Jim Rickards： Recession is Coming
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Length
1 hour and 7 minutes
Words per minute
192.4398
Harmful content
Misogyny
6
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2
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Hate speech
8
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Summary
Jim Rickards joins us to talk about his new book, Sold Out: How a Broken Supply Chain, Surging Inflation, and Political Instability Will Sink the Global Economy, and why we should all be worried about it.
Transcript
00:00:00.560
The first question comes to me, which is what's next.
00:00:04.960
Where's your dry powder if you actually did have a big war tomorrow with China invading Taiwan?
00:00:12.040
And by the way, 130%, who's at that lunch table?
00:00:17.960
I mean, is that the group you want to be having lunch with in the cafeteria?
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,
00:00:32.720
Now, there's a lot of people who would look at things like Bitcoin
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,
00:00:57.720
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,
00:01:04.280
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.
00:01:15.640
Hello and welcome to Trigonometry on the Road from the USA.
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.
00:01:49.400
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.
00:02:05.800
And you are known, at least to us, as the author of a number of books which predict some
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.
00:02:25.320
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.
00:02:35.560
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.
00:02:45.080
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
00:03:10.760
But it can come from two sources that are opposite.
00:03:13.640
One is from supply side shock, supply chain disruption.
00:03:18.840
We saw that in 1973 with the Arab oil embargo over the Arab Israeli war at the time,
00:03:27.960
The thing about supply side inflation is it's self-negating.
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.
00:03:53.320
We saw this in the late 70s where, you know, prices are going up,
00:04:03.240
I worked at Citibank in the late 70s, early 80s.
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.
00:04:17.720
So the supply side disruption tends to snuff itself out.
00:04:21.400
The demand side inflation tends to feed on itself.
00:04:25.080
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.
00:04:46.520
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,
00:05:14.120
Starting in June 2022, that was the peak and this inflation has been coming down.
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.
00:05:29.000
I'm not forecasting June, but I would not rule out another interest rate hike in June
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,
00:05:59.480
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.
00:06:20.360
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.
00:06:32.200
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.
00:06:45.720
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.
00:06:59.880
So whether it's five and a quarter, five and a half remains to be seen.
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.
00:07:22.680
But there's one wild card in the deck, which is, that's the Fed's plan.
00:07:28.280
And it's not, you know, you don't need a crystal ball.
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.
00:07:49.320
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,
00:08:16.360
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.
00:08:30.760
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.
00:08:43.080
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.
00:08:49.880
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
00:09:04.840
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.
00:09:19.960
Well, we actually had a pretty good track record of cutting spending for the first 220 years.
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.
00:09:34.280
But we had all these revolutionary war debts where we issued all these IOUs to fight the revolutionary war.
00:09:40.520
So the question is, what do we do with the revolutionary war debts?
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.
00:10:20.840
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.
00:10:47.320
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.
00:11:02.760
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.
00:11:12.880
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.
00:11:29.160
Neo-Keynesianism was really bastardized by Paul Samuelson at MIT after the World War II.
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.
00:11:55.880
What's the best way to deploy bombers, et cetera?
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.
00:12:12.600
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.
00:12:25.800
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.
00:12:42.840
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-
00:13:02.440
What you have to calculate is the debt-to-GDP ratio.
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.
00:13:25.560
In 1945, the U.S. debt-to-GDP ratio was 120% all-time high.
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.
00:13:39.720
The U.S. produces half the cars, three-quarters of the cars in the world, half the iron.
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.
00:13:58.520
You had Democrats like Harry Truman, JFK and Lyndon Johnson, Jimmy Carter,
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.
00:14:22.680
But we won the Cold War and we won another war.
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.
00:14:54.600
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.
00:15:24.200
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.
00:15:36.840
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?
00:15:51.720
And by the way, 130%, who's at that lunch table?
00:15:57.320
I mean, is that the group you want to be having lunch with in the cafeteria?
00:16:05.400
Well, actually, Greek food is pretty good, but yeah, maybe we could pay for it in lira.
00:16:15.320
It breaks the pattern of running it up in war and paying it down in peace.
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.
00:16:36.120
And she was economic advisor to Bernie Sanders when he was on the Senate Budget Committee
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
00:17:03.160
The Fed can print unlimited amounts of money, which is true.
00:17:06.360
The Treasury can issue unlimited amounts of debt.
00:17:09.800
You have to raise the debt ceiling, but it always has been raised,
00:17:18.040
the only reason we have a bond market is to favor to investors,
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.
00:17:33.240
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
00:17:57.800
Well, when you frame it that way, you actually start out agreeing with her.
00:18:04.840
I was once physically threatened by a Fed official.
00:18:09.240
but that was back in the day where they were a lot tougher than they are today.
00:18:18.840
But the point is, the Fed actually can print unlimited amounts of money.
00:18:23.800
The Treasury can issue all the debt at once, subject to debt ceiling increases.
00:18:34.440
So this is one of these issues where I knew that it wasn't right.
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.
00:19:01.160
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.
00:19:10.040
They're all backed by the same thing, which is confidence.
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.
00:19:26.680
We did this with baseball cards and bottle caps, you know, so anything can be money if there's confidence.
00:19:35.960
And when you lose it, it's very, very difficult to regain.
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.
00:19:54.600
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.
00:20:06.200
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.
00:20:29.400
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.
00:21:04.360
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.
00:21:24.440
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.
00:21:51.000
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,
00:22:26.200
And they had over $150 billion in U.S. Treasury notes.
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.
00:22:57.560
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.
00:23:04.440
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.
00:23:21.480
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
00:23:42.680
But for U.S. Treasury securities, that, that ledger is digital.
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
00:24:13.560
And all of a sudden, the issuer says, sorry, I'm not paying you.
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
00:24:39.880
That's a default, because Treasury securities, at the time, used to have a gold equivalent,
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?
00:25:03.240
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.
00:25:16.600
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,
00:25:42.360
It was, for a long time, stronger than it was before the war.
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.
00:25:57.080
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.
00:26:17.000
They don't like what I'm doing in Taiwan, or the Kurds, or women's rights, whatever.
0.98
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,
00:26:46.520
They're looking at an economy which is lurching, like you said, from one extreme to the other.
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.
00:26:58.360
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.
00:27:09.320
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.
00:27:18.440
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
00:27:31.320
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,
00:27:45.240
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.
00:28:01.720
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.
00:28:19.720
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.
00:28:29.800
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.
00:28:45.000
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
00:28:57.720
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.
00:29:12.280
I shared an office with Myron Scholes for six years, so I see options under the pillow,
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,
00:29:28.360
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.
00:29:37.080
But the real benefit is when everything else is falling apart,
00:29:41.880
So it's kind of an at-the-money call option on every asset class in the world.
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.
00:30:00.680
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.
00:30:17.720
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.
00:30:31.720
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.
00:30:49.880
Janet Yellen is the greatest enemy of the dollar because of the way she's throwing sanctions around.
1.00
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?
00:31:09.000
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,
00:31:28.200
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.
00:31:37.880
Payment currency is anything you're willing to accept or I'm willing to accept.
00:31:42.840
And that, that's where the dollar's under attack.
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.
00:32:14.440
And again, you can use baseball cards if everybody's in on the deal.
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.
00:33:10.520
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.
00:33:26.760
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.
00:33:38.600
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.
00:33:46.440
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.
00:33:57.000
And I, I guess it's been 10 years working on the problem.
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.
00:34:17.160
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.
00:34:27.800
But yeah, the, the, the, the profit making stories are real.
00:34:38.840
He was, he had made about 6 billion at that point.
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.
00:35:07.160
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.
00:35:28.840
So does everybody, but, um, you can make or lose money, but let's say you make money.
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
00:35:58.680
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.
00:36:09.560
You can go and put your dollars up, get your chips, gamble, make money or lose money, but
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.
00:36:59.640
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
00:37:21.080
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.
00:37:29.080
So when an institution fails, here's what happens.
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.
00:37:43.560
And if you have an insurance scheme, we're going to pay the insurance.
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,
00:38:07.880
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.
00:38:20.920
The FDIC gets out the bail-in playbook and says, okay, uh, equity's gone.
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,
00:38:42.280
And, um, they gave them a receivership certificate,
00:38:45.800
because the company was technically put into receivership.
00:38:54.360
We'll sell the assets and we'll pay you as and when we get proceeds, we'll pay you.
00:38:59.800
And the RTC in 1990, same kind of deal, um, took two years.
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,
00:39:23.160
You know, you're going to shut down technology, et cetera, et cetera.
00:39:28.280
So, um, the first announcement was six o'clock Friday.
00:39:35.240
the FDIC and the Fed came out with a statement and said,
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.
00:39:51.240
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,
00:40:15.160
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.
00:40:31.400
They were working on battery technology, wind turbines, um, you know, battery chemistry,
00:40:39.720
That's, that's made up, uh, to, you know, we're on a separate agenda of world control.
00:40:47.320
And of course, if you're at the white house, the greener scam is your number one priority.
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.
00:41:02.440
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.
00:41:30.120
I was gonna talk about supply chains, but you did mention the, the, the non-existent climate crisis.
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?
00:41:55.320
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
00:42:15.160
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
00:42:25.480
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?
00:42:56.840
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.
00:43:10.280
I mean, they, they, these people don't know anything about chemistry.
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
00:43:54.200
Well, yeah, he's, but he's backed by the state of Pennsylvania, so, um.
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
00:44:12.440
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.
00:44:31.240
There is no evidence that shows conclusively that CO2 has anything to do with global warming,
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,
00:45:34.840
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,
00:45:48.680
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.
00:45:59.560
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.
00:46:16.600
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?
00:46:26.600
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.
00:46:44.920
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.
00:47:17.240
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.
00:47:33.320
And the impact that that process had on particular subsets of our population.
00:47:38.600
The Brexit and Trump votes had a lot to do with that.
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.
00:48:00.600
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
00:48:20.360
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.
00:48:34.040
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.
00:56:28.760
I'm off to buy a copy of White Fragility, just to balance things up.
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.
00:56:43.960
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-
00:57:04.600
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?