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