Dr. Chris Martinson, he's the founder of Peek Prosperity, he is also a board member
of our group now and a trusted advisor of the FLCCC Alliance.
He is also, as you know, our MCC, our MCC, our MCC, how do you like that?
Our MC for the weekend and someone you'll be seeing a lot more of, Chris.
Anyway, Chris is well known for being an economic researcher, a writer and a trend forecaster
and he's the author of the Crash Course, a book and video series that guides people
through to a thorough understanding of our unsustainable economy, energy and environment.
Serious things.
But beyond that, this is hard to believe, Chris.
I mean, this is really a mix.
Chris has a background in pathology and neurotoxicology and the videos he produced
during the emergence of the COVID pandemic were essential daily viewing for millions
of people.
He covers a lot of territory.
Smart guy.
Very smart.
We are so grateful to have Chris's insights and support these past four years now and
I am thrilled to welcome him to the stage.
Chris Martinson, come on.
Come up here and do your thing.
I thank you.
Thank you.
All right.
I'm not an economist but I play one on the internet so just keep that in mind.
And this is actually the area that I'm really passionate about because as I say, if people
were scared by the 99.95% survival rate of COVID, they're not going to like what happens
economically because when unemployment goes up by a percent, suicides go up by about 40,000.
It's like our economic relationship is really important and once upon a time people care
deeply about this, if you watch the founding fathers read some of the old texts, people
used to debate vigorously about their system of money because the system of money is that
important and that's been completely abdicated and is being run by what I consider to be
monetary vandals.
We call them the Federal Reserve.
It's a little dismissive but here's my summary conclusion.
Dishonest money gives you dishonest everything else so what we're talking about this weekend
is we're like what happened to the hospitals and the CFOs and why are these decisions being
made?
You can chase that down to money pretty often.
I can do the same thing for the military industrial complex.
I can do it for the incredible wealth gap that we have in this country right now.
I can chase it down to a lot of things so it's something I want to have that conversation
again.
So we'll start there.
So first thing, some macro data, macro, super boring.
I can see people falling asleep.
This is really important stuff.
The United States government, I put a hockey stick on there just in case you missed what
was happening on that side of the scale over there.
Our federal government in the United States is busy undergoing the most rapid, unbelievable
expansion of debt printing ever.
It's an amazing amount and by the way there is only one country ever in history that's
dug out from this level of indebtedness that we're about to go to and that was England
from 1815 through about the next 60 years.
And that's because they finished the Napoleonic Wars.
They dismantled their war machinery.
They sent everybody home and they had this little thing called the Industrial Revolution
as a tailwind.
So they managed to dig out.
So our question before us today has got to be what's our engine of growth?
How are we growing?
Is it bringing unvetted migrants across the border?
Is that what we're going to do?
Is it AI putting people out of jobs?
The story is getting really incoherent.
So it's time to talk about it.
Now as I like to say, I might be wrong, but I'm not confused.
This is a problem.
We have this expo, I had to, that was a chart I presented at a talk in 2009 and I was like
I'm going to represent that and I had to draw that, I had to put a little extra on there.
We're at $34 trillion of debt in the United States.
We're adding a fantastical amount of it, right?
And what's interesting is I just pulled this article this morning but it's from January
11th.
We ran up another half trillion dollars in red ink in the first quarter of this year,
which their fiscal year starts in October for the federal government.
But look what they said down there.
They said compared to last year, which saw a final deficit of 1.7 trillion, 1.7 trillion.
It's a big number, right?
I don't know how big a trillion is, but I say it all the time, like it's a number, trillion.
Like we all know what that is.
They say 1.7 trillion, but this is the same thing that Paul Merrick must experience all
the time.
I'm like, I'm a data guy.
So I'm like, well, let's go to the data.
Let's go to the U.S. Department of Treasury.
Let's go there.
They are the source of this data.
And here we can pull these two numbers and we find out that on 2.124, it was 34 trillion,
like I just said.
But a year ago, it was 31.4, you subtract and you find out that was 2.7 trillion in actual
new deficit spending.
So when they say the Biden economy is doing really good, they're pulling out all the stops
this year because he's got to get reelected and it's looking kind of dicey how that's
going to happen by the polls.
So 2.7 trillion of deficit spending is 10% of our GDP, which just expanded by 3%.
We're claiming victory, right?
This is really astonishing.
This level of malfeasance and lying is brand new and I've been studying this a long time.
This is like a whole new level of unbelievable.
But that's just the debt.
What if we talked about deficits and IOUs and things called liabilities, right?
So your credit card is a debt.
Your children who may be approaching college age is a liability because you plan to send
them.
So there's a difference.
So this is from Ray Dahlio's Bridgewater Associates.
They did this in 2016.
It's only gotten worse.
That's what that orange arrow is.
But here they're adding up all the IOUs in the United States, which is the debt, but
it's also corporate debt and it's pension liabilities and it's Medicare and Medicaid unfunded.
This is now standing at 1100% of GDP and nobody has ever in all of historical record
ever come out from under something like that.
So what does that mean?
We've just been spending too much and investing too little and then kicking the can down the
road with more and more printing and this is what everybody's detecting is starting
to rip apart at the seams.
And when your money system breaks, that is our social contract.
I don't know you, but I don't have to.
We can conduct business because we have this $100 bill would be that unit of trust between
us.
Money is not a real thing.
It is a social contract.
It's an agreement.
When you break the fundamental agreement, you break the trust in a society.
That's how all these pieces start to come together.
So watching the trust get destroyed in the medical system, this is another aspect of
that.
It's very similar.
And that's why it's so important to talk about it.
And this is a kind of conversation.
You have to unfortunately go to a conference like this and listen to a guy like me because
this should be on TV.
This should be on the front.
We should be having a vigorous debate about this stuff.
So what's interesting is Cynthia Loomis just last year asked Jay Powell, who's not in charge
of the government's debt, right, but this is the chairman of the Federal Reserve.
They're monetary.
They don't do fiscal.
Fiscal is the deficit.
But she asked him anyway and said, is there anything wrong with our debt levels?
And he said, quote, the problem is that we're on a path where the debt is growing substantially
faster than the economy, and that by definition in the long run is unsustainable.
What happens to things that are unsustainable?
They stop.
But there it is.
It's in plain...
And you know what she did next?
Move down to another question.
Like, oh, okay.
Yeah.
Like, that's where I get...
That's where I'm like, I have a follow-up question, right?
But actually it's in Herlap and other congress critters and other people who should not be
running these debts up because what they do is they steal from the future.
And that's a moral issue because now we're saying future generations are going to pay
for what we decided to spend money on.
And then they look back and go, well, what did you spend it on?
Well, we blew some stuff up in Ukraine.
I don't know.
I don't know.
The rest we wasted, right?
So this is the chart.
This is the kind of data I live by.
That bottom dotted line is our GDP growth in the United States over time.
This data comes from the Federal Reserve.
And that's the stuff in the story.
Money has no value unless I can exchange it with you for something.
A good or a service.
It has to...
It just exists because I can do something with it.
So that's the stuff we do with it.
That's the GDP down there.
And on top are the claims, which is the debt.
It's approaching $100 trillion now.
And that's all debt.
Federal, household, corporate, student, municipal, you name it.
And you can clearly see something, which is those two lines are going away from each
other, right?
It can't do that forever.
That's when Jay Powell said, wow, it's in the long run.
It's unsustainable.
Like, no, it completely makes no sense.
Anybody can reason their way through this very quickly.
If this was your household budget we were talking about and the top line is your credit
card debt, and the bottom line was your income, you better be having some conversations
with yourself and your financial advisor because you have a problem.
But we're all pretending like it's not a problem.
So how do we get past that problem?
Well, we print stuff.
Now, this is the most important chart I have.
This is a much longer conversation.
I'm just going to drop this and run away.
But you can find this in the crash course and I talk about this all the time.
But fundamentally our economy is not a real thing.
It's a derivative.
And it's a derivative of the energy we have to use.
And this is the most robust chart I have in all of my economic data.
Nothing is this solid.
And it's showing total energy consumption by the world and total GDP across the bottom
by the world.
And you see a very tight relationship.
And it's easy.
If you went outside and put on your energy goggles you'd see it.
It's in the traffic jams and the planes flying by and the trucks and all the ships.
All of that's funded, if you will, by energy.
So we have an issue here where we no longer understand where the energy is going to come
from to even begin to drive the ship that were our economic ship.
And nobody's really asking and answering that question.
In the West, China is all over this story.
They talk about it.
It's open conversation.
They have an energy policy.
But the West, I mean Europe, United States, Canada, Australia, New Zealand, it's not a
conversation.
Electric cars.
It's like once you get down into that story you're like, that's not an answer.
Those use energy.
They're not a source of energy.
I'm not following the conversation, right?
So this is an important conversation because we don't have a plan for that.
So here's the current data that sort of is getting under my skin.
First up, everybody in the room, you'd be right to ask and say, what's the problem?
Stocks just hit an all time new high.
This is two days ago.
They even knew higher high yesterday.
Stocks are just powering higher.
And that's supposed to be that the stock is the great discounting machine.
It looks forward into the future and asks and answers questions, you know, and says
everything's fine.
But I want to point something out.
This is the total earnings.
The S&P 500 has 500 companies in it, and it's consisted of seven plus 493.
Seven are the big ones you keep hearing about.
Those are the Fang stocks, Facebook, Apple, Amazon, Netflix, Google, et cetera.
And their earnings revisions.
They've just been powering up and up and up this whole year.
All other 493 are down 15% in earnings.
This has never happened before.
And I'm just a tiny bit suspicious because that's how I'm built.
You know, Robert Lufkin said he's not a conspiracy theorist.
Well, I'm a coincidence theorist.
That's a mighty coincidence we got going on there.
How did that happen?
And of course, you can see all these magnificent revenue growths and everything and all this
stuff and earnings beats and all that from the big seven.
So what is going on here?
And what's weird is that we just had this thing where we saw 80,000 layoffs the most
in 10 months, 136% increase from December.
And that was across places like UPS, PayPal, Microsoft, Google.
Why are Microsoft and Google laying people off when they're reporting record earnings
and revenues?
It's just a little, it's another sour note, things you have to resolve living in the
United States.
So that's weird.
How about this one?
When we were in session, wow, 353,000 jobs smashed all expectations, 353,000 new jobs.
That's a whopper, they said.
Yep, it's a whopper.
36,000 of those jobs were government jobs, that's 10%.
Another 30,000 were social assistant or government funded jobs.
So that's 18% a total.
211,000 were part time for other reasons, which is code speak for people who are so
poor they're taking a second part time job.
And so 60% of the total were people getting part time jobs.
And they say, wow, this is great.
But if you're a data junkie, you're like, well, as bad as that is, we know they're just
going to revise it down in the future because they tell us these great numbers and then
they shave them down later when nobody's looking.
And it's just, we've been living through this.
So if this was an honest system where in this case another government agency, not the CDC,
but the BLS, was busy honestly doing this, they would make mistakes sometimes too high,
sometimes too low.
It would be an honest coin.
Heads and tails would come up out randomly.
Last year, 11 times out of 12, they had to, oh yeah, we said there were too many jobs.
Oops, right.
Lying, that's a great word for it.
It is.
I mean, so there's two ways they measure it.
One's called the establishment survey, that's businesses.
One's called household, and they are now as far apart as possible.
There's a nine million job gap between what households are reporting and what they're
modeling through their other survey.
And we've never seen gaps like that before, but this is just part of life now.
You live in a post-truth world.
This is how these are connected.
We live in post-truth world with our medical data, our health data, our CDC reporting here
too.
Only this stuff is really bad because somebody made the point that this is what this is
This is flying a plane with broken instruments.
We're telling ourselves happy tales, but it's not really capturing the story of what's
actually going on.
So also in the whole last year, that's part-time jobs.
That's how many got added, and this is how many full-time jobs got subtracted.
After the dust settled on 2023, we're able to look at this.
So again, our media is just in the constant business of just spinning, spinning, spinning,
and it's how do you begin to make decisions in that?
So we've got also here, we're very lucky to have Paul Kiker here today.
Our companies work closely together.
We have a relationship which I'll fully disclose, and he helps people actually make decisions
within this environment.
So if you have any questions at all about specifically what to do, I can't answer them.
He can't.
So I know a lot of you'll have specific questions after this.
And right now, inflation is actually worse than the 70s.
It's worse.
And so you can tell that because this is a price index, and the steeper that line, the
faster inflation is going up.
And so you can just eyeball between the 70s within that green circle on the left and current
over there on the right.
You can tell which line is steeper.
So that means we're experiencing a faster rate of inflation than the bad old days of
Jimmy Carter in the 70s, right?
And they're saying, oh, the inflation rate, look at us coming down.
That's the blue line.
That's the happy story we're telling, but the red line are the prices you're actually
paying.
But you already know this.
Who else besides me has been shocked at their grocery store bills?
I'm literally like $500?
Did I buy gold bricks?
What happened?
It's been astonishing.
And this right here, we have a name for this.
Low employment or crappy employment, which is on part-time jobs in high inflation, goes
by the happy name stagflation.
What that really means is that for everybody, I'm going to say up or three quarters on down,
that's just a steady program of immiseration.
It just gets harder and harder and harder.
And so that begins to show up in the protests that we see, the ways in which people are
unhappy, suicide rates.
It has a lot of health impacts on people because we're telling ourselves it's happy time, but
the reality is not happy time, and that's cognitive dissonance.
I guess everybody's doing fine, but me is a story a lot of people are carrying.
It's a hard story.
So what really drives the markets, though, because we talk about all the markets.
Let me just be clear about this.
That blue line, if you can see that, is the total assets of the world's central banks,
and the red line is the S&P 500 is a proxy for financial assets.
And you can see that, wow, I know it drives these markets.
It's not earnings, it's not new technologies, it's not customers.
It's the Fed prints more money and throws it into the markets, and it's other central
banks.
So they've been doing this for a long time, and that's fine because they always had an
emergency post-lemon, and then it was something else, and then it was something else.
It's always been a something.
And now they intervene in the markets on almost an hour-by-hour basis.
People who are sophisticated at this watch them, and you can just see when they step
in because they can't have the markets go down.
My theory for that is they're desperately afraid of what would happen if they started
to go down, like this would be some kind of a vortex they wouldn't be able to control.
They know how to control them going up, they're a little afraid of them getting out of control
going down, so they never go there.
So that's been the story for a long time.
This is even more macro.
This is showing both the total value of stocks and bonds worldwide against those same major
central bank assets, and you can see even more clearly what's happening here.
So financial assets, stocks and bonds.
By the way, in the U.S., 92.5% of all stocks are owned by the top 10% of families.
So when they talk about it, like the stocks are this great democratizing thing and everybody
owns them, they confuse us with mean versus median, right?
So 50% of households own some stocks, 10% of them own 92% of them, and that gap is getting
wider and wider and wider, and why do we care?
Because as Plutarch said two and a half thousand years ago, the oldest and most fatal ailment
of all republics is a gap between the rich and the poor.
Those wealth gaps ultimately lead to social friction, discohesion, all kinds of things
that are not good, and so again, this is why I say monetary policy shouldn't be left to
some people who are just like, well, we like markets to go up.
Well, at the same time you're doing that, you're throwing the younger generations under
the bus, you're totally inhibiting household formation, you are driving a gap between the
wealthy and everybody else, and how is that good for society?
We're not asking those questions anymore, right?
What's good for us from a public health standpoint?
Well, what's good for us from a public monetary standpoint?
Those questions have been totally left to Goliath as we've been calling it.
This is fascinating, Charlie Beallel.
This is how much money printing actually happens, and you can see if it's green, it's money
printing has been big that year, and this starts back in the 50s and goes through, and
you can see like, we had some pretty big, which one, yeah, that's going to be too faint,
but we had some pretty big money printing, this is what led to the inflation of the 17s,
these pair of 13s right here, and then we had another pair of 13s, 13%.
That means the money supply, if it was a trillion, it grew 130 billion, right, 13% year over year,
and these are compounding, so it was 13% on top of 13% on top, and so on, as you read down that list.
And then you get over here in COVID, COVID was this amazingly deadly, bad thing that allowed us to do all kinds of things.
Look at that 25, that's why your grocery bill costs $500, and they're trying to pretend like,
oh, it's this thing, it was like a comet, just came across this guy, we don't know what happened.
I know what happened, they printed up 25% of our total supply of money in one year,
threw it into the markets, most of that went to rich people, and the rest of us get the inflation.
Full stop, it's not a hard story.
These are something called leading economic indicators, it's a slew of things, but you put them together,
and starting back in the 60s, we've seen that pretty much every single time it's dipped below 5%, a minus 5%,
we've had a recession, that's what these gray bars are, recession, recession, recession, recession, recession.
What's this? What's that one? No recession, so that's what I'm here to talk about is I think there's a high chance of a recession coming,
they're printing like crazy and spending like crazy to try and stop it from happening because they're a little scared of it getting started,
but I'm not sure if they can, and so you need to have a strategy for that and think about how you're going to manage that period of time,
and that's what we're here to talk about. Just because I'm a Virgo and I hate unfair stuff, it's just a thing,
this is crazy, so when they printed all that money, these are the big banks, right? J.P. Morgan chased it,
and here you can see this is how much reserves that they kept back with the Federal Reserve, so the Federal Reserve prints money,
and they put it out in the banks, and the banks are like, I have too much, and they put it back with the Fed, right?
So they didn't used to do a lot of that, and starting right here, they started to do a lot of it, you know why?
Because before then, the Fed would not pay interest on that, but then the Fed started paying interest on these reserves,
so the banks took as much as they could from the Fed, put it back with the Fed, and got paid interest on it.
In fact, it got so egregious, they got caught this year, and they had to terminate a program where they were lending banks money at one rate,
and then the banks would put it back with the Federal Reserve at a higher rate, and they would capture the difference,
this was the bank term funding program, so can you imagine you could go down to your bank and say,
I can borrow from you at 5%, but you'll pay me 5.4%, how many billions can I borrow?
It's natural, incentives shape behavior, you show me the incentive, I'll show you the outcome, that's Charlie Munger quote, best quote out there.
And so they started doing this, so I mean, look at that, this is thousands of billions, so that's three trillion, it's like three and a half trillion right now,
so if we just, and they're paying 5.4% on that, how much do you get at your bank? Less, right?
So I can add that up, that means every year at one trillion, the banks are getting 54 billion dollars of risk-free profits from the Federal Reserve,
and by the way, those are ultimately paid by the taxpayers, because those are remittances that don't go back to the taxpayers,
they go to the big banks instead, at two trillion it's 108, at three trillion it's 162, so we're pretty close to around 180 billion dollars of risk-free profits that go to the big banks,
simply because the Fed printed money, gave it to them, took it back and are paying them some interest on it.
If it sounds like a little leisure domain, a little slight hand, it's because it is, it's designed to be just complex enough that people go, ah, I'll get it, you know?
But 182 billion dollars, if you, if that was an industry, that is bigger than all those like, oh my God, the profits of the oil companies, they're so terrible,
this is multiples of their profits, whole multiples. So what does it mean, when I said, when I started, I said a dishonest money system breeds all sorts of dishonesty,
money for you and I is a relationship between what we do and what we produced and how we were paid for that.
It's a very strict, what did the banks do for this money? Zero, zero work, zero work got performed, zero, they pressed a few keys.
No new bridges were built, no new crops were grown, no soils were repaired, nobody was healed, nothing happened.
But they got 182 billion out of it, right? Okay, and this is just showing home price affordability has never been more ridiculous,
but I feel terrible for the younger people who are trying to get started because it's almost impossible to get started now,
because housing affordability has never been this bad before, right? This housing affordability index, the lower it goes, the worse it gets, this is a terrible reading.
You can go back a long way and it's never been worse to try and buy a house in terms of affordability and that's comparing median income to median prices.
It's terrible. So that's what we've done to our younger generation. This is a moral conversation we're actually having.
What kind of a society says we're going to give COVID shots to six months old without any supporting data?
What kind of society says, oh, we're going to make it so expensive that young people can't begin to form households?
So they have to delay that, right? That has all kinds of impacts on child, you know, size, family size, happiness, all kinds of things.
How about this? Student loan debt, over one and a half trillion dollars today.
Are you aware that that is the only form of debt in the United States that is not dischargeable through bankruptcy?
The only one. You can discharge everything else, not our students.
So that's why this is an important conversation to have because it has these really, really critical dimensions.
And don't even get me started on the WF Food Pyramid. This thing is...
It's just... It's just a joke.
So the summary here, though, is that the data is very, very clear. We're on this hugely unsustainable trajectory.
I can't predict when it's going to take a turn, but it has to. We know that.
And the simple summary is this with all those unpayable IOUs.
When you live beyond your means for a while, you have to live below your means through some other period of time.
Here's the tricky part. Is that going to be a time when we go through hyperinflation and that's how they steal from everybody?
Or does it get away from them? And do we go into deflation, which is what we call the Great Depression?
And then that's a very different scenario. So how do you plan?
How do you even begin to say, I know what to do in this environment? It's almost impossible.
So this is where Paul steps up and comes on up here and can talk about these things.
Because he actually has to make the hard decisions of helping people manage this territory I've just described.
And so he'd be happy to take any questions. I don't know if you have any slides you want to show,
but I'm happy to take any questions at this point. Literally anything.
We have a mic stand. And because we want to catch all of this on video and on the audio,
you have to come up to the mic stand to ask your questions. Okay?
Yeah, there were two quotes that came to mind as Chris was talking.
And one was, people never lie more than after a hunt, during a war, or in an election year.
Yes. How do you see the plan for a central bank digital currency in this whole thing?
Is it a planned scenario that they're going to use the crash to bring this on?
I'll let you answer after it. Can I tell my bad story on this one?
Go right ahead.
So if you haven't, everybody in this room needs to read a book by David Rogers Webb called The Great Taking.
The Great Taking. And it's a short book. It's 98 pages. It's all referenced.
Read the references. And Paul and I have both hunted this down,
enough talking to various trust departments, lawyers, this and that, that here's the reality.
They passed a set of laws through what's called the Uniform Commercial Code, Title VIII, Section 531, blah, blah, blah,
which basically says that if you hold stocks and bonds in a brokerage account, Charles Schwab Fidelity, you name it,
and oops, big crash.
They go into bankruptcy because it turns out they've been loaning your stocks and bonds out to various people
and they don't get them back. Now their balance sheet is the only protection between you
and taking losses because you no longer, since they passed this, you no longer own your stocks and bonds.
They could have been physical shares from your grandfather who worked at GE and you gave them over
and they're in your account, QCIP number, your name, you don't actually own them.
What you have now is what's called a security entitlement, which is a legal claim that puts you in a structure
that if it does go into bankruptcy, you are not the senior claimant to your own stocks and bonds anymore.
You are now a subordinate claimant. You know who's number one? Well, the receiver.
Number two, derivatives. The derivative positions that they've made and other bets, those get paid off first
if there are any outstanding deficits there.
And then they worked out down the list and so in this fantasy dystopian screenplay we're writing together,
what happens is there's a crash.
Your fidelity account basically gets zeroed and then the central bank comes and says bad news, good news.
Bad news, you got wiped out, good news, we'll make you whole 100% but in central bank digital currency units.
What do you take, zero or these things?
That would be the path I could envision that might get taken.
But if they did actually do that I think they would actually throttle the golden goose
because they would kill capital markets.
I can't see that. I know they've written the laws but you'd have to be the biggest moron ever
to actually enact them I think because it would just destroy
everything that gave us prosperity up to this point.
I mean, you explained it well.
That seems to be the end game if that's where they're going.
And they want to have it obviously because it gives those at the top
much more power just in a basic stance because let's say
they're not using it for nefarious purposes, they can track and monitor every single thing
that you're purchasing so that they can front run the stock trades, the profits,
you name it. The closer you are to the printing presses and to the information,
the quicker you can move at the expense of someone else.
Yeah, the
programmable aspect of them is the most troubling part. For people to know what that means is
these things can literally be programmed to say that you
can buy milk but you can't. They can program it
right down to the level of the transaction. They could program it down to say the money only
lasts for eight days, you better spend it.
It's infinitely programmable and that's not a banking
question, that's a political question. And so
we're not having that political discussion yet. It's still being like the banking regulators
are working out the structures. It's not a banking question whether we have programmability.
Thank you for a very interesting presentation.
In that presentation you mentioned deflation.
Could you expand on why deflation is considered a problem?
I hear that by many. In my simple-minded thinking,
deflation means the price of a good is going down so my money goes
further. I can buy more goods so to me it's a good thing as a consumer.
But I keep hearing how deflation is a problem. If you could
explain, I'd appreciate it. I can show you. I'm from Missouri.
No, I'm not. But I'm going to show you.
So we have a system of banking and a system of money creation that is predicated on
this chart, which is we always need to have exponential growth in the debt
units. There's math under that. I can explain why. But
leaving that aside, here's the data. See that little wiggle?
That's called 2009 first quarter to second quarter, 2010.
Six quarters were credit growth. Very, very, very, very nominally went backwards.
People were in business who were taking out slightly less credit instead of more.
That's called deflation when we're taking fewer and fewer things out. Less debt.
We're going to work it down. That almost broke the entire world's financial system.
You can read the Hank Paulson's memoirs,
you know, Mervyn King, the ex-checker of the Bank of England. They all said,
wow, we were just days away from like complete wipeout. Like this, that literally
almost broke the entire system. And so for better or worse,
my simple characterization is we have a money system that is either happily expanding
or busy threatening to collapse. It doesn't have a
reverse gear. It only has a fast, it says two forward gears.
Fast and faster. I think that's what they're afraid of. But again, everybody fights
their last battle, right? All they know is that this scared the heck out of
them. And that little moment is what led to that law change I just talked about where now
derivatives have been enshrined because this was a derivative calamity that happened
right here. We talked about it as Lehman Brothers, but it was actually very systemic.
Almost broke the whole system from a system standpoint.
Because what happened was bankers need trust, too. And when the derivative started
to go up, we didn't know, the bankers didn't know where the, I didn't know if I could trust you.
You're another bank. You don't even know if you can trust your own balance sheet.
When Warren Buffett took over General Ray, they had a derivative portfolio and he sort of
held his nose and he said, okay, we're gonna get rid of this. It's a reinsurance company.
And he thought it was gonna be a one-year process at most, took
four years, cost him $40 million. And that's when he said derivatives
are weapons of mass financial destruction because even the team of people
couldn't figure out what they had and what they didn't have. So
that's why deflation, I think, is feared because it almost broke things.
Thank you. And to follow up on that, deflation is feared by the
powers that be. It shouldn't be feared by those who are prudent, wise,
and manage themselves with
historically proven decisions. Because deflation is great
for those individuals. And on the other side of a deflationary collapse,
typically the ones that survive are the ones who live prudently.
And like proverb said, I can come back to that minute, but live prudently
and invest on fundamentals and with integrity.
So that's who takes control on the other side of it.
And I think that's why they're so determined to bring about inflation
to keep themselves in control. So I was
going to ask about David Webb's The Great Taking, and you sort of answered that.
But I just want to mention to people, TheGreatTaking.com is free
on the internet. It's the book by David Webb. And we did a video that we
showed on CHDTV, The Great Taking, which is one hour, and kind of goes through this.
And it's interviews with him. But the second question related to David Webb,
so I have your opinion that you think his analysis of an
security interest is compelling, that they've changed it from straight out ownership
to fee simple to an interest that is then in a schedule in bankruptcy.
What do people do if they're invested in securities?
What's your sort of general take on that? Because people
with money typically have money in securities.
You hear the silence?
So this is actually something we're really, really aggressively looking into.
And there are no easy answers, but we do think there are
some answers. So first up, when you find out, so this gets wonky real quick, but
it used to be that we all owned our shares, and fee simple. And then there was
this thing called Depository Trust Corporation that came along, because they had
to move Wall Street from paper to electronic stuff. And while they were doing
that, they're like, well, this gives us other opportunities, including the idea
that now once they hold these shares electronically, you can then begin to do things with them.
Not just hold them, but you can lend them out. So when a hedge fund decides
to short GameStop or something, they don't actually physically go hit those shares,
they just borrow them from a pool that exists at DTCC.
When that happened, it turned out that now that's where the security
entitlement happened. And then actually they created another subsidiary
called Seed and Company, which stands for Security Deposit, but I like how
they said Seed, they always wink at you. You've seeded your
control and ownership to this company. And so
when you go there, even Wikipedia will tell you they own, Seed and Company
owns, 87% of the shares in the United States.
They are the listed owner. Well, what are those other 13%
right? That's the question. So those typically belong to
those are in trust companies. Those are in physical shares that still
outstand. You can't like, it seems simply like, I'll just demand physical shares, right?
But not every company offers that anymore.
They only offer the electronic version, which means you're only within the system.
So that's one level of it. There's certain things that can be done.
Secondarily, this is all like legal leisure domain. It's all legal stuff.
And so this has other implications around your house,
how your house title is held. People don't know that often your title isn't released
by the bank, in case you want a HELOC or something. So you want to release, you want to
get physical legal ownership of as much of your stuff as you can.
That's actually part one, because my belief is if it does happen, if they do
flick that switch, they go up to the easy stuff first. You want to be hard.
You just want to, you don't want to be low hanging fruit in this story, right? So there are a variety
of things you can do legally, but it's, it shouldn't be this complicated.
No, for sure. Thank you. Thank you. Thank you, Mary.
So I've been trying to figure this out, you know, myself and reading and
going online and stuff. And I sold my bonds already
because, you know, that's a problem. Been drawing
down stocks for this various reason. I know it's going up. I'm not going to hit
the high perfect time to sell it, but there's going to be a crash
at some point. So I'm starting to
invest some of the stock money in Bitcoin. I'd like your
opinion on that. The reason being, I want to hold it in my own
wallet, not in Coinbase.
And as an alternative to like people buying
Gold and Silver or some other way of being able to transact
business when they try to pull the CBDCs on
us. And I don't know if I'm doing the right thing. I have
some money to do that. You know, Bitcoin goes up and down. It's a gamble too.
You know, I have investments in
apartment complexes, but those are
on a note. I own my house
totally, but I can't change the
apartment investment to a total ownership of no debt.
And that's going to be a problem as I understand it
when they try to take us over, so to speak.
What do you think about Bitcoin and some of those things?
That's a good question.
Our industry, the financial services industry
would rarely have conversations about it until you've got your black rocks
and your other companies that have entered into that realm.
So the question is, the ultimate question is,
is Bitcoin going to be a part of the new monetary system?
Well, I don't know how to answer that necessarily,
but the way it's established now is the powers that be would not have as much control
as they would like to be, so I would see that as an alternative
to a competitor. But I do like the crypto
currency space as a diversification. So let me ask you this
question. How many of you have insurance on your home, fire insurance, property and casualty
insurance? Okay, the whole room. So let me ask you this question.
If you've paid it for the past 10 years, did you wake up this morning and go,
I'm so upset my house didn't burn down.
That I wasted the premiums
and my insurance agent had a great time, right?
So to answer your question about the great taking and how to prepare if we do have a deflationary
collapse is you have to diversify, okay? Get out of debt
primarily individually, right? That's not the best thing to do if we have
hyperinflation, but there's still no guarantee that comes, but it's the most prudent decision
to make. Consider having some gold, physical
gold that you hold. Now, when I heard the opening
talk yesterday morning, I told Chris afterwards, I said all I need to do is take
what they're saying and apply it to our industry because our industry has
so much fraud, self-interest, and really our industry
are, I don't want to say our, but the financial services industry, Wall Street
I would say is the money that's, you know, the
greed that's pushing what's taking place in the medical industry.
So they're not going to recommend gold to you because it doesn't pay
any fees. It does pay some commissions, but
they're going to tell you it doesn't pay dividends, but if you look at having some that
you own from a long-term standpoint as insurance
and you hope 10 years from now that it's the same value as today, because that means
we didn't have hyperinflation, right? But if we have a deflationary
collapse, it has no creditors. So, yeah, the value might
go from 2,000 to 1,000, but if you've got something
that you can exchange for value, when other people don't
then you're far better off. So, I told a story some time ago
there's a story in the family. I had a great uncle
that in 1929, six weeks before the banks collapsed, went and
for no apparent reason just had a gut feeling, pulled $300 out
of the bank. Saw the banks collapse, money was gone, no FDIC
insurance or anything else back then. And he was a very wealthy man, lost
everything else, but he took the $300 and went and bought as much land as he could
buy for a penny an acre. And that started a lumber company
that employed the large majority of our
town 80% at one point into World War II.
So, if you have some insurance, you got to look at Bitcoin the same way.
That's an alternative form of insurance
that you can utilize. So, a whole comprehensive plan, and you can prepare yourself
to survive it in various ways.
Insurance, and take a portion of your assets and set it aside,
and then look at a plan in your situation, and I'm an
advocate, our industry is not, but I'm an advocate of risk-managed
approach to portfolios as well, because you can't time the markets.
But you can gauge risk, and just like
most of you in the medical field look at blood work, and you see somebody that their blood work's okay,
you don't worry too much. What Chris
showed earlier today with seven stocks leading this market,
you would be in a sheer panic if you saw a patient with blood work like
that. So, you know, you may not be able to
predict exactly when they die, if there's no treatment.
Boston will tell you don't try, because you can't time the markets,
but the reality is, is if you have tools in place that give you decision
points, you can stay in that journey long enough, but exit, right?
Volatility's not necessarily your friend, but a collapse is.
And the blood work in the markets right now is terrible.
As part of that, what do you think of the safety of a U.S. Treasury?
Are they going to just totally default on U.S. Treasuries
potentially? If they default on U.S. Treasuries, you have a bigger problem than the fact that
they lost money. Right. And at least you might have some
gold, but to answer your question about the treasuries, that's the best alternative right now
if you go to cash, especially have a large amount of resources.
So, if you've got $250,000 and you put it into a CD
at the bank, you're going to tie it up for a longer period of time, but that's your limit.
If you've got $5 million, what do you do with it? Well, treasuries are a great place to be
because theoretically FDIC is a government agency. They could
have FDIC go and the government could still back those treasuries.
But, you know, and then you go beyond if worst-case scenario happens,
we spend a lot of time building models. You know, there are other alternatives you can go to,
but treasuries are a good alternative if you're in a protection mode.
So, Paul and I met what, three, four years ago now? Yeah. Yeah. And independently,
I love the idea of conciliance, where people comment things from different directions, but land in the same
spot. So, he's on a farm, I'm on a farm.
You can talk to us about that later. Ultimately, that's the part
of the insurance policy. Yes. Yes. Yeah. So,
a number of people talked about the great taking and also, I guess, in terms of
the idea of an insurance policy. Essentially, that concept is that
there's just kind of confiscation and in the case of the great taking, it's
legal in a sense, but there's also the possibility of
new laws being passed in bail-ins or just extra-legal confiscation
and certainly, growing wealth inequality
is a big driver of civil unrest in general and other
kinds of unrest. Is that something that you've taken into account?
How do you take that into account? I unfortunately, oh, I don't live on a farm,
so I cannot grow my own food, really, in any quantity.
But what do you think of all that?
Well, so,
correct. Yes. This
is actually a 3D subterranean farm-selling operation.
Weirdest side-angle sales pitch ever, so come
talk to us. Well, so this,
as Paul talked about, I'm hedging my bets really strongly.
So, I do believe, so not to sound overly gold-bugged, but you know why I like old?
Because it's a tier one asset, according to the Basel Accords. It's a monetary
asset. It is the only monetary asset that is not
somebody else's liability. The only one. Every other
one is somebody else's liability, your asset, their liability. That gives it a very
special characteristic. And I also am a big believer in
jurisdictional diversification. So, I hold my
insurance policy here. I hold my secondary insurance policy in a vault in Switzerland.
Right? And that's easy. People can do it at any scale.
This is a fairly, this is worked out at this point.
I don't know how things are going to go anymore. I'm literally at that stage of the story.
Like, I don't know. So, there's that. And then as well, having
as much, when I counsel investments, now Paul will help people with their financial
investments. I counsel people on physical investments. Investing in
your house's insulation could be a really
good return on investment. Investing in new energy systems in your house could be a
really, really good investment. Right? There are other things we can do. But it's
based on this idea. Primary wealth is rich
soils. It's thick coal seams. It's oil in the
ground. It's the primary wealth of the land.
Trees, that's primary wealth. Lumber gets, is what the trees get
turned into. That's secondary wealth. That's the means of production. Tertiary wealth
is the stuff we've been marketed to. It's stocks. It's bonds. It's currency. It's just, it's
digits. This is where they keep all of our attention. But if you watch very carefully,
what has Bill Gates been buying more of? Your farm lines.
Yeah. He's, I'm watching rich people move themselves
down into that secondary primary wealth ladder. And they're keeping all of our
attention. Like, where do, where do we do this stuff? Right? So
anything you can do to think about, you know, what is your primary and secondary sources
of wealth? So that secondary wealth is your ability, like skills. Investing in yourself.
Really important. Because skills are mobile. You take those anywhere you go.
Right? But knowing how to do things and, and having the ability to do
things, these are all like actual, we have to, we have to reframe what an investment is at this point
in time. And we have to play the game while the game is there. Right? If you ask me,
you know, to, to like get, like if you said pick, are we going to
face that big crash? Or are we going to face a, you know, a big smoking
skyrocket and stock prices? I'll pick B. Because in my adult
life, they've always printed. People are like, oh, but the Federal Reserve's balance sheets,
you know, seven and a half trillion. Like it could be 200 trillion.
Really, it's just digits. Right? So how, how
to protect that is you got to start thinking more broadly, I think. Okay. And I just, two minutes.
Two minutes. We've got to get somebody else in here. Go ahead.
Find me afterwards. As I listen
to all this, I can't help but detect a major moral
component to all of these issues. Can you comment
on something like a moral revolution or something
that gives people a sense of right or wrong?
Easy question. Great question.
I love that question, by the way. That's, that's a really good question.
Repeat the question because I'm, everybody heard. Yeah. If you don't mind, because my mind started going and
did you, can you repeat the question? The question is, this feels like there's a
moral dimension to this. How do we get back to making moral decisions again?
What I can tell you from the financial markets
and what I deal with is you're going to have to choose to
exit the system in some manner. And what I mean by exiting the system
is not necessarily exiting and burying cash in your backyard,
but the same thing that you're, you're facing from decisions being made
at the, at the top from untrustworthy, trustworthy individuals who have
these institutions to project their lives, for example, the same things happen on the
Wall Street. Okay. Modern portfolio theories being shoved down to the investor
media is just creating, you know,
they're so good at taking a motion and unloading their shares on
to you. Okay. So if Wall Street is supposed to look ahead
by six months and Chris is warning everybody about
about the, what's taking place in China before COVID shutdowns and everything
takes place, and then you have a global shutdown that takes place
all at the same time. You can't tell me somebody didn't know that, right?
But the markets are marching higher and most investors are like
deer in the headlights. Well, the market projects, but the market's going up.
They're offloading shares on to you. So what you have to seek out are those individuals
that are fighting a, that are fighting tooth and nail
to navigate the system by the rules that are
based upon them, but they don't like it, right? In other words,
risk-managed approaches. Because what happens, I mean Wall Street, if you've got an advisor
of a major firm, I've got some friends that are there, you know, they cannot
go to cash to sidestep you into treasuries like we were talking about earlier
because their bosses are breathing
down on them. So you've got to find those, like you have found
the FLCC and CCC with each other. You've got to look for
advisors like that and you have to support them and understand they're not going to
navigate it perfectly. But as long as they're being truthful, that's
one way. I've really got to shut this
down. It's got to be quick, quick, quick. Okay, so
holding treasuries at Charles Schwab versus holding them through Treasury Direct.
Absolutely. People don't know what that is. You can open an account with the US Treasury
with a website that was last updated in 1994.
It's just, it's an awful website. It's tricky to navigate. But you
open up a direct account and then money gets vacuumed out of your bank account
into the US Treasury Department and is put back in when that cycle
is completed, whether you took 28 day paper, 90 day one year, whatever.
So it's straight. So you're bypassing the whole banking system and you're bypassing
a brokerage in this case. It's the safest possible way I know about.
No, you're holding US Treasury Paper directly. So
if it's 28 day paper, it's paying around five or three or something.
And you can set it up to automatically roll over every 30 days,
sorry. But remember, technically, treasuries are the safest investment
asset that you can own because they're a direct obligation of the federal government.
And like Chris said, if they fail, there's other issues. But other things would fall
before them. That's a place to hide and then you can disperse elsewhere if you have a plan.
If you have any more direct questions, he's the guy to ask if you need to know
specifically what to do. If you want to know about...
Wait a minute. Hold on. I have to do this but
they just said they'll hang around a little bit so we can continue a bit more if you don't want to
eat lunch, fine. Anyway, we have to thank you all for joining
this pop-up session which was, oh my god,
I've had at least six oh shit moments when I've been listening to this one.
Anyway, woo!
Thank you.
This is an exciting place to be in these pop-up sessions. Let me tell you. Anyway,
I have to tell you this now. We have one final pop-up, partner pop-up
today, 12.45 to 1.45 p.m. in this room. It's going to be
Warner Mendenhall from the Freedom Council, talking about legal
accountability in medicine, patient injury and doctor independence. Also
important topics. So you can join us right here after you've
had lunch if you want to hang around because these wonderful guys are willing to
stay a little long and answer a few more questions.
You good with that? I'm on
fasting so I don't need lunch. Thank you everyone.
Thank you.
you
