TRIGGERnometry - Jim Rickards： Recession is Coming

00:00:00.560 The first question comes to me, which is what's next.

00:00:02.960 Disinflation may be deflation.

00:00:04.960 Where's your dry powder if you actually did have a big war tomorrow with China invading Taiwan?

00:00:09.800 Are you going to take it up to 200%?

00:00:12.040 And by the way, 130%, who's at that lunch table?

00:00:15.200 It's Lebanon, Greece, and Italy.

00:00:17.960 I mean, is that the group you want to be having lunch with in the cafeteria?

00:00:22.520 I mean, the food would be good.

00:00:24.000 So you're saying to diversify, which is, obviously, you've said gold,

00:00:28.400 you've said cash, particularly in the case of deflation,

00:00:31.280 and you're saying stocks and options.

00:00:32.720 Now, there's a lot of people who would look at things like Bitcoin

00:00:37.200 and would look at digital currencies.

00:00:39.360 Look at Jim's face.

00:00:42.200 It's kind of thought control, because using inference,

00:00:45.920 I can tell by what you're reading, what you're buying,

00:00:48.000 what you're attending, et cetera, kind of what you're thinking.

00:00:51.960 Combine that with artificial intelligence and GPT technology,

00:00:56.280 and now you've got a target on your back

00:00:57.720 and expect a knock on the door from the FBI goon squads.

00:01:00.240 Well, you've got to get rid of cash and crypto,

00:01:02.680 herd everybody into the digital world,

00:01:04.280 and then you can whack them politically, and that's what's going on.

00:01:06.800 People are more obedient than I would have expected.

00:01:09.480 And so if those two things are true,

00:01:10.760 then you run the climate change playbook,

00:01:13.400 and you get world control.

00:01:15.640 Hello and welcome to Trigonometry on the Road from the USA.

00:01:29.600 I'm Francis Foster.

00:01:31.160 I'm Constantine Kissin.

00:01:32.320 And this is a show for you if you want honest conversations with fascinating people.

00:01:37.680 Our brilliant guest today has been on the show about 57 times.

00:01:41.080 At this point, he could be the chief economic correspondent for Trigonometry.

00:01:44.760 Jim Rickards, welcome back.

00:01:45.880 Thank you, Constantine.

00:01:46.720 Great to be with you.

00:01:47.280 You are, of course, an author,

00:01:49.400 and we're going to talk about your latest book and everything else.

00:01:52.120 As we were joking before we started, you're always full of optimism and cheer.

00:01:55.960 Your latest book is called Sold Out, How Broken Supply Chain, Surging Inflation,

00:02:00.360 and Political Instability Will Sink the Global Economy.

00:02:03.480 It's good news.

00:02:04.200 Yeah.

00:02:04.520 It's all good.

00:02:05.800 And you are known, at least to us, as the author of a number of books which predict some

00:02:10.840 pretty bad things.

00:02:11.800 Sure.

00:02:12.280 And, you know, a few of the times you've been on the show during the pandemic, I remember

00:02:16.440 we had you and our good friend Pippa Malmgren on the show, and you both said inflation is coming.

00:02:21.720 Right.

00:02:22.840 Inflation is here.

00:02:24.520 What's coming now?

00:02:25.320 Well, we're actually heading into something, disinflation,

00:02:31.000 definitely, but maybe even deflation is the opposite, at least for the time being.

00:02:34.440 Inflation is the end game.

00:02:35.560 It has to be, because there's no way out from under the debt.

00:02:39.080 But right now, people are still worried about inflation.

00:02:41.240 Prices are still going up.

00:02:42.760 I put gas in my car just like everyone else.

00:02:45.080 I'm well aware of it, eggs, bacon, you know, et cetera.

00:02:48.280 But inflation has been coming down steadily since June of 2022.

00:02:53.560 So about seven months in a row, eight months in a row, it peaked then.

00:02:59.000 We all know what gas prices were doing and so forth.

00:03:01.400 But the reason is kind of interesting, and it does go to the book and the supply chain

00:03:05.880 disruption.

00:03:06.920 Inflation anomaly, prices are going up.

00:03:09.560 Okay, so that's inflation.

00:03:10.760 But it can come from two sources that are opposite.

00:03:13.640 One is from supply side shock, supply chain disruption.

00:03:17.720 That's what the book is about.

00:03:18.840 We saw that in 1973 with the Arab oil embargo over the Arab Israeli war at the time,

00:03:23.880 the price of oil quadrupled, et cetera.

00:03:26.120 That was a supply shock.

00:03:27.960 The thing about supply side inflation is it's self-negating.

00:03:31.240 It burns itself out.

00:03:32.200 So, you know, the old saying, and it's true, the cure for high oil prices is high oil prices.

00:03:37.720 In other words, when things get too expensive because of supply disruption,

00:03:42.360 people can't afford them, businesses close, you get layoffs, you go into recession,

00:03:46.200 and prices come down pretty quickly after that.

00:03:48.600 The other source of inflation is from the demand side.

00:03:51.400 And this is a completely different dynamic.

00:03:53.320 We saw this in the late 70s where, you know, prices are going up,

00:03:57.960 but people have some bargaining power.

00:03:59.480 So unions are on strike.

00:04:01.160 They're getting higher wages.

00:04:03.240 I worked at Citibank in the late 70s, early 80s.

00:04:06.280 They used to give us raises without asking.

00:04:08.040 They just say, here, here's another $20,000,

00:04:10.200 because they knew that the cost of living was going up.

00:04:12.360 We would all change jobs if they didn't pay us more.

00:04:15.080 So, but that feeds on itself.

00:04:17.720 So the supply side disruption tends to snuff itself out.

00:04:21.400 The demand side inflation tends to feed on itself.

00:04:23.880 It gets out of control.

00:04:25.080 And then we saw what Paul Walker did with interest rates in 1980, 1981, where he took it to 20%.

00:04:30.600 He caused a recession in terms of tight monetary policy to snuff out the inflation.

00:04:34.760 But otherwise, if you don't do that, that just runs away.

00:04:37.880 Now, the inflation we saw in 2022, late 2021, 2022, it was real.

00:04:43.320 It wasn't transitory, the way Jay Powell said.

00:04:46.520 And, you know, the price of gasoline doubled, more than doubled.

00:04:50.120 And all the other complaints you hear, you know, the filling up your Ford F-150

00:04:55.400 pickup truck went from $70 to $140, which for a lot of people,

00:05:00.040 that meant they couldn't eat or couldn't, you know, go out.

00:05:02.600 It was killing demand and, you know, entertainment, shopping, retail, a lot of other things,

00:05:08.200 which, again, tends to snuff it out.

00:05:09.880 So that has happened to a great extent.

00:05:14.120 Starting in June 2022, that was the peak and this inflation has been coming down.

00:05:18.040 Now, it's still too high.

00:05:19.080 The Fed's not done.

00:05:20.040 The Fed's not done.

00:05:21.400 We're going to see at least one more interest rate hike.

00:05:26.280 But they're going to leave one more on the table.

00:05:27.640 We'll see what happens in June.

00:05:29.000 I'm not forecasting June, but I would not rule out another interest rate hike in June

00:05:32.760 after the May hike.

00:05:34.280 So, because, and Jay Powell's like thinking, how many times do I have to say this?

00:05:39.160 He's given nine speeches since August 2022, August 26th at the Jackson Hole,

00:05:44.680 then September FOMC meeting, November FOMC meeting,

00:05:49.640 the end of November, a speech at the Brookings Institution, December FOMC,

00:05:54.040 congressional testimony, you know, et cetera.

00:05:56.120 And every time he said the same thing.

00:05:57.960 Inflation is job one.

00:05:59.480 We, you know, we've got to get unemployment up, believe it or not.

00:06:03.800 They, you know, we're going to have a recession and unemployment's going to go up.

00:06:07.160 Sorry about that, but we've got to get inflation under control.

00:06:11.080 And until we do, what's under control mean?

00:06:13.960 Well, it's 2%.

00:06:15.080 That's their goal.

00:06:15.880 Well, it's come down from nine to five.

00:06:19.640 Nice job.

00:06:20.360 But five's still a far cry from two, and it gets harder as you go along.

00:06:24.760 And they're searching for what they call the terminal rate.

00:06:27.720 So the terminal rate, no one knows what the number is.

00:06:30.440 I don't know because Jay Powell doesn't know.

00:06:32.200 But the terminal rate, by definition, is it's a rate that's high enough

00:06:36.760 that it brings inflation down on its own without further rate hikes.

00:06:41.160 Because so far, they've been raising rates, and inflation's been coming down.

00:06:44.520 Okay, that makes sense.

00:06:45.720 And they can keep raising rates, and it'll come down more.

00:06:47.960 But is there a level where, you know, we're there,

00:06:50.600 now we can sit tight, the famous pause, and inflation will keep coming down.

00:06:55.000 Now, you don't know because it's not a controlled experiment.

00:06:57.240 You can't, like, do it twice.

00:06:58.760 But they're getting close.

00:06:59.880 So whether it's five and a quarter, five and a half remains to be seen.

00:07:03.000 But that's the terminal rate.

00:07:04.760 But then Wall Street came up with this narrative.

00:07:07.080 Oh, yeah, as soon as they're done hiking rates, they're going to cut them.

00:07:10.520 This is the famous pivot we've been hearing about for over a year at this point.

00:07:15.000 No, as far as they're concerned, forget rate cuts in 2023.

00:07:18.360 Maybe mid-2024, we'll get back to you on that.

00:07:22.680 But there's one wild card in the deck, which is, that's the Fed's plan.

00:07:26.840 So I just gave you the Fed's game plan.

00:07:28.280 And it's not, you know, you don't need a crystal ball.

00:07:30.280 They tell you what they're going to do.

00:07:31.480 All you have to do is listen, although a lot of people don't.

00:07:33.880 Wall Street makes up their own version of that.

00:07:36.680 But the idea of rate cuts following hitting the terminal rate is,

00:07:41.960 well, rate cuts go down, so dividends are higher, so buy stocks.

00:07:45.160 You know, Wall Street's always buy stocks.

00:07:47.080 That's the, that's always the punchline.

00:07:49.320 But they might cut rates late in the year, not because it's their plan,

00:07:53.480 not because they want to, but we could be in a very severe recession.

00:07:57.320 And that, at which point, because the Fed's always late,

00:07:59.720 you know, they're always following the market, they never lead the market.

00:08:02.920 If they've already raised, let's say they may already be at the terminal rate and not know it.

00:08:08.280 And so if they keep raising, which I expect they will,

00:08:11.880 they may throw this economy into a very severe recession,

00:08:14.440 at which point they may have to cut rates,

00:08:16.360 not because it's in the playbook, but because, you know, unemployment goes up to seven percent.

00:08:21.160 But that gets back to the first question, Constantine, which is what's next.

00:08:25.880 Disinflation may be deflation.

00:08:28.040 And you mentioned, however, that despite that,

00:08:30.760 and obviously, we'll talk about the short term.

00:08:32.360 And remember, Jim, most of our audience are not financial experts.

00:08:35.080 But so far, what they've heard from you is it's a very unstable situation.

00:08:39.880 It's going to go fluctuate wildly from one end to the other.

00:08:42.760 Right.

00:08:43.080 We're probably going to have a recession and inflation is coming down now,

00:08:47.240 but the interest rates are probably going to stay quite high.

00:08:49.240 Correct.

00:08:49.640 Right.

00:08:49.880 So that's the consumer takeaway from what you've said.

00:08:52.920 But the longer term thing, and this is a recurring theme of our discussions,

00:08:57.720 you said right at the beginning of your answer, which is inflation is the only solution to the

00:09:03.240 problems that we've built up.

00:09:04.520 Sure.

00:09:04.840 Which is we have these gigantic debts, both the US and the UK.

00:09:10.280 There's just no other way to pay off, particularly given the gridlock of our political system,

00:09:14.840 where we can't ever seem to cut spending because cutting spending, quote unquote, kills people.

00:09:19.000 Right.

00:09:19.960 Well, we actually had a pretty good track record of cutting spending for the first 220 years.

00:09:24.440 Right.

00:09:26.280 Alexander Hamilton invented the government bond market.

00:09:28.520 And the debate at the time was, the United States is formed.

00:09:31.480 We have a constitution.

00:09:32.440 George Washington is sworn in.

00:09:34.280 But we had all these revolutionary war debts where we issued all these IOUs to fight the revolutionary war.

00:09:39.320 And they couldn't be paid.

00:09:40.520 So the question is, what do we do with the revolutionary war debts?

00:09:42.600 So the Congress naturally said, screw them.

00:09:44.760 We're not paying that. 0.98

00:09:45.960 That was a different country.

00:09:47.320 We're now the United States of America.

00:09:49.640 It's the American way.

00:09:51.560 But Alexander Hamilton said, no, here's what you do.

00:09:54.520 Borrow more money, pay off the debts, you'll have good credit.

00:09:58.600 And when the new money comes due, you can borrow more and pay that off and just keep going.

00:10:03.080 In other words, credit is more valuable than, you know,

00:10:06.280 writing off a bunch of creditors at one time because you ruin your credit.

00:10:11.560 So he said, borrow more and establish your credit and then just keep it going.

00:10:15.400 And that was the creation of the government bond market.

00:10:17.800 And it's been going strong for 230 years.

00:10:20.840 But I studied this and the pattern was very consistent.

00:10:25.080 The United States would run up the debt to fight a war, every war.

00:10:29.080 War of 1812, obviously the Civil War or some Mexican-American War, Civil War, Spanish-American War, World War I, World War II.

00:10:36.360 Every time we ran up the debt, we fought, we paid the war, paid for the war, won.

00:10:42.200 And then after the war, we took the debt back down again.

00:10:45.480 So it was never, it never went straight up.

00:10:47.320 It was not a straight line from George Washington to Joe Biden.

00:10:50.520 And it's a sign way, up and down and up and down.

00:10:53.400 We did a very good job of paying off the debt in times apiece.

00:10:56.760 So you'd have dry powder in effect, so you could run up the debt in wartime.

00:11:01.480 And the classic-

00:11:02.200 So it's a tool.

00:11:02.760 It's a tool you use to deal with the challenges of the moment.

00:11:06.280 But then the most important thing is you put the tool back in the box and you polish it and you get it ready for the next time.

00:11:12.800 Correct.

00:11:12.880 Sharpen it up, sharpen it up, get it ready for the next time.

00:11:15.280 And that's why there's so much confusion about John Mayer Keynes.

00:11:18.440 I believe Keynes was maybe the best or second or third best, after Irving Fisher maybe, economist of the 20th century.

00:11:27.240 But Keynesianism is bankrupt.

00:11:29.160 Neo-Keynesianism was really bastardized by Paul Samuelson at MIT after the World War II.

00:11:35.000 Keynes died in, I think, 1946.

00:11:38.200 So Paul Samuelson and others, the big brains at MIT, they had spent World War II as logistics experts,

00:11:44.840 doing linear programming, this is before computers.

00:11:47.400 They had some machines, but, you know, we're not D-Day.

00:11:51.080 Okay, where are the supplies coming from?

00:11:52.360 Where's the fuel coming from?

00:11:53.800 Where's the ammunition coming from?

00:11:55.880 What's the best way to deploy bombers, et cetera?

00:11:59.320 And they solved all those problems.

00:12:00.440 So then, in peace, they said, well, we can take all those wonderful tools we developed to win World War II

00:12:05.240 and apply them to economics and we'll start with Keynes, but we'll actually turn it into a machine.

00:12:09.240 We can fine-tune the economy.

00:12:10.840 I remember the phrase from the 60s.

00:12:12.600 No more recessions, they used to say, because we can fine-tune the economy.

00:12:15.720 That was all before it ran off the rails in the 1970s.

00:12:18.520 I don't blame Keynes for that, because he was not an ideologue.

00:12:22.360 He was a pragmatist.

00:12:23.960 He believed in doing whatever worked.

00:12:25.800 And in a depression, in a liquidity trap, when people were hoarding money, hoarding gold, not spending it,

00:12:32.120 he said, well, if people won't spend, the government can and get the economy moving.

00:12:36.280 But then he was the first one to say, yeah, once you get there, pay it back and you'll let the economy run on its own.

00:12:42.280 Same idea.

00:12:42.840 So the classic case, end of World War II, the U.S. debt-to-GDP ratio.

00:12:47.640 By the way, Constantine, people said we have a big debt.

00:12:51.080 You know, if you throw out $25 trillion, $31 trillion, these are-

00:12:55.560 No one understands this.

00:12:56.680 Well, they don't, but I don't care.

00:12:59.000 And here's what I mean by that.

00:13:00.360 The number doesn't mean anything.

00:13:02.440 What you have to calculate is the debt-to-GDP ratio.

00:13:05.640 What is your payment ability?

00:13:06.840 So I say, if I owe $50,000 on a MasterCard and I'm making $20,000 a year, I'm probably going broke.

00:13:13.640 If I owe $50,000 and I'm making half a million a year, I can write a check.

00:13:17.880 So in other words, the debt can only be considered dangerous or not in relation to the income.

00:13:23.000 So you want to look at the debt-to-GDP ratio.

00:13:25.560 In 1945, the U.S. debt-to-GDP ratio was 120% all-time high.

00:13:30.200 What does that mean, Jim?

00:13:31.320 Well, it means that it's extremely high and you have to pay it off.

00:13:34.120 But my point is we won the war and we were a global hedge fund.

00:13:37.800 I remember being in elementary school.

00:13:39.720 The U.S. produces half the cars, three-quarters of the cars in the world, half the iron.

00:13:43.640 Like, hey, we have the whole thing.

00:13:44.840 We won the war. But then what happened next was even more interesting.

00:13:48.200 Between 1945 and 1980, that debt-to-GDP ratio went down from 120% to 30%, which is completely manageable.

00:13:56.840 And it was bipartisan.

00:13:58.520 You had Democrats like Harry Truman, JFK and Lyndon Johnson, Jimmy Carter,

00:14:02.680 Republicans like Eisenhower, Nixon and Ford.

00:14:05.720 It was not a partisan issue.

00:14:07.240 Everybody thought it was a good idea.

00:14:09.480 And then so along comes Reagan. He's handed a debt-to-GDP ratio of 30%.

00:14:14.760 Now, Reagan has his reputation as, you know, a tight-fisted conservative.

00:14:19.400 No, he ran it back up again to 50%.

00:14:22.680 But we won the Cold War and we won another war.

00:14:26.040 In 1989, the Berlin Wall comes down.

00:14:28.040 1991, the dissolution of the Soviet Union.

00:14:30.280 I know that was George H. W. Bush, but Reagan laid the groundwork with Star Wars and a lot else.

00:14:34.520 So, it's okay, he ran it up again, but we won the Cold War, which I never thought would end.

00:14:40.200 I thought, you know, next 50 years, be talking about the Cold War.

00:14:44.440 So, but then you're supposed to take it down again.

00:14:46.600 And that didn't happen under George H. W. Bush and Bill Clinton.

00:14:49.880 They didn't run it up, but they didn't take it down.

00:14:52.520 It stayed around 50%, 60%.

00:14:54.600 And even under George W. Bush with Iraq and everything else, it didn't go much above that.

00:14:59.960 But where it exploded was Obama and Trump and Biden.

00:15:04.600 So, Obama was handed about 105% between Obama and Trump.

00:15:11.720 They took it up to 131%, which is where it is now, and Biden as well.

00:15:17.080 So, they broke the mold, that 220-year mold I just described.

00:15:22.040 There were no existential wars.

00:15:24.200 Yeah, we're in a kind of a long-drawn-out thing in Afghanistan,

00:15:27.880 but it wasn't nearly as costly as the other things we're talking about.

00:15:31.400 The U.S. didn't win anything, by the way.

00:15:33.800 But they ran it up to 130%.

00:15:36.840 Now, that's first of all, the highest of all time.

00:15:38.920 Secondly, it broke the rule that you should pay it down in times of peace.

00:15:43.240 Third, where's your dry powder if you actually did have a big war tomorrow with China invading Taiwan?

00:15:49.160 Are you going to take it up to 200%?

00:15:51.720 And by the way, 130%, who's at that lunch table?

00:15:54.520 It's Lebanon, Greece, and Italy.

00:15:57.320 I mean, is that the group you want to be having lunch with in the cafeteria?

00:16:01.960 I mean, the food would be good.

00:16:04.520 There'd be no one to pay for it, though.

00:16:05.400 Well, actually, Greek food is pretty good, but yeah, maybe we could pay for it in lira.

00:16:10.360 But that's where we are.

00:16:12.120 So, this is unprecedented.

00:16:13.960 It's never been this high.

00:16:15.320 It breaks the pattern of running it up in war and paying it down in peace.

00:16:18.680 No one roots for war, but they happen.

00:16:21.160 And it's worse than that because of modern monetary theory.

00:16:26.520 And here's where my friend Stephanie Kelton comes in. 1.00

00:16:29.000 She's a professor at State University of New York, Stony Brook campus.

00:16:34.440 She's the big brain of MMT. 0.99

00:16:36.120 And she was economic advisor to Bernie Sanders when he was on the Senate Budget Committee

00:16:42.680 and in both of his campaigns, 2016, 2020.

00:16:46.520 Again, her book, The Deficit Myth, I highly recommend it.

00:16:49.080 I disagree with every word, but if you want to win the debate or you want to understand

00:16:54.040 what's going on, you have to read her book.

00:16:56.440 And I never put words in anyone's mouth.

00:16:58.680 These are her words.

00:16:59.480 She says, what's the problem?

00:17:03.160 The Fed can print unlimited amounts of money, which is true.

00:17:06.360 The Treasury can issue unlimited amounts of debt.

00:17:09.240 Not quite true.

00:17:09.800 You have to raise the debt ceiling, but it always has been raised,

00:17:12.120 so that's never acted as a constraint.

00:17:15.000 She says, right from her book, she said,

00:17:18.040 the only reason we have a bond market is to favor to investors,

00:17:21.320 to give them a place to put their money.

00:17:22.760 We don't actually need to borrow any money.

00:17:25.000 All you have to do, you want to buy 10 F-35 jets,

00:17:28.040 give the Fed wire instructions to Lockheed, just wire them the money.

00:17:32.360 What's this business up?

00:17:33.240 You know, issuing debt and having underwriters and primary dealers,

00:17:35.560 and Treasury gets the money, they deposit the Fed, and they pay Lockheed.

00:17:39.400 Just cut out all the middlemen, just have the Fed wire the money directly to Lockheed.

00:17:43.960 And so, yeah, and we don't even need a tax system.

00:17:46.680 We have it because we're trying to engineer income equality,

00:17:51.320 but we don't actually need taxes or bonds because we can just print the money

00:17:55.240 and send it wherever we want.

00:17:56.520 What's the problem?

00:17:57.800 Well, when you frame it that way, you actually start out agreeing with her.

00:18:02.040 I mean, I'm a lawyer.

00:18:03.080 I dealt with the Fed for decades.

00:18:04.840 I was once physically threatened by a Fed official.

00:18:07.480 He started to come across the table at me,

00:18:09.240 but that was back in the day where they were a lot tougher than they are today.

00:18:12.360 He's an Irish guy, very well known.

00:18:14.760 But I did what he said.

00:18:18.840 But the point is, the Fed actually can print unlimited amounts of money.

00:18:21.880 That is the law.

00:18:23.800 The Treasury can issue all the debt at once, subject to debt ceiling increases.

00:18:29.080 That's the law.

00:18:30.200 And you can send the wires.

00:18:31.960 So why not?

00:18:34.440 So this is one of these issues where I knew that it wasn't right.

00:18:37.880 I knew this was really bad advice.

00:18:39.320 I knew that modern monetary theory will fail.

00:18:42.200 But I didn't immediately know how to rebut those points because she's right. 0.99

00:18:48.360 So I said, well, the failure must lie elsewhere.

00:18:50.440 It must be not that you can't print the money or you can't send the money to Lockheed.

00:18:55.320 There must be something else.

00:18:57.000 And here's where I arrived at.

00:18:58.520 I was trying to crack the code on Bitcoin.

00:19:00.040 It took 10 years also.

00:19:01.160 People say, well, Bitcoin's not backed by anything or the dollar's not backed by anything or the euro's not backed by anything.

00:19:08.040 And I say, yes, they are.

00:19:10.040 They're all backed by the same thing, which is confidence.

00:19:12.520 Right.

00:19:13.080 If I think something's money and you think it's money and I tender it to you for goods and services and you think you're confident you can give it to Francis for goods and services and we have a large enough group, it's money.

00:19:24.680 Right.

00:19:25.240 It can be we were kids.

00:19:26.680 We did this with baseball cards and bottle caps, you know, so anything can be money if there's confidence.

00:19:31.960 But confidence is fragile.

00:19:34.760 It's easily lost.

00:19:35.960 And when you lose it, it's very, very difficult to regain.

00:19:38.840 And I've had this debate.

00:19:40.120 I've been in vaults in the Pentagon.

00:19:42.120 You know, we're doing a tabletop financial war game and make 10 people sitting around the table.

00:19:46.520 Here's the Treasury and the CIA and the three star general and, you know, a couple of think tank people.

00:19:52.920 And we're doing this.

00:19:54.600 And I told the Pentagon, well, the group, but including the Treasury, this seven or eight years ago because we were weaponizing the dollar against Iran.

00:20:03.080 Don't give me a start on Russia.

00:20:04.680 Well, actually, I'll start myself on Russia.

00:20:06.200 But the point is, I said, sanctions work to a point.

00:20:11.400 You're weaponizing the dollar, but you're doing it too much too frequently and you're relying on it too much.

00:20:16.120 And what's going to happen is you're going to drive people away from the dollar.

00:20:19.720 You're going to drive people out of the dollar system because they're not going to take it anymore.

00:20:22.920 I was, well, there's one guy who's sitting one place away from me.

00:20:27.400 There was somebody in between us.

00:20:29.400 He was a very senior Treasury official, specifically tasked with managing foreign exchange relationships with Asia, Japan and China, basically.

00:20:39.400 The senior guy, his name is actually David Dollar, but he takes both hands, slams him on the table.

00:20:45.880 He goes, the dollar is the global reserve currency.

00:20:49.880 It always has been the global reserve currency and it will always be the global reserve currency.

00:20:54.360 And I said, David, I feel like I'm in Whitehall in 1913 listening to John Bull say, you know, Sterling is the global reserve currency and it always will be.

00:21:02.360 And, of course, it was dead by 1944.

00:21:04.360 It started to die as early as November 1914 at the beginning of World War I.

00:21:08.360 So I've warned them, I've explained it to them, but now we're at the point where that's actually happening.

00:21:16.040 The kinds of things I described, so it's like you hit the punching bag, you hit it, you hit it, you hit it.

00:21:20.680 At some point, the punching bag gets up and walks away.

00:21:22.600 It's like, I'm not going to stand for this.

00:21:24.440 And the key thing, there's always a, you know, snowflake that starts the avalanche, as I've described, was when we froze the reserves of the central bank of Russia.

00:21:34.680 And there was a war on, got it, financial sanctions, yeah, they were probably inevitable.

00:21:39.240 But Russia's not Syria.

00:21:42.600 It's the largest landmass in the world.

00:21:45.560 It's the largest nuclear arsenal in the world.

00:21:48.760 It's the 12th largest economy in the world.

00:21:51.000 It has the best gold-to-GDP ratio in the world, which is another metric we can talk about.

00:21:56.280 But if you want to back up your economy with real money, their gold-to-GDP ratio is four times what the United States has.

00:22:03.720 The list of strategic metals, grain exports, oil, of course, one of the three largest producers, fertilizer, nitrates, et cetera, that they export.

00:22:13.160 And they're only one of only two countries, the other one being France, that will give you nuclear technology if you want to build a nuclear, not a weapon,

00:22:19.960 but a nuclear power plant.

00:22:21.160 The U.S. is kind of out of that game.

00:22:23.400 So it's not some punk country.

00:22:26.200 And they had over $150 billion in U.S. Treasury notes.

00:22:33.320 They've been getting away from them.

00:22:35.400 And Avira Nebulina, who's the head of the Central Bank of Russia, she's the only central bank in the world who knows her job.

00:22:41.720 She very prudently has quadrupled the Russian gold reserves since 2009, so 13, 14 years.

00:22:49.960 She's taken up from 600 tons to close to 3,000 tons.

00:22:54.200 They did it very transparently.

00:22:55.560 They had dealers in London.

00:22:56.600 They had standing orders.

00:22:57.560 They said, we don't want to disrupt the market.

00:23:00.120 By the way, don't try calling up and ordering 400 tons of gold.

00:23:02.920 You'll be, they'll just hang up the phone.

00:23:04.440 But, you know, 10 tons a month, sometimes 30 tons a month.

00:23:07.720 But for over 10 years, it added up to the position we're in today.

00:23:11.240 And guess what?

00:23:12.040 It's physical gold.

00:23:12.920 It's in safe storage near Moscow.

00:23:14.920 You can't, it's not digital.

00:23:16.360 You can't freeze it.

00:23:17.080 You can't seize it.

00:23:17.800 It's, it's, but it's money good.

00:23:21.480 But we confiscated or froze their U.S. Treasury securities, because they are digital.

00:23:28.360 There hasn't been a paper Treasury security since 1980.

00:23:31.880 And the ledger is maintained by the Federal Reserve and the Treasury.

00:23:36.280 By the way, keep that in mind when we talk about central bank digital currencies, because

00:23:40.200 you're back to who, who runs the ledger.

00:23:42.680 But for U.S. Treasury securities, that, that ledger is digital.

00:23:46.440 It's run in the United States.

00:23:48.680 You know, people, you know, we're in a debt ceiling debate right now.

00:23:51.000 The Congress is debating raising the debt ceiling.

00:23:53.640 And if you didn't do anything, you know, the ex-state, when the Treasury actually goes broke,

00:23:58.280 and we default on the debt, everyone's all spun up about this.

00:24:01.320 The U.S. defaults on the debt all the time, and people don't seem to notice.

00:24:06.840 If you're Russia, and you buy Treasury notes and bills in good faith, and they're supposed

00:24:12.120 to pay as agreed at maturity.

00:24:13.560 And all of a sudden, the issuer says, sorry, I'm not paying you.

00:24:17.160 If that's not a default, I don't know what is.

00:24:19.080 You know, it may be selective.

00:24:20.680 Maybe I'm just picking on you and not the whole market.

00:24:23.640 But that's a default. 1933, when Roosevelt devalued the dollar by 75% and took gold from

00:24:30.280 $20 an ounce to $35 an ounce, confiscated all the gold, and so paper money was no longer

00:24:37.160 redeemable into gold.

00:24:38.600 That's a default.

00:24:39.880 That's a default, because Treasury securities, at the time, used to have a gold equivalent,

00:24:45.720 and FDR just tore it up.

00:24:48.760 And then 1977 to 1981, inflation was 50%.

00:24:53.240 You know, all my Austrian libertarian friends go, well, since 1913, the dollar has lost 95%

00:24:59.240 of its purchasing power, which is true, but so what?

00:25:01.720 I mean, incomes are higher.

00:25:03.240 But there was a five-year period, not 100 years, where the dollar lost 50% of its purchasing power,

00:25:10.040 which meant if you held a bond, the real value of your bond was cut in half.

00:25:15.480 That's a default.

00:25:16.600 There's just lots of different ways to default, and the US does it all the time.

00:25:20.520 Getting back to your other question, Constantine, about inflation being the real endgame.

00:25:25.560 So anyway, so we pushed Russia, and by the way, Russia's held up very well. 0.99

00:25:31.560 Their economy is going to outperform the United States in 2023, according to the IMF and others,

00:25:37.000 the World Bank, the RuPaul is strong.

00:25:42.360 It was, for a long time, stronger than it was before the war.

00:25:46.840 So they're feeling the pain.

00:25:48.760 I'm not saying there's no pain at all, but they're getting through it brilliantly,

00:25:52.120 and they're going to outperform the US this year.

00:25:55.000 But the rest of the world took notice.

00:25:57.080 So let's say you're China, or Saudi Arabia, or Turkey, or Brazil, and these are major countries.

00:26:04.440 They're saying, hey, the US just froze the reserves of the central bank of Russia.

00:26:08.920 What if Janet Yellen gets out of the wrong side of the bed? 1.00

00:26:12.200 And, frightening thought, but says they don't like me.

00:26:16.040 They don't like my policy.

00:26:17.000 They don't like what I'm doing in Taiwan, or the Kurds, or women's rights, whatever. 0.98

00:26:25.480 Pick a topic.

00:26:26.520 They could do that to me.

00:26:27.560 And so, people are like, okay, now we really do have to get out of the dollar.

00:26:32.520 Not as an economic matter, but as a national security matter from their perspective.

00:26:37.560 So, Jim, we've been talking at the macro level now, but I want to focus in on the ordinary American,

00:26:44.840 the ordinary British person.

00:26:46.520 They're looking at an economy which is lurching, like you said, from one extreme to the other.

00:26:52.120 Right.

00:26:52.520 They're looking at their savings being depleted.

00:26:55.480 They're looking at prices going through the roof.

00:26:57.880 Mm-hmm.

00:26:58.360 What should they do in order to weather the storm that is coming within the next few months?

00:27:02.440 Well, there is a lot they can do, and I'm going to give you an answer,

00:27:05.800 and everyone rolls their eyes and goes, well, that's obvious.

00:27:07.880 The answer is diversification.

00:27:09.320 Everyone goes, oh, we know that, you know, diversification.

00:27:12.440 But they know the term, but they actually don't know what diversification is.

00:27:17.160 And I'll give you an example.

00:27:18.440 I run into people all the time that go, well, Jim, I'm fully diversified.

00:27:21.720 I have 50 stocks in 10 different sectors, telecommunications, semiconductors, consumer

00:27:27.000 non-durables, metals and mining.

00:27:29.560 And I go, you're not diversified.

00:27:31.320 You may have 50 stocks, but you're in one asset class called stocks or equities.

00:27:35.960 And they're all going to go up together, or they're all going to go down together.

00:27:39.080 And the more stressful the condition, the more reason you have to be concerned about it,

00:27:44.040 the higher the correlation.

00:27:45.240 You know, on any given day, some stocks go up and the stocks go down.

00:27:48.040 But when you dial the stress meter up, they all tend to move together.

00:27:52.120 So that's, I don't care about your 50 stocks or 10 sectors.

00:27:55.240 That's not diversified.

00:27:56.840 So what does real diversification look like?

00:27:59.160 Have a sleeve of equities if you want.

00:28:00.840 That's fine.

00:28:01.720 I would say I look hard at oil and natural gas, natural resources, agriculture.

00:28:07.240 Again, kind of equities that have hard assets behind them that will do well in inflationary times

00:28:13.080 or even in recessionary times because you need all those things no matter what.

00:28:18.600 Then a slice of real estate.

00:28:19.720 You know, I wouldn't be in commercial real estate, but, you know, residential real estate,

00:28:23.960 income producing real estate, farms, et cetera, that's good.

00:28:27.080 I have a big slug of cash.

00:28:29.800 And people go, well, cash doesn't have any yield.

00:28:31.720 Well, lately, you can get 2%, 3%, you know, and like a CD.

00:28:37.720 But even in a simple savings account, you know, it is quite low.

00:28:43.000 It's kind of less than 1%.

00:28:45.000 But people don't understand the value of cash in a couple of respects.

00:28:48.920 Number one, in a deflationary environment, we're not there yet, but we could hit that if

00:28:53.720 the recession gets bad enough.

00:28:55.640 Cash could be your best performing asset.

00:28:57.720 It doesn't go up in nominal terms, but it goes up in real terms.

00:29:00.760 If you have 2% deflation, your cash is worth 2% more in terms of purchasing power.

00:29:06.360 But the real value of cash is optionality.

00:29:10.440 And this is not well understood.

00:29:12.280 I shared an office with Myron Scholes for six years, so I see options under the pillow,

00:29:17.160 so to speak.

00:29:17.720 But if you're the one with cash, when things, first of all, it'll definitely preserve wealth.

00:29:24.360 So if things are falling all around, your cash will be what it's worth,

00:29:26.920 unless you're in Silicon Valley Bank.

00:29:28.360 It's a separate issue, although they got bailed out.

00:29:31.960 But so it'll preserve wealth, even if it's not a high performer.

00:29:35.560 It'll do very well in deflation.

00:29:37.080 But the real benefit is when everything else is falling apart,

00:29:40.040 you're the one who can go shopping.

00:29:41.880 So it's kind of an at-the-money call option on every asset class in the world.

00:29:46.600 Everyone's selling everything in a panic.

00:29:49.400 You can buy your time, watch it go down, look for a bottom, and then say,

00:29:53.080 okay, now I'll buy these things down 30% or 40% or 50% from where they were.

00:29:59.720 Some alternatives.

00:30:00.680 I have a number of investments in private equity and venture-type situations.

00:30:07.720 And yeah, they're risky, and they're not liquid.

00:30:10.680 But some of them will do very well.

00:30:13.000 Some of them have done well, so that's nice.

00:30:15.880 And then a slice of gold.

00:30:17.720 And I recommend 10% because people, you know, they put words in your mouth.

00:30:22.360 They go, Jim Riggs says, sell everything and buy gold.

00:30:24.520 I've never said that.

00:30:25.400 Not a good strategy.

00:30:26.680 But 10%, yeah.

00:30:28.440 First of all, there's your inflation hedge.

00:30:31.720 But also, it's a money hedge, meaning if, going back to what we said earlier about confidence.

00:30:37.800 See, I've said all along that Russia, China, Iran, you know, I don't care who they are, 0.89

00:30:43.720 they can't destroy the U.S. dollar, but the U.S. can.

00:30:48.280 We are our own worst enemy.

00:30:49.880 Janet Yellen is the greatest enemy of the dollar because of the way she's throwing sanctions around. 1.00

00:30:53.720 She may destroy confidence.

00:30:56.680 And the reason, like, hey, if the dollar is so shaky or, you know, there's all this downside

00:31:03.640 by being invested in it, why don't I go to another reserve currency?

00:31:07.640 There aren't any.

00:31:09.000 This is a key distinction that gets glossed over in the debate.

00:31:14.040 You see people on TV all the time talking about, you know, Saudi Arabia's doing a Chinese Yuan deal

00:31:19.960 with China or Brazil's doing a bilateral deal with China and, you know, and Yuan and rice,

00:31:25.960 and there's no dollars involved.

00:31:28.200 But they, and that's the end of the dollar as a reserve currency.

00:31:31.640 People are not, people do not distinguish between a payment currency and a reserve currency.

00:31:36.600 Two different things.

00:31:37.880 Payment currency is anything you're willing to accept or I'm willing to accept.

00:31:41.800 And it's important.

00:31:42.840 And that, that's where the dollar's under attack.

00:31:45.560 Watch what happens in August.

00:31:46.680 The BRICS Plus, they've got a 19-member waiting list.

00:31:49.880 They're going to be more than half the global population, more than half global GDP in a matter of months.

00:31:55.560 They are working on their own payment currency, payment channels, et cetera.

00:32:01.160 They haven't announced what it is yet, but they're working on it.

00:32:04.040 All these other countries I mentioned doing bilateral deals.

00:32:07.240 Shanghai Cooperation Organization is working on an alternate currency.

00:32:11.480 But all those deals are payment currencies.

00:32:14.440 And again, you can use baseball cards if everybody's in on the deal.

00:32:18.360 Reserve currency is different.

00:32:19.720 Because there actually are no reserve currencies.

00:32:22.360 You know, People's Bank of China doesn't have pallets of $100 bills in the basement.

00:32:26.840 It's a reserve is a security denominated in a currency.

00:32:33.000 So people say 60% of global reserves are in dollars.

00:32:37.000 They're in US Treasury securities denominated in dollars.

00:32:39.880 The key to the reserve currency is the security, not the dollar, although it is denominated in dollars.

00:32:45.240 But just holding on there a second, Jim, so you're saying to diversify, which is obviously you've said gold,

00:32:51.800 you've said cash, particularly in the case of deflation, and you're saying stocks and options.

00:32:56.200 Now, there's a lot of people who would look at things like Bitcoin and would look at digital currencies.

00:33:03.000 Look at Jim's face.

00:33:05.800 Now, I know you're a big Bitcoin guy, Jim.

00:33:08.920 You're a huge fan.

00:33:10.520 I'm a huge fan of, could you please explain to people why, particularly this applies to younger men

00:33:17.080 who see these types of cryptocurrencies as a shortcut to wealth and to generate money for themselves.

00:33:23.800 Right.

00:33:24.120 Why this might not be a good idea.

00:33:26.760 Well, sure, I've spent, I've been dragged into a whole bunch of gold versus Bitcoin debates.

00:33:33.240 And to me, it's like, you know, fish versus bicycles.

00:33:35.560 Like it's, they're two separate things.

00:33:37.320 Yeah.

00:33:38.600 But if I'm going to be the gold side and debate somebody on the Bitcoin side,

00:33:42.200 I'm going to be certain to know more about it than they do.

00:33:45.080 I don't want any surprises.

00:33:46.440 So I've actually studied Bitcoin from the beginning.

00:33:48.760 I read Satoshi Nakamoto's paper less than a year after it came out.

00:33:53.320 I've studied it very closely ever since.

00:33:57.000 And I, I guess it's been 10 years working on the problem.

00:34:02.920 Like there is no there there.

00:34:04.920 So, but I, I see the price action.

00:34:06.200 I know people who bought Bitcoin at two bucks and sold out at 20,000 and paid their taxes

00:34:12.760 like good citizens and walked away with $20 million.

00:34:15.640 You know, those, those stories are real.

00:34:17.160 There are also suicides from people who bought Bitcoin at $70,000 and went to 15 and they

00:34:21.880 hocked their inventory and they're out of business and, and, and committed suicide.

00:34:25.800 So that's the other side of the trade.

00:34:27.800 But yeah, the, the, the, the profit making stories are real.

00:34:31.160 We can all look at the price action.

00:34:32.760 It was $68,000 in November, 2021.

00:34:36.600 That was a real number.

00:34:37.640 I talked to Mark Saylor.

00:34:38.840 He was, he had made about 6 billion at that point.

00:34:41.640 I think he's, he was underwater briefly.

00:34:43.560 He's back up to a billion.

00:34:44.600 He lost 5 billion when it went down to 13,000.

00:34:47.880 That's, that's rallied recently.

00:34:49.400 I get all that, but, but I'm like,

00:34:51.320 what is it and why?

00:34:54.120 Um, so I've, I've come up with two explanations.

00:34:57.640 I actually, if I work on an issue for 10 years or so and I solve it, I, I, I move on.

00:35:03.560 I'm like, okay, I got, I don't have to think about it anymore.

00:35:05.640 Cause I solved the problem.

00:35:07.160 Um, and, uh, so, so here's the thing on, on Bitcoin, the best way to understand it.

00:35:13.560 If I go into, you know, the wind hotel in Las Vegas, I put, you know, $5,000 down the roulette table.

00:35:20.280 The coupier gives me a big stack of chips and I gamble and I could make money or I could lose money.

00:35:25.960 Uh, I know the, the odds and all that.

00:35:27.400 I'm working on a roulette system.

00:35:28.840 So does everybody, but, um, you can make or lose money, but let's say you make money.

00:35:33.000 Okay.

00:35:33.560 You can't take those chips and walk out on the boulevard and buy dinner.

00:35:39.720 You have to go to the cashier and change them for dollars.

00:35:42.840 And then you can take your dollars and treat your friends to dinner, whatever you want.

00:35:46.520 In other words, there's a portal between crypto world and the, and the main banking world or the

00:35:52.200 dollar world or euros or anything else that you have to go through in order to find any utility

00:35:57.560 in the sense of money.

00:35:58.680 Um, so, uh, I've, I've thought of it as a casino chip where the, the crypto world and Bitcoin,

00:36:05.560 I know ether and, and ripple and all these other ones.

00:36:07.800 Um, they're the casino.

00:36:09.560 You can go and put your dollars up, get your chips, gamble, make money or lose money, but

00:36:15.800 you can't go anywhere else.

00:36:17.320 You can't do anything else.

00:36:18.600 You're just in the casino.

00:36:20.200 And if you want to get out of the casino and back in the real world, you got to go to the cashier.

00:36:25.080 Now, interesting footnote on that on March 10th, the, uh, this is funny, the FDIC shut down

00:36:32.760 Silicon Valley bank and, uh, not to get too far afield, but when they did it, they followed the

00:36:39.080 Brisbane, Australia, November, 2014 bail in rules.

00:36:43.240 Remember after 2008, what happened in 2008, the fed bailed out everybody.

00:36:47.720 So Jamie Dimon kept his job.

00:36:49.400 All these guys kept their jobs.

00:36:50.680 They got their bonuses.

00:36:51.480 They didn't lose anything.

00:36:52.280 The stock market went down, but it came back.

00:36:54.440 Um, nobody was out accountable.

00:36:56.520 Nobody went to jail.

00:36:57.960 They all made more money than ever.

00:36:59.640 They kept their bonuses and the, and the taxpayers, you know, your everyday American or everyday,

00:37:04.920 uh, uh, a British subject is sitting there saying, wait a second, I financed this.

00:37:08.600 And you guys got rich and I didn't get anything except my retirement, uh, you know, accounts

00:37:14.120 sort of blew up.

00:37:16.040 So the elites were aware of that.

00:37:17.640 They said, we can't let that happen again.

00:37:19.240 There will be other financial panics.

00:37:21.080 So in Brisbane, the G20 came up with the bail in plan.

00:37:25.400 They said, okay, we're not going to do it with taxpayer money.

00:37:27.480 We can't.

00:37:27.960 The people won't tolerate it.

00:37:29.080 So when an institution fails, here's what happens.

00:37:31.320 Equity gets wiped out.

00:37:32.520 I'm saying I need bankruptcy.

00:37:33.640 Equity gets wiped out.

00:37:34.600 Bondholders get wiped out to the extent there's a hole in the balance sheet.

00:37:39.080 You might get 20 cents on the dollar or whatever.

00:37:41.400 And then we're going to turn to depositors.

00:37:43.560 And if you have an insurance scheme, we're going to pay the insurance.

00:37:47.000 250,000 in the U.S.

00:37:48.520 I believe it's 100,000 euros, um, in the EU.

00:37:51.640 Uh, UK has something similar.

00:37:53.400 We're going to pay that, but that's it.

00:37:54.840 And then we're going to whack the depositors and they're going to suffer.

00:37:58.280 And not until every, uh, every, uh, uh, credit or deposit or whatever has been hit,

00:38:04.120 will we even think about using taxpayer money.

00:38:06.760 So that's the bail in.

00:38:07.880 You, as the depositor, are bailed into saving the institution as opposed to a government bailout.

00:38:13.320 Well, there were no major failures between 2014 and 2023.

00:38:18.440 So here we are, March 10th, 2023.

00:38:20.920 The FDIC gets out the bail-in playbook and says, okay, uh, equity's gone.

00:38:26.200 Uh, uh, insured deposits are being paid 250.

00:38:29.560 Your money will be good Monday morning.

00:38:30.840 No problem.

00:38:31.720 And all you other depositors, you $140 billion of depositors, you're wiped out.

00:38:37.960 They didn't say we're freezing your accounts or we'll get, you know,

00:38:41.000 they said you're gone.

00:38:42.280 And, um, they gave them a receivership certificate,

00:38:45.800 because the company was technically put into receivership.

00:38:48.360 You got a receivership certificate.

00:38:50.440 Um, what was it worth?

00:38:51.880 No idea.

00:38:52.600 When do I get cash?

00:38:53.480 We're working on it.

00:38:54.360 We'll sell the assets and we'll pay you as and when we get proceeds, we'll pay you.

00:38:59.000 But we don't know when.

00:38:59.800 And the RTC in 1990, same kind of deal, um, took two years.

00:39:04.200 I thought they did a good job.

00:39:05.320 I was doing deals with the RTC.

00:39:06.520 We were sitting on boxes because their furniture hadn't arrived yet.

00:39:09.000 But they were, they were wheeling a deal and trying to get the stuff out the door.

00:39:12.200 Well, all the billionaire crybabies spent the weekend

00:39:15.240 banging on the White House doors saying, you know,

00:39:17.080 you can't do this.

00:39:17.960 This is entrepreneurs over Silicon Valley.

00:39:20.200 This is their startup capital.

00:39:21.480 They can't meet payroll.

00:39:22.360 They can't pay the rent.

00:39:23.160 You know, you're going to shut down technology, et cetera, et cetera.

00:39:25.960 Um, you can't do this basically.

00:39:28.280 So, um, the first announcement was six o'clock Friday.

00:39:31.720 At 6 p.m. on Sunday, the 12th,

00:39:35.240 the FDIC and the Fed came out with a statement and said,

00:39:37.640 just kidding.

00:39:38.600 All the deposits are good.

00:39:40.280 Unlimited amounts.

00:39:41.320 I knew a guy who was moving eight billion out of it.

00:39:43.800 He said, he told me, he said, we put the wire instructions in Thursday,

00:39:46.680 but from Thursday to Sunday, we didn't know where the money was and nobody did.

00:39:50.120 But it came through.

00:39:51.240 Um, one of the crypto exchanges had three billion in, uh, um, I think the circle,

00:39:58.680 uh, the one that backs, uh, uh, one of the stable coins, they had three billion,

00:40:03.400 but they're custody at Cisco, uh, Roku, um, uh, Etsy, uh, they had a ton of big names in there.

00:40:10.200 And then the whole startup thing was a bit of a fraud because first of all,

00:40:13.960 most startups fail anyway.

00:40:15.160 So you were just kind of accelerating the timeline, but, um, it was a climate bank.

00:40:20.200 And that's why the white house caved because these were not new apps or, you know,

00:40:25.240 cryptocurrencies or things that maybe make life a little bit simpler.

00:40:30.280 It was all climate change.

00:40:31.400 They were working on battery technology, wind turbines, um, you know, battery chemistry,

00:40:35.960 uh, carbon capture, et cetera.

00:40:38.440 There is no climate crisis.

00:40:39.720 That's, that's made up, uh, to, you know, we're on a separate agenda of world control.

00:40:45.960 Um, but that's who was in it.

00:40:47.320 And of course, if you're at the white house, the greener scam is your number one priority.

00:40:52.760 So that's why they got bailed out.

00:40:54.200 So, so they just took the bail in thing and tore it up, threw it away, uh, insured all the depositors.

00:40:59.640 They did more than that.

00:41:00.520 They, they, the fed created a facility.

00:41:02.440 They would take every underwater bond in the country if you're a member bank and give you par.

00:41:08.040 So if your bonds worth 80, they'll give you a hundred.

00:41:10.360 I wouldn't mind getting in on that deal, you know, for one year at low interest.

00:41:13.240 And I'm sure they'll extend it when the year's up.

00:41:15.800 So that's, that's kind of the world, um, we're living in today.

00:41:20.120 And then people don't know about if their deposits are insured or not.

00:41:23.800 You know, it depends if your bank's systemically important, according to Janet Yellen.

00:41:26.760 And that's undefined.

00:41:29.560 Right.

00:41:30.120 I was gonna talk about supply chains, but you did mention the, the, the non-existent climate crisis.

00:41:36.360 And that it's, it's a ploy for world control.

00:41:38.520 And this is what I, we hear this argument from people a lot.

00:41:41.640 And you, you and I had a few messages about my Oxford speech.

00:41:44.920 So you understand how I feel about, you know, if we're, if we're being told that that, you know,

00:41:49.400 carbon is the problem, why are we doing things that don't seem to really do anything about that?

00:41:53.480 So, so I get what you're saying.

00:41:55.320 But I always get wary when people get into this sort of like,

00:41:59.800 there's a, a group of people who secretly have an agenda.

00:42:03.400 Uh, now we see with the Davos people, whatever, they all believe this stuff and they all think it's

00:42:08.200 important and, and because they think it's important, they think, uh, a global problem

00:42:12.920 requires global solutions.

00:42:14.280 Correct.

00:42:15.160 But are you saying that these aren't just a bunch of, you know, slightly deluded,

00:42:20.200 well-intentioned people, but actually they don't believe the thing that they're saying in the first

00:42:23.880 place?

00:42:24.760 Some of them do.

00:42:25.480 The less intelligent ones do, um, you know, the John Curry's and the Al Gore's and, uh, um,

00:42:31.640 you know, then you got some true believers, uh, you know, Jillian Ted, you know,

00:42:34.920 knocked heads with her a few times, um, at the Financial Times.

00:42:40.040 Um, but some of them do, but the, the vast majority of Americans, and I would say people,

00:42:46.040 you know, Western Europe, maybe even more so, who buy into this, you ask them a simple question,

00:42:52.120 like, what percentage of the atmosphere is CO2?

00:42:55.560 I have no idea.

00:42:56.840 Um, do you know that CO2, the main reason it's around is plant food?

00:43:01.480 If you get rid of CO2, all the plants will die and we'll start it. No, I didn't think of that.

00:43:05.880 Uh, it's poison, really.

00:43:07.080 I just exhaled some CO2. Sorry.

00:43:09.080 I didn't mean to poison the room.

00:43:10.280 I mean, they, they, these people don't know anything about chemistry.

00:43:12.920 They don't know anything about physics.

00:43:14.360 They don't know anything about climate.

00:43:15.560 I mean, I am, I am a complexity theorist.

00:43:18.440 My, um, ability to kind of understand capital markets is based on applying complexity theory

00:43:24.600 from over here in the physics world, bringing it to capital markets.

00:43:27.320 There are complex dynamic systems, nonpareil, so, and it works beautifully.

00:43:33.400 But probably the most complex system you can think of is, is the climate, is climatology.

00:43:38.680 And so there's kind of a reign of terror going on in that world where, you know,

00:43:43.160 this, uh, guy at Penn State, you know, he's, his big thing, uh, is just to sue you if you

00:43:48.680 mentioned his name, uh, but, uh,

00:43:50.440 Well, let's not mention his name.

00:43:51.960 We're not as rich as you remember, Jim.

00:43:54.200 Well, yeah, he's, but he's backed by the state of Pennsylvania, so, um.

00:43:57.400 But we're not Jim.

00:43:58.280 Exactly.

00:43:59.960 So, but, but, but my point is, um, my point is they will, um, so you're an up and coming

00:44:06.040 climate researcher or physicist, whatever.

00:44:08.280 You will not get tenure.

00:44:09.640 You will not get published.

00:44:10.920 You will not get research grants.

00:44:12.440 If you deviate in any way from the narrative, which is that CO2 is poison, methane is poison,

00:44:18.920 there's, um, you know, if global temperatures go up, uh, whatever, 1.5 centigrade before a

00:44:25.000 certain time, the oceans are going to rise, New York City subways will be flooded.

00:44:29.000 None of that is true.

00:44:31.240 There is no evidence that shows conclusively that CO2 has anything to do with global warming,

00:44:36.840 number one.

00:44:37.880 Uh, you can speculate on it.

00:44:39.000 It is, it is a greenhouse gas.

00:44:40.360 It does trap, um, uh, heat.

00:44:43.240 But the system is so complex that other factors come into play that tend to, uh, that tend to

00:44:48.440 reverse, have recursive functions that tend to reverse whatever it was that started.

00:44:52.360 The causes of climate change are actually very well known.

00:44:55.880 Sun cycles, volcanoes, ocean currents, um, the location of the jet stream.

00:45:01.560 Um, there are, there are a set of factors, you know, La Nina, El Nino, uh, that, uh, you know,

00:45:08.040 oceanic subduction where, you know, cold, is it warm, more warm, saltier water from the Gulf

00:45:14.200 stream gets up near Iceland and, uh, it's, it goes under the fresh water, but sometimes it doesn't,

00:45:20.040 and then that'll make it warmer there and cause a jet stream to dip and be colder in Europe, etc.

00:45:26.040 The medieval warm period from around, uh, about the 10th century to the, uh, 12th century,

00:45:33.080 they were growing grapes in Greenland.

00:45:34.840 I mean, they had farms, they had colonies, and then today they're all under ice.

00:45:38.920 The Little Ice Age, which wasn't a true ice age, but it was an intense period of global cooling,

00:45:44.520 the Thames was frozen.

00:45:45.560 They didn't need the bridges.

00:45:46.360 You could walk across the Thames, uh, on ice,

00:45:48.680 and they have what they call frost fairs in early, uh, 17th century London,

00:45:53.240 where they, the merchants would set up their booths on the, on the Thames,

00:45:56.520 and people would go out ice skating and you could go shopping.

00:45:58.600 That's how cold it was.

00:45:59.560 And that, that lasted for several hundred years.

00:46:02.120 So, of course, the climate changes, you know, and say, you know, you're a climate denier.

00:46:06.280 I'm not a climate denier.

00:46:07.160 Climate change all the time.

00:46:09.240 I just deny bad science.

00:46:10.680 I deny your hoax.

00:46:11.720 I deny your lies.

00:46:12.760 That's, yeah.

00:46:13.800 All right.

00:46:14.360 Well, this video is not demonetized.

00:46:15.960 Thanks to you, Jim.

00:46:16.600 But, but, you know, it is, it's weird because, uh, matters of science,

00:46:22.600 you, you could be completely wrong about this, right?

00:46:24.760 I'm not saying you are, but you could be.

00:46:26.600 And we should still be able to have the conversation.

00:46:28.600 But if it does feel like to me, I feel it inside of hosting the show right now.

00:46:32.600 I feel like I have to sort of acknowledge the fact that you've expressed a controversial view

00:46:37.720 that goes against what we all are supposed to believe.

00:46:41.160 No, I, I have, I have not expressed an opinion.

00:46:43.400 Everything I've said is based on science.

00:46:44.920 I can be happy to, pardon me, deluge you with the, with the peer reviewed papers.

00:46:49.000 What's interesting is that the, the true experts, I'm talking about, you know,

00:46:53.080 Princeton physicists, University of Colorado, by the way, they're very,

00:46:55.960 one of the top research universities in this field.

00:46:58.520 The guys and women, mostly guys, who are retired,

00:47:02.120 who aren't worried about all the things, they're writing papers

00:47:05.080 that completely refute the climate change narrative.

00:47:08.920 I should, I should call it the global warming CO2 narrative,

00:47:11.800 because everyone, anyone who knows anything knows that climate's changed.

00:47:14.840 Right.

00:47:15.160 I lived 10 years on Long Island.

00:47:17.240 Let's not spend too long on this, because I just wanted to point that out.

00:47:20.120 But the thing I really wanted to talk about as well, James, is one of the things that defined

00:47:25.720 the politics of the last eight to nine years, I would argue, is globalization.

00:47:32.840 Yeah.

00:47:33.320 And the impact that that process had on particular subsets of our population.

00:47:38.120 Correct.

00:47:38.600 The Brexit and Trump votes had a lot to do with that.

00:47:43.080 Yes.

00:47:43.640 And part of the way that that impacted politics was that,

00:47:49.320 this is the argument, I don't know whether you agree with it, but people would argue

00:47:51.880 globalization was a net good in terms of making everybody richer around the world.

00:47:56.120 However, it had, you don't agree with this part.

00:47:58.280 Well, let me, let me get the rest of the argument out.

00:47:59.720 Of course, yeah.

00:48:00.600 However, it had a very bad impact on certain groups of the population in certain countries.

00:48:06.600 In the West, that meant that basically lower skilled people lost their jobs,

00:48:10.680 and manufacturing jobs in particular. And around the world, it meant, you know, people working in

00:48:15.880 terrible conditions and blah, blah, blah. And that's not necessarily, may still have been an

00:48:18.920 improvement on what they were doing before.

00:48:20.360 But that's right. Right. Now, what we saw as a result of COVID and other things to do with the pandemic, and now the war in Ukraine,

00:48:30.680 the world is going through a process of de-globalization.

00:48:33.480 Correct.

00:48:34.040 And this is what you, this is what you call broken supply chains. That's basically what that means, right?

00:48:38.280 Yeah. The broken supply chains are part of it, and that's going to continue. And we are de-globalizing

00:48:44.200 or decoupling is another word, but it's the same thing. We're busting up globalization.

00:48:48.760 So does that, my question to you is, does that not mean that we're all going to, well,

00:48:53.480 except for the super rich, you're always going to get richer, it seems like. We're all going to get poorer now.

00:48:58.360 Well, when you, going back to what you said a couple of minutes ago, Constantine, where,

00:49:02.360 you know, whether they're winners or losers, et cetera, and of course they were, we're all better off.

00:49:07.880 That's true on average. Averages hide more than they reveal. You have to get behind the average

00:49:14.280 and look at the degree distribution. So, you know, so the old joke, I hate to use cliches,

00:49:19.160 but I'll use one now, you know, 20 guys are in a bar and Bill Gates walks in, and on average,

00:49:23.400 everyone's a billionaire. Well, you're actually the same guy you were before he walked in the bar.

00:49:27.800 So you can't do whatever you want, but to me, it's not meaningful to talk about

00:49:35.240 higher average income, higher per capita income without looking at the degree distribution,

00:49:39.720 the Gini coefficient, the income inequality. That's where it matters. Because I spent a lot

00:49:45.000 of time in China. The sliver of the population who are multi-billionaires is, brings up the average.

00:49:53.960 But, so yeah, okay, people left the farm, they went to the city. It's still rough, but it's better

00:49:58.760 than where they were, and they are better off. I don't dispute that. But you can't look at the

00:50:03.720 average numbers or the global numbers without understanding the fact that people are a little

00:50:08.680 bit better off, some of them. But the income inequality is extreme, and it's also extreme. The

00:50:17.240 U.S. Gini coefficient is a measure of income inequality, so a higher number means you're

00:50:21.880 more unequal. The U.S. just passed Mexico. I mean, Mexico is always the, for Americans at least, 0.94

00:50:27.880 you got oligarchs in Mexico. Well, we got them here, and we got plenty of them. 0.99

00:50:32.120 So, first of all, real incomes of Americans have been declining for 30 years, for working-class

00:50:43.560 Americans. Now, the super rich, yeah, they're off the charts. So, the averages still look bad,

00:50:49.720 by the way, but they don't look as bad as the everyday American who has been in a losing race for

00:50:56.280 30 years. But yes, a small sliver, they're much better off. And they're the ones with the biggest

00:51:01.960 interest in keeping the game going. But I also disagree, Constantine, when you said, you know,

00:51:07.560 talk about secret cabal, and you didn't quite put it that way, but that was sort of, you know,

00:51:12.040 aren't we into conspiracy theory land? It's not a secret. I can name them all. You know, it's Christine

00:51:18.360 Lagarde, and Janet Yellen, and Tim Geithner, and Mark Carney, probably the number one villain in the whole

00:51:24.120 thing. You know, Tim Cook, Jeff Bezos, you know, the heads of the major tech companies, Mark Zuckerberg,

00:51:32.840 the Davos crowd, but more than that. And they totally get it. These are, you know,

00:51:39.160 these are smart people in addition to being immensely powerful. But they want this, because...

00:51:43.880 Sorry, Jim, what do they want? Well, what they want, and I talk about this in my book,

00:51:49.320 The Road to Ruin, a 2016 book, The Road to Ruin. I explain this in great detail.

00:51:53.880 Problem with being 10 years ahead of your time is that, when it comes true, everyone forgot you

00:51:57.160 said it. But pick up that book, and you'll get the blueprint. Look, what they want in a nutshell

00:52:01.960 is world government, world money, and world taxation, with a small group in control. That's what they

00:52:07.240 want. The question is, how do you get there? The answer is, and Karl Popper explained this 70,

00:52:13.400 80 years ago, and George Soros adopted it. It's called piecemeal social engineering. It's like

00:52:20.360 slicing and salami. Don't take the whole thing it wants to slice, slice, slice, slice. People don't

00:52:25.400 notice, or give yourself enough time, and you'll eventually get to where you want to be. So the

00:52:31.560 euro was a big step in that direction, because no more lira, no more jacqua, no more pesetas,

00:52:40.040 French francs. And now, you know, NAFTA was a big step in that direction. No more, you know, 0.87

00:52:45.800 no more borders. So they want to eliminate borders. They want to eliminate different kinds of money.

00:52:49.640 The central bank digital currencies, even if you do it, you know, there's a CBDC,

00:52:55.800 euro. It's not a cryptocurrency, by the way. The message traffic is encrypted. It is digital,

00:53:02.680 but it's not a cryptocurrency, because there's a single ledger controlled by the government,

00:53:07.320 and they can see what you're doing. This is the ultimate social control tool.

00:53:12.360 Where are they traveling? How are they traveling? What are they eating? What are they consuming on the

00:53:19.080 platform? So individual carbon footprint tracker. Stay tuned. We don't have it operational yet,

00:53:26.520 but this is something that we're working on. So right now, I'm in an airport. I want a candy bar.

00:53:32.680 I go to a retail place. I buy a candy bar. I use a credit card. The merchant, how does he get paid? Well,

00:53:38.360 he sells that receivable to somebody called a merchant acquirer. These are factoring businesses

00:53:43.560 that buy up hundreds of millions of dollars of receivables. So the merchant gets paid. Then the

00:53:48.680 merchant acquirer delivers it to MasterCard or Visa. He gets paid MasterCard, Visa, distributes it to the

00:53:54.920 issuing banks. They get paid. The bank sends me a bill and I pay the bank. Okay. Why do we need five

00:54:00.120 intermediaries and 3% discount, 3% of fees for me to buy a candy bar? So the central bank digital

00:54:07.720 currency, we have a single ledger, QR code on your smartphone, no intermediaries. It's better,

00:54:15.240 faster, cheaper. And that's true. That's actually true. They always sell stuff by giving you the

00:54:19.480 benefits. They never tell you the other side. The other side is, oh, now I'm in a bookstore. I buy the

00:54:24.920 new book by Ron DeSantis, you know? Well, right now that's between me and MasterCard. You need,

00:54:30.600 under the Fourth Amendment, you need a subpoena and a warrant to get that information from MasterCard.

00:54:35.000 And if you're not a wrong driver, they shouldn't be able to get it. But with the central bank digital

00:54:38.760 currency, the government knows it. They know I bought a book by Ron DeSantis. They know I gave a

00:54:44.040 contribution to Elise Stefanik, who's the number three Republican in the House. They know I traveled to,

00:54:50.520 you know, Florida, you know, Red State, whatever. And then you combine what I just said, that ledger,

00:54:55.640 with artificial intelligence, with the GPT, a generative pre-trained transformer technology,

00:55:02.040 you've got a target on your back. With that information, which the government will now have

00:55:05.560 firsthand, they're not stealing it, you're giving it to them by using their central bank digital

00:55:08.760 currency, combined with GPT, artificial intelligence technology, they can develop a profile

00:55:16.920 of you. And go back to Joe Biden's speech in Independence Hall in September 2022, just ahead

00:55:24.280 of the midterm elections, art directed by Lenny Reifenstahl. I mean, might as well have been,

00:55:28.840 right? Everything that they use, that she invented at the Nuremberg rallies, you know, putting the leader

00:55:34.200 up on a pedestal. She was the one who dug trenches to put the cameras in the trenches so you'd be looking up 0.93

00:55:39.960 even higher at the leader. The vertical lights, the blood red backdrop, everything about that,

00:55:45.080 the art direction of that speech was right out of Nuremberg. And, you know, she was a great art

00:55:49.400 director, and more. So, but what did Biden say? He said half the country are enemies of the people.

00:55:57.800 He said, not all your Republicans, but you MAGA Republicans, well, that's the majority of the

00:56:01.480 Republican Party, are enemies of the people. So now you've got Biden telling you you're an enemy of the

00:56:07.000 state. You've got the government knowing, actually, it's a kind of thought control, because

00:56:11.880 I, using inference, I can tell by what you're reading, what you're buying, what you're attending,

00:56:17.240 et cetera, kind of what you're thinking. Combine that with artificial intelligence and GPT technology,

00:56:24.600 and now you've got a target on your back and expect to knock on the door from the FBI goon squads.

00:56:28.360 So that's-

00:56:28.760 I'm off to buy a copy of White Fragility, just to balance things up.

00:56:32.280 That's where we're going with this.

00:56:33.160 Yeah. But so, look, so that being the case, but let's look at it in practical terms. So you've got

00:56:38.440 the dollar, which is pretty much a digital currency, and so is a sterling, as where we are now.

00:56:43.640 Correct.

00:56:43.960 So that's a digital currency. We've got a CBDC. What is the difference? Is a CBDC,

00:56:50.680 is that going to be a new currency, or is that just going to be the dollar? And if it is a dollar,

00:56:56.200 how are they going to transition from everybody using this system to everybody using CBDC?

00:57:01.080 Well, the transition is already underway. There's new-

00:57:03.320 That's comforting, Jim. Thank you.

00:57:04.600 Oh, sorry. You know, and when you frame a question like, you know, can we bring this

00:57:10.840 down to the everyday American or Brit or citizen around the world? I completely agree with that. 1.00

00:57:15.960 That's a good approach. But I am talking to that audience. I'm talking to you, but I understand the

00:57:22.120 audience. I'm saying if the elites are working on something that would make George Orwell blush,

00:57:28.120 which it would, that is something that affects everyday people. You ought to pay attention to that.

00:57:32.040 And the difference, Francis, is a central bank digital currency is not a new currency. It's

00:57:38.920 still a dollar, it's still a euro, it's still a yuan or whatever. It's a new payment channel. But here

00:57:43.800 are the differences. Number one, here's the biggest one. The government controls the ledger. Not

00:57:48.520 MasterCard, not Visa. The government controls the ledger. And right now, see, MasterCard has product

00:57:55.080 codes. And so, you know, there's like, probably books get thrown in with like, you know, retail

00:58:02.040 or, you know, consumer durables. They're kind of broad categories. They do sort them that way,

00:58:05.880 and they give you a year-on statement and all that. But interestingly, MasterCard recently came up with

00:58:10.840 a separate code for guns, guns and ammunition. Now, it used to be sporting goods. You know,

00:58:16.680 you wouldn't necessarily know if I bought a fly rod or AR-15. But now you will, because they break it out.

00:58:23.320 And I was at the government's behest. And that's the beginning. But you'll see that

00:58:26.840 in an extreme form with central bank digital currencies. So they're going to know what you're

00:58:30.760 buying. Correct. But, yes. But from that, with artificial intelligence, they can know what you're

00:58:36.200 thinking. And that's really my point. But, you know, combine that with, you know, these other

00:58:43.560 developments that are taking place. But the Fed is rolling out a system called FedNow. It's going into

00:58:50.360 kind of testing in a few months, actually, I think this summer. And they've announced this. And this

00:58:56.440 is the interbank version. So it's not going to be on my smartphone or it's not going to be at retail

00:59:01.080 yet. But they want to make sure it all works between the banks, the interbank payment system.

00:59:05.720 And then they'll kind of roll it up. But they also got to get rid of cash. Because you say,

00:59:09.480 all right, I don't like this system. I don't want them knowing what books I'm buying, whatever.

00:59:13.240 I'm going to use cash. Well, you've got to get rid of cash. You're seeing that already. How many

00:59:18.360 places have you seen no cash accepted? So they'll do that. And then the other thing they've got to

00:59:24.120 whack is Bitcoin. Now, I'm not a Bitcoin fan. But, you know, it is what it is. If people want to

00:59:28.600 knock yourself out. But that's not good enough for the government. So going back to our banking crisis

00:59:33.640 discussion, on the same night, Sunday, March 12th, when they said all the deposits are protected,

00:59:41.320 they also whacked Signature Bank. They took out a bank called Signature Bank.

00:59:45.080 And Barney Frank was on the board of directors, as in Dodd Frank, you know, so

00:59:49.000 that didn't do a lot of good. But Frank said, and he was correct, he said, if you had just let us go

00:59:54.120 until Monday, when the Fed announced Sunday night that they would buy all the underwater bonds at par,

00:59:59.400 we would have been fine. Why did you take us out? Why were we any different than any other medium-sized

01:00:04.360 bank, which were all in the same condition? The answer is, they had a portal, going back to my

01:00:10.200 casino metaphor, to the crypto world called Signet. And they were very active in converting

01:00:15.400 cryptocurrencies into mainstream banking. They were a regular bank, member bank, FDIC insured.

01:00:20.440 But they had this portal between the banking world and the crypto world. And that's what they were,

01:00:24.840 that's what they wanted to kill. And that's why they took out Signature Bank and didn't give them

01:00:28.920 one day's grace to survive. So they got to whack Bitcoin, they got to whack cash. And I always say,

01:00:34.920 if you want to slaughter cattle, you got to herd them into the slaughterhouse, get them in a pen and get

01:00:38.840 them in a chute. Well, you got to get rid of cash and crypto, herd everybody into the digital world,

01:00:43.880 and then you can whack them politically. And that's what's going on.

01:00:46.440 Okay, Jim, we've got to wrap up. But before we do our final question and our locals question,

01:00:51.320 there is an obvious question here, which is if you're an ordinary person listening to this,

01:00:55.480 and you haven't jumped out of a window yet, what do you do about it?

01:01:00.360 Well, a couple of things. And this gets back, I guess I digressed a little bit when I said,

01:01:04.440 have gold in your portfolio. And going back further to the reserve currency thing,

01:01:09.480 there is no alternative to the dollar as a reserve currency in terms of bond markets. There's no bond

01:01:15.400 market with all derivatives and futures and options and settlement and clearance and rule of law and

01:01:20.200 all that stuff. But there is an alternative called gold. So gold will be where countries go,

01:01:25.800 and it should be where investors go, follow the money, as they say. And central banks have been net

01:01:31.880 buyers for the last 13 years. So they're about the best in foreign players you can imagine. So I'd

01:01:37.400 have some gold for that reason, because not because it's shiny and pretty, but because central banks are

01:01:43.880 are huge net buyers, and it is the alternative to the dollar. There's no other currency that comes close,

01:01:49.560 but gold does. So that's the reason to have some gold in your portfolio. And also this loss of

01:01:55.320 confidence in dollar that we've been talking about, independent of what other countries are doing,

01:01:59.080 um, it'll, it'll preserve wealth. It'll, it'll be fine the next day. Uh, you know, if there's some

01:02:05.240 kind of panic or collapse or revulsion against the dollar, that's how currencies die, your gold will

01:02:10.760 hold up just fine. And before we go, do you think they use a pandemic to get rid of cash?

01:02:19.400 They use the pandemic for a lot of things. And, uh, we'll need another hour on that. Maybe you can

01:02:23.560 invite me back. Uh, we'll do that. Yeah. In due course. But the pandemic was a dry run for

01:02:28.520 the climate change panic that they're trying to promote. So my biggest shock at the pandemic,

01:02:35.160 when they said we're a mess don't work, the research is clear. By the way, these are not

01:02:39.240 opinions. I'm happy to give anybody 50 peer reviewed academic papers that back this up. Mess don't work.

01:02:45.160 Lockdowns don't work. Um, the guy who, uh, won the presidential medal of freedom for eradicating smallpox

01:02:51.720 wrote a paper in 2006, DA Henderson, greatest, uh, virologist in history said lockdowns don't work.

01:02:59.400 But of course that was ignored by Anthony Fauci because he had to cover up his own crimes in Wuhan.

01:03:03.960 Um, but, uh, so there's a lot of truth bombs being dropped in this episode. Uh, so we, we know all this.

01:03:10.840 Yeah. Okay. But my, my point is, um, it was a really good job. You know what shocked me the most?

01:03:15.960 Not that the government would lie, not that they would use fear, but that people would go along with it.

01:03:20.520 Yeah. That's what shocked me. I was the same. That's what shocked me. So you, you're wearing a mask.

01:03:24.600 You, a cop had to basically accost me to get me to put a mask on. And then as soon as he was gone,

01:03:29.080 I would pull it down under my chin. I never wore a mask. Um, best treatment for COVID was to get

01:03:34.440 outside, get some sunshine, fresh air, maybe a little vitamin C, exercise, lose a few pounds.

01:03:38.920 That was the right therapy. And we did the opposite, put a mask on and stay inside. So, so as a dry run,

01:03:45.080 it worked. Fear works and people are more obedient than I would have expected. And so if those two

01:03:50.840 things are true, then you run the, you run the climate change playbook and you, uh, you get world

01:03:55.320 control. Well, uh, I mean, the fact that people responded the way they did was absolutely terrifying.

01:04:02.520 Yeah. And that's what I always say to people, people, you know, people who complained about

01:04:06.360 the COVID authoritarianism, they're like, oh yeah, the government went all tyrannical and,

01:04:11.560 and there wasn't Democrat. I was like, no, no, the government was looking at the people

01:04:15.800 losing their shit and giving them what they wanted. Right. Now, in fairness to the people, 1.00

01:04:20.680 they were terrified into it by the government and the media. Yeah. Right. But you put all that

01:04:24.520 together and the people were willing to give away their freedom. Correct. And that is terrifying.

01:04:28.840 Yeah. Uh, and on that happy note, uh, Jim, uh, as always, thank you for coming on the show.

01:04:33.480 Obviously we recommend everybody check out, sold out among your many other books. And we always

01:04:38.520 end with the same question. Which is, what's the one thing we're not talking about as a society

01:04:42.920 that we really should be? Um, we're, we can actually look, everyone's like AI is the end

01:04:49.720 and ChatGPT is the end of the, um, search engine, which it is. That's why Google is in such a panic

01:04:54.680 and they're rolling out their AI. Um, but we can look beyond AI, to the end of AI. AI is the end of

01:05:03.960 the search engine. We can look beyond that to AI. And the reason I'll, I promise to be brief,

01:05:08.920 we're coming out the end of a 2,300 year old tunnel. Plato was a transitional figure between

01:05:15.400 the Homeric society. Homer never wrote a word. It was all, he composed it orally. It was a reciter.

01:05:21.080 It was how people learned it. It wasn't a poem in their minds. It was the Encyclopedia of Greek

01:05:25.080 Behavior. Um, Plato started writing things down using the phonetic alphabet, which was brand new at the time.

01:05:31.240 And we've been using phonetic alphabet ever since. We're now coming out the other end of that into

01:05:36.360 an oral, acoustic, tactile society. And everyone likes emojis. They think they're cute. Emojis are

01:05:42.280 hieroglyphics. They're not phonic. Um, and, and the same thing with, you know, universal signs,

01:05:48.120 hip hop. I'm not singing hip hop. I'm just saying it's all acoustic and kids are getting an education.

01:05:55.240 They're absorbing it electronically. They're not sitting in class. They should be, but they're not.

01:05:59.720 So, um, that, what does that mean for the whole computer world where we just taught

01:06:04.200 chat GPT trains a computer to read a billion pages of the text. What does it mean when we don't read

01:06:09.160 anymore? What does it mean? It means we're not ingesting it. We're not ingesting information

01:06:16.120 properly. Well, we're ingesting it in an electronic way. You know, Marshall McLuhan said when the first

01:06:20.920 Sputnik went up with the entire world became a human artifact because we wrapped it in aluminum foil.

01:06:26.360 Um, so some of this is just kind of updating McLuhan for the chat GPT world, but, um,

01:06:32.520 it's, uh, it, you know, he came up with the phrase global village and everyone says,

01:06:37.000 Oh, it sounds kind of nice global village. You know, he says, no, villages are brutal,

01:06:40.600 violent, tribal. So he, it was an accurate description. Good choice of words. 0.99

01:06:45.000 He said, don't think that means warm and fuzzy. It's, we are becoming more tribal and that's what

01:06:50.440 acoustic environment, electronic environment is doing to us. And we don't know it. It's, um,

01:06:56.920 uh, you know, they say that the fish, the, we don't know who, um, discovered water, but we're

01:07:01.800 sure it was not the fish because the fish is in the water. You have to take the fish out of the

01:07:05.880 water and say, Oh, where's the water? Well, we're in this electronic environment. We don't even know it.

01:07:10.120 Yeah. We can do another hour on that as well. And I have no doubt that we will. Jim,

01:07:14.760 it's always a pleasure to have you on the show and that's why you should head over to locals.

01:07:18.600 Join us there for the bonus questions that you've already submitted that only you will

01:07:22.280 get to see the answers to. Take care and see you soon.

01:07:27.000 Will you be putting money on Trump to win the election next year?

01:07:31.160 Oh, what a question.

TRIGGERnometry - May 21, 2023

Jim Rickards： Recession is Coming

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