to do, it's meant to be capital preservation.
00:25:19.400It's not meant to take on risk and, you know, maybe go up a ton and maybe go down a ton.
00:25:23.820And it's really meant to be a counterbalance to what you have earned so that you can preserve your purchasing power.
00:25:30.900You know, I've been saying this for a long time, that, you know, you put your money, and I have money in the stock market, but you put your money in the stock market.
00:25:41.500You're going to cash out for an awful lot of money, but those dollars, it's going to be paid back to you in dollars.
00:25:47.620Those dollars will be worth less, even though there's more of them stacked up than that ounce of gold or that, you know, 10 ounces of gold or whatever you had.
00:26:04.000And so as the inflation goes up, but gold keeps its value, keeps its value and holds it steady.
00:26:12.620So, yeah, you're going to be paid more in dollars if you try to sell your gold, but that's going to continue to increase while stock markets will go down.
00:26:24.580So if things were to shift and for some reason, you know, things were to change with the dollars, which would need, you know, a lot of different catalysts, and then your gold goes down, it's a counterbalance, which is why it's important to have that diversification in your portfolio and to have the gold hedge.
00:26:42.040And what's interesting, Glenn, is just the history.
00:26:45.000We're talking about millennials, you know, they went through the Great Recession financial crisis.
00:26:49.300You know, they're kind of, you know, keyed into this.
00:26:51.640But if you think about when we came out of the 70s with this crazy inflation, we came out of the gold standard, it used to be, you know, very commonplace for a financial advisor to sit down and say, okay, we've been through this.
00:27:05.780And so you should be putting, you know, 5% to 10% of your portfolio in gold.
00:27:11.740As the stock market took off in dollars and became this big thing and they started seeking fees, that went away.
00:27:19.060And financial advisors who don't get paid sometimes at all when you allocate to gold stop recommending it.
00:27:37.380Yes, we've seen from big names like that anywhere from 10 to 20.
00:27:41.360And when they surveyed high net worth investors, which are $250,000 or assets or more, they're averaging right now 21% of their holdings in gold.
00:27:52.720So a very big flip in recent years on how this is being viewed by the people who have accumulated those dollars and are worried about that.
00:28:02.380Okay, so let me just summarize here before we move on to some other questions.
00:28:08.240That is exactly what my grandfather who lived through the Depression said.
00:28:11.660What are the people with big, large amounts of money doing?
00:28:34.700Some of the portfolios we're seeing, some of that is coming not necessarily from the equity piece, but from the fixed income piece, which is pretty interesting.
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