Economic expert Joseph Meyer since 1972 warns of a U.S. debt crisis—$31 trillion total, $9.3 trillion in consumer credit with 42% of Americans struggling to pay—while predicting oil at $65/barrel and gas at $4/gallon due to limited refining capacity. He ties Iraq’s invasion to oil reserves and currency manipulation via the 1980 Monetary Control Act, suppressing gold prices while markets remain overvalued despite insider selling. With jobs scarce, wages plummeting, and corporate loyalty fading, Meyer urges cash reserves and precious metals as safeguards against a potential depression by 2015, calling current economic confidence a dangerous illusion. [Automatically generated summary]
From the high desert in the great American Southwest, I bid you all good evening, good morning, good afternoon, wherever you may be in the wide world of time zones, all of which are covered by this program, Coast Coast AM, Weekend Version.
I'm Mark Bell, and it is my honor to be here with you.
Suspected militants sprayed gunfire inside an oil contractor's Saudi office Saturday, killing at least five Westerners, including two Americans, wounding 25 others.
Police killed four gunmen in a shootout after a car chase in which the attackers reportedly dragged the naked body of one of the victims behind their getaway car.
One of the attackers killed was reported to be on the Saudi Kingdom's list of most wanted terrorists, many of them suspects in last year's suicide attacks on foreign housing compounds in the capital, Riyadh.
The two attacks were blamed on al-Qaeda, Osama bin Laden's terror network.
The chief of the U.S. Army Reserve, I'm sure you've been hearing about this, condemned the abusive treatment of Iraqi war prisoners Saturday, said he's ordered a study of whether reservists are, in fact, sufficiently trained in ethical conduct and how to treat prisoners.
Now, earlier in the week, Rush, working for the very same company that I do, Rush, who's a really good guy, did take off on our movie.
For those that you don't know, The Coming Global Superstorm by myself and Whitley Streeber has been turned into a movie, or the movie says it is based in part on our book, however you want to look at it.
It's called The Day After Tomorrow, and Rush took the opportunity to go sailing against it, saying, this is hilarious.
Fox has a fictional global warming movie, The Day After Tomorrow, and it's turning into a political lightning rod.
Well, he's right about that.
Fringe environmentalist wackos, sponsored by moveon.org, are going to hold a rally just a few blocks away from the movie's New York City premiere.
Yeah, that's where it'll be, New York City.
I'm trying to figure out if I'm going to go.
Featuring none other than Al Gore, the movie's laughable premise, the onset of a new ice age just three days after the polar ice caps melt.
First it was Clark and Woodward books, then the 9-11 Commission.
Now a major political party is forced to run on a joke movie.
A joke movie, he said, followed by the Clinton book.
They're going to send out Al Gore, the one guy who does more damage to them than anyone else, although Carrie's getting close.
Director Roland Emmerich, engaging in his reported enthusiasm for on-screen Gore shows tornadoes in L.A., giant hail in Tokyo, and the flooding and freezing of New York, and Al Gore blames it all on George Bush's environmental policies.
Speaking of the environment, you might want to go up to the website right now.
The website, I refer to coasttocoastam.com.
That's coasttocoastam.com.
I found a remarkable photograph.
I'll tell you about it in a second.
NASA scientists are now saying that cirrus clouds, this is going to kill you, because they've always said contrails could not possibly affect the weather.
Listen to this.
NASA scientists say that cirrus clouds formed by contrails increased surface temperatures enough to account for all the warming that took place in the United States between 1975 and 1994.
This totally ignores major global warming causes like changes in ocean currents, which have been observed by NASA's own satellites.
The statement may be a result of government pressure on NASA to discredit the upcoming film the day after tomorrow.
I'm telling you, folks, this is becoming a real hot, hot, hot political potato.
So NASA is actually saying that all of the global warming that has occurred between 75 and 94 is due to contrails.
Now, let's see, NASA's Patrick Minnesot says, quote, this result shows the increased cirrus coverage attributable to air traffic could account for nearly all of the global warming observed over the United States for nearly 20 years starting in 1975.
But it is important to acknowledge contrails would add to and not replace any greenhouse gas effect.
During the same period, warming occurred in many other places where cirrus coverage decreased or remained steady.
Now, I have sent you to the website so that indeed you might see a photograph, obviously a satellite photograph, which is nothing short of remarkable.
Contrails, chemtrails, whatever they are, they are nothing short of remarkable.
Now, this is a photograph, and I recommend you click on it and get the larger version.
And what you're going to see here is a, oh, I don't know, about the southern fourth of the United States, southeast part of the U.S., centered on Georgia and out into the Atlantic Ocean, about two-thirds of Florida.
And it's incredible.
I mean, this is an incredible photograph.
And it shows you, let's play it safe here for a second, contrails crossing in every direction.
And I rather suspect turning into these high Cirrus clouds.
There's no question about it.
I mean, look at the number of contrails here.
My God, the entire southeast is crisscrossed with contrails that apparently have lingered long enough.
I mean, the old story is that contrails, you know, they're wispy and they form as the jet passes and then they go away.
Well, take a look at this photograph.
These didn't go away.
And judging from the number of contrails seen on this photograph, well, gee, you'd have to say, hmm, these contrails, well, gee, they must have formed over hours and hours and hours, if not an entire day, because surely that many aircraft could not be in the sky anywhere near us simultaneously.
Right?
They say a picture is better than a thousand words.
It really is.
So cruise on up to the website and take a look.
Coasttocoastam.com.
It'll be right there.
Hit you right between the eyes and click on it and get the larger version.
And just sit back for a moment and contemplate what you're seeing.
Music All right, this story broke just before I came on the air.
And it's not the only thing that appears to be broke.
I'm not supposed to have thunder in there.
Let's try this one more time.
That's better.
Okay.
Just before I came on the air, this broke from the Independent in Great Britain.
And I was having a pretty unique conversation with Whitley Strieber because of all these climate stories coming out prior to coming on the air tonight.
And Witt believes that our own CIA, our own CIA, actually uses some British publications to leak stories that otherwise might not get into the American media at all.
Could that really happen?
Well, yes, perhaps.
Maybe this would be one of those.
I'm not saying it is.
I'm just saying that Witt was of that opinion, and I've never really thought about it, but I suppose that would be.
Certainly, there seem to be an awful lot of things that might not be politically popular in this country that appear in the British press either first or only.
Maybe this is one of those, but here it is from the Independent in Great Britain.
Antarctica is likely to be the world's only habitable continent by the end of this century if global warming remains unchecked.
This from the government's chief scientist, Professor Sir David King.
He said that Earth was entering the, quote, first hot period, end quote, for 60 million years when there was no ice on the planet and the rest of the globe could not sustain human life.
The warning, one of the starkest yet delivered by a top scientist, comes as ministers decide next week whether to weaken measures to cut the pollution that causes climate change, even though Tony Blair last week described the situation, this is Tony Blair, as very, very critical indeed.
The Prime Minister, who was launching a new alliance of governments, businesses, and pressure groups to tackle global warming, added that he could not think of any bigger long-term question facing the world community.
Yet, the government is considering relaxing limits on emissions by industry under an EU scheme.
On Tuesday, Sir David said that the levels of carbon dioxide in the atmosphere, the main greenhouse gas causing climate change, were already 50% higher than at any time in the last 420,000 years.
The last time they were at this level, minus 379 parts per million was 60 million years ago.
That would be positive, actually, I guess, 379 parts per million.
They've got a little dash there.
That would have been 60 million years ago during a rapid period of global warming, said he.
Levels soared to 1,000 parts per million, causing a massive reduction of life.
Quote, no ice was left on Earth.
Antarctica was the best place for mammals to live, and the rest of the world would simply not sustain human life, he said.
Sir David warned that if the world did not curb its burning of fossil fuels, quote, we will reach that level by 2100, end quote.
But since we're already in the 2000s and that process appears to be well underway, the effects of that may well be felt now.
I don't know how many of you monitor what's going on with the weather, but there has been a relentless, dangerous pounding of the central part of America and certainly Texas, Oklahoma, and then it moved on through Louisiana and elsewhere with supercells popping up all over the place.
It has been relentless in the amount of static it causes on the radio.
So I've been monitoring that very closely.
And I'm telling you right now, those people are getting battered.
At any rate, whatever it is, I don't think this issue is something that people don't care about.
All due respect to Rush, I just don't think it's something people don't care about.
And I think that the reason that this motion picture is now such a political hot potato is because people do care about it.
They understand that this is the world they live in.
They understand this is the air they breathe.
This is the weather they put up with.
This is where we live.
This is our nest.
And I think people do care about their nest.
Don't you?
This also from Whitley Striber's Unknown Country.
Time travel may be real, it says.
If we can speed up time, we may be able to travel in it.
Now, scientists say they're learning how to do it.
If you find it confusing, you're not alone.
But a physicist by the name of Carlos Dahles says, quote, a big problem for science is common sense.
It works for most everything in people's lives, but not physics.
Raphael, I can't pronounce his last name.
It's an Italian name, writes in the Miami Herald that the physicist Dolls has managed to speed up time.
In the past, atomic clocks on airplanes flying very quickly would have been compared with the same kind of clocks on the ground to show the clocks on the planes moved forward slightly more quickly.
In fact, in his experiment, he puts a digital clock under immense force by spinning it on a centrifuge in order to speed up the frequency of the pulses produced by the clock and therefore push it ahead.
It takes about six hours, but in that six hours, they can move that clock ahead four seconds.
Sometimes time just seems to go faster.
Scientists have a theory about why time flies when you're having fun.
It does, right?
And drags when you're bored to death.
Brain scans show that patterns of activity in the brain change depending on how we focus on a particular task.
If we're concentrating on the time instead of the job itself, this triggers brain activity, which makes time seem to go more slowly.
Remember school?
I have a clock above me, an atomic clock, because we have to keep very careful time naturally for a network.
And if you just, it's very memorable of my school clock.
If your brain, on the other hand, is busy and focusing on a task, perhaps something you love, then it just doesn't have enough time.
It doesn't have enough resources.
Your brain does not have the resources necessary to pay attention to the time that task is taking.
And therefore, the time seems to pass more quickly.
Neuroscientist Tomoy Shimara says this is because, quote, the same parts of the brain that are involved in motor function are also involved in time perception.
Now, there's been a big story, and I've just been pummeled with a lot of you who have sent it to me because there have been all kinds of sightings over the nation of Iran.
In Iran, well, they're almost thinking there right now they're about to be invaded by Little Green Man, or perhaps the Americans racing through the night in spaceships spying on the Islamic Republic.
Flying saucer fever, it is a fever, has gripped Iran after dozens of sightings in the last few days.
Fanciful cartoons of alien spacecraft have adorned the front pages.
State TV there on Wednesday showed, in fact, a sparkling white disc that it says was filmed right over Tehran on Tuesday night.
And they're seeing them all over Iran.
Oh, you have to wonder.
This is kind of interesting.
The head of the Astronomical Society there in Iran told Reuters why these stories are unfounded because you know what?
We'd have seen these flying saucers in our telescopes.
I don't believe in that kind of thing.
And he says, those people, the eyewitnesses, and there have been many of them now in Iran, he said of the eyewitnesses, they're not experts.
Farmers, villagers, pilots, they're not experts.
What do they know?
He said, people, what people reported was consistent with the planet Venus.
It was changing colors, and that's what they've seen.
So they're inundated in Iran with flying things.
All right, let's go to the phone, see what's up with all of you out there.
Wildcard Line, you're on the air.
Hello.
You should be on the air.
There you are.
unidentified
Hello.
I was calling about the chemtrail situation because as soon as you said the word chemtrail and global warming, I immediately realized chemtrail.
Because when the chemtrails play first broke, and I haven't really heard too many updates in the past few years, but everybody was talking about chemtrails back in 2001 or so, people were saying that one of the purposes for that program is probably weather modification.
And some people have been thinking maybe they're trying to mediate global warming.
Whereas other people who are more conservative in mind, such as myself, were thinking what if perhaps they're doing it to accelerate global warming.
You know, if, for example, you take the theory of somebody like, say, David Icke, who has been on cost, I believe, who believed that the reptiles want to take over.
Well, you know, the reptiles would probably want a warmer climate, right?
All right, now I want you all to listen very carefully because the telephone numbers to get in contact with us vary a little from those given out during the week.
We have slightly different numbers, a slightly different conduit.
And if you'll listen very closely, you'll get the one that applies to you.
unidentified
Art Bell, call the wildcard line at area code 775-727-1295.
The first-time caller line is area code 775-727-1222.
To talk with Art Bell from East of the Rockies, call toll-free at 800-825-5033.
From West of the Rockies, call Art at 800-618-8255.
International callers may reach Art Bell by calling your in-country sprint access number, pressing option 5, and dialing toll-free 800-893-0903.
From coast to coast and worldwide on the internet, this is Coast to Coast AM with Art Bell.
By the way, tomorrow night, When I will have the time in the first hour, I'm going to read at least part of an article that came out in Popular Mechanics entitled When UFOs Arrive.
And it's a legit look at what actually would occur if we were contacted.
If UFOs actually landed on Earth, there is a very specific protocol in place with regard to SETI, with regard to the hazmat people and everything that would happen to the occupants of a UFO.
It's pretty wild stuff.
And this is, it's not fantasy.
It's what we have plans, how our plans unfold if they really get here.
Well, maybe the show will somehow cause it to make sense.
But right now, if somebody were to ask me, hey, let's take a nuclear weapon and put it right there in the middle of the San Andreas Fault and see what happens.
Listen, I will keep this photograph up there today and tomorrow.
For you to think that man's hand is not involved after you see this photograph, it would be very difficult indeed.
So get up there and take a look-see at it, all right?
unidentified
Okay, but you know, guests like Stan Deo and Robert W. Physics on your show is talking about how there's been a measurable increase in volcanic activity, earthquake activity, and even solar energy output over the last few decades has increased.
Now, I heard a guest a few weeks on your show talk about the correlative factors between burning of fossil fuels and the increased carbon dioxide output.
And you just read an article about a scientist saying a chief greenhouse gas is carbon dioxide, but it's not.
But again, you see, you're putting us in a position where we're arguing the cause.
And I would really rather not do that.
I'm observing a change, a climate change.
unidentified
Well, that's why it's so political.
I mean, if we realize that these other things that are obviously not caused by man are more of a correlative factor in climate change than, sir, remember the old line about fiddling while Rome burns?
I mean, that's one possible way that people look at immortality, but another would be genetic.
What if they unravel the genetic reason that you and I grow old and stop it?
unidentified
Well, historically, it's always a vampiric concept in one way or another because it always involves one group living beyond its time by stealing time from another group by killing them.
Well, how would you feel, though, if they came up with a genetic fix for mortality and that you could take a shot, just go down and a little pinprick in your arm and something genetically changes in you and you stop growing older?
Would you go for that?
unidentified
I don't know.
I think I'd have to think about that because if you didn't modify our mindset, living forever would be really terrible.
You know, because if I know I'm getting older, but I start looking at the kids and some of the stuff they're into and like your computers and stuff, and I just don't want to get into that stuff.
In other words, I've had this old theory, sir, that by the time you get to be, you know, like 75, 85, 95, somewhere way up there, you just look around at the world and the state it's in and you say, God, take me?
Well, first of all, I was going to tell him that the other changes that he talks about that are not happening, ha, ha, ha, and he makes, you know, fun of all this, just like you said, are totally wrong.
Let me explain really quickly, because I don't want to take a lot of your time, obviously.
But I'm a friend of yours since 1991 on K-Lock, okay?
I'm right here in Las Vegas.
I just moved back from Arizona.
But it doesn't matter where I come from or where I'm.
All I can tell you is That this gentleman, and I listen to him, why?
Because I'm a Cuban.
Obviously, this guy had a lot of good things to say all this time.
Except one thing, Art.
He didn't ever, he always put down the thing about the global warning, about everything else, that you and I, and I say I because for other reasons, but you and Whitley absolutely know that this is happening.
And all I can say is that Rush represents a particular political point of view, some of which I agree with and some of which I disagree with.
And all these years I have disagreed with Rush on this issue.
All these years I have felt and feel now that there's nothing that bars me from being a generally conservative kind of guy.
And I am fairly conservative politically.
Although I'm very much an independent registered, as you know, if you don't, now you do.
I'm a libertarian, technically, but I hold a lot of conservative viewpoints.
That doesn't prevent me from thinking outside that particular box, and that is, you know, that conservatism and the right wing in America is a certain box, and I guess you've got to buy it all or buy none, according to some people.
Well, I cherry-pick, and I think a lot of people do.
In other words, I think our environment and our climate change and all of this is very important because it's where we live.
And so I don't choose to lock, step, march along with the conservatives who say it's all a bunch of baloney.
It's not a bunch of baloney.
These changes measured by Woods Hole and other scientific, clearly prestigious scientific organizations, they're real.
If you choose to ignore them, then you're ignoring science.
Now, when the heat that would normally be trapped in the upper atmosphere by that ozone comes through to the lower atmosphere, the upper atmosphere is colder than it would normally be, and the lower atmosphere is warmer.
One called in who said he was a student from the future, and he was back here on a history course.
And you asked him, well, what about Y2K?
And he said, Y2K, Y2K, I don't remember anything about that.
And then you asked him about Clinton, and he said, oh, the only thing I can remember about Clinton is that he was the last elected president in the United States.
I see CNN report frequently on the amount of consumer debt, that America really is in debt and that we don't save a great deal and that a lot of people have their credit cards maxed out.
And I think when you take a look at the average debt load that is out there per household, and that's if you would include in it the mortgage, and if you would include in it certainly other debts, it's about $18,700 per household.
But on the other hand, others would argue, Joseph, that why the U.S. has always operated that way, that that's how we became as wealthy as we are by sort of floating everything.
Well, Art, the total debt of America is now approximately $31 trillion, and it's currently about three times the GNP of the U.S. So no nation on the face of the earth has ever carried a greater debt load.
And presumably other nations buy U.S. bonds as well.
And as long as these nations are buying our bonds, why everything's hunky-dory, because they, in essence, are continuing to support us by buying them.
Now, if they start to lose confidence in us because, oh, I don't know, because we owe too much and we don't make enough, you know, the basic principles here, then you don't buy U.S. bonds.
And the dollar has fallen approximately 30 percent, even though in the last two months it's rebounded about 10 percent.
But the reason for the weakness in the dollar is we've got 45-year low interest rates here.
And I think at some point we're going to have to see interest rates go up if we're going to continue to see the foreigners come into the markets and buy our debt.
Well, I think you have to put in perspective how much of these bonds these foreigners actually hold.
And I think you have to look at the credit worthiness of the United States now that we've leveraged out to the point that we have.
I think when you look at governmental debt, when you look at corporate debt, when you look at consumer debt, it's all dependent upon people coming in, buying that debt, and assuming the risk that it can be repaid.
Naturally, if something were to go wrong and we were to see a given number of defaults, I think it would certainly send some very strong signals down through the bond market.
I think at some point we are going to have to see higher rates.
I don't think it's a question of if, it's a question of when.
And hopefully, when we see rates go up, we don't see them go up that much, hopefully.
But if it didn't work out, if there was a loss of confidence, a big loss of confidence, and there was a sort of a collapse, I mean, how does that the average person listening right now really can't imagine how that might affect them?
Well, I think what would happen is if the foreigners lost confidence in our ability to be able to come ahead and certainly service our debt, more importantly, remain creditworthy as the dollar continues to erode in value, they would certainly want to dump all these Treasury bonds.
The problem would be, who would the buyers be to step in and buy that paper?
And the problem would be we would see bond prices significantly hindered by the inability of anyone to step in and buy that paper when it would come to the market.
That, in turn, I think, would panic the U.S. equity markets, which in turn, I think, would spill over to the housing markets due to the leverage that we have there with the banks having placed all these mortgages.
Okay, this is all sounding pretty technical, and I understand to some degree it has to, but still I'm asking, let's say that I own a house and I've got a mortgage and I've got a job and I sort of make it paycheck to paycheck.
When this finally filtered down to me, what's it going to mean to me?
I mean, I remember the old saying about if you are in trouble, that's one thing.
If the bank is in trouble, that's something else altogether.
But if I've got a deal with my bank with reference to my mortgage and I've made my payments on time so far, just because they get in trouble, where do they get the right to suddenly call that loan?
Well, I think the housing market in California is insane, and I think prices will probably work even higher.
I think we're getting to the point now that even with a two-income household, it's almost impossible to be able to come ahead and service the debt along with making these large mortgage payments.
Well, I think the states, the two states where I believe we've seen the most appreciation in housing has probably been New York, Pennsylvania, New Jersey in the Northeast, and most certainly California on the West Coast.
I think there are pockets around the country now that are starting to weaken.
I think this job market is certainly getting tougher, and I think we're looking at situations now where if we lose one of the wage earners in a family, these families at this point are unable to come ahead and service any kind of a mortgage payment.
You just mentioned jobs outsourcing, companies outsourcing jobs again.
Let's talk about that for a second.
What would you see done about that?
In other words, this is America, land of the free, home of the brave, and the free part is really important.
If you own a company making widgets and you find you can get your widgets made for, I don't know, 25% of what it would cost for that widget here, and you can get it done in China for a quarter or less of what it would cost here, you're going to do it.
Well, again, I think you have to look at the big picture.
And if you go back since 1986, we've lost 15 million manufacturing jobs in the U.S. We've lost 2.7 million manufacturing jobs just in the last three years.
And that's against the backdrop of interest rates being the lowest in 45 years.
So companies are continuing to move offshore.
When I was young, 25% of the workforce worked in manufacturing.
Now we have approximately 10% of the workforce working in manufacturing.
So we have literally dismantled our manufacturing base in this country.
Well, Lord, I can give you a couple of statistics that will now, I think, confirm what you've just said to your listening audience just on what China's consumed in the last year.
They consume 40% of the world's cement, 31% of the world's global coal, 27% of all the world's steel produced, 25% of all the world's aluminum produced, and they use 7% of the world's total consumption of oil.
They've now surpassed Japan as the number one importer of oil.
And I suppose it would be possible, Joseph, to project as China industrializes, which they're now rapidly doing, what it will look like five or ten or twenty years from now.
Well, you know, Or, just their consumption of oil has increased 30 percent in the last year, and I think that's probably one of the most basic underlying causes of why we've seen energy move up as significantly as it has.
And I think if things even stay stable to somewhat of a point, we're going to see significantly higher energy prices in the U.S. I read in the paper this morning the truckers out in California protesting $2.50 a gallon fuel costs had a rise of 36 cents a gallon just in two weeks.
And it's currently now 56 cents a gallon higher than the national average.
And if oil did go there, I'm a veteran, as many in the audience are, of the 70s oil crisis.
Yes.
If it were to go to that price, what would it be like?
I mean, people, a lot of times, Joseph, don't stop and think that the goods and services that move across America on these 18-wheelers that are so prolific on our highways, they all depend on the price of diesel, which is the price of oil, really.
And if it goes up past a certain point, this begins to tip the whole U.S. economy, doesn't it?
And then at some point past that, the larger corporations that you might think more easily would absorb the increase in oil or gas prices, they'll get in trouble too, won't they?
Very high indeed, and getting to the point where it's really not going to be affordable for some people to make the commute they once made or for truck drivers to economically survive.
Well, as you know, Art, a lot of economists have been concerned that rising interest rates would choke off the economic recovery.
At this point, quite frankly, I'm not too concerned, at least between now and the end of the year, with what rising interest rates could do to the economic recovery, but I am very concerned with what energy costs could do.
Well, remember going back in the 70s when we had the gas lines and we had the shortages and the dealers were stuck with all these new cars and nobody would buy them?
As soon as they came ahead, Detroit, and they retool for the larger cars, we're starting to see energy prices now accelerate and move a lot higher than we would have believed.
Well, because I think the public is now back to the go-go days of the 60s where they want to buy a lot of horsepower and they want to put these vehicles on the highway and they want to really enjoy them.
I think when you look at the traffic on most of these roads throughout the United States, I'll tell you, taking a car out for a drive is not a pleasure.
Well, I asked a little while ago, and I'm going to try again, from an economic standpoint, do you see anything out there, Joseph, that will come along and save the day?
I mean, whether it's ethanol or, gosh, I don't know, hydrogen or electric cars or whatever one might imagine could be available.
Is there anything out there working right now behind the scenes?
And if there is, I don't think it would be developed to the point of it being truly economical within the timeframe of where these energy prices are headed.
Well, I think when you look at the quality of the jobs that are being exported overseas, these were high-paying jobs.
These were certainly very technical jobs.
And I think when you take a look at the type of jobs that are being created, certainly to replace the jobs that are moving offshore, they're not of the same quality.
They certainly don't pay a decent wage.
They certainly don't have the benefits to them of the job that we lost to the offshore markets.
So we may be creating jobs, but they're low-paying jobs.
I'm not sure whether or not we should change that, but I think companies have an obligation to come ahead and create decent paying jobs in this country if you expect its citizens to buy your product.
And so the only way to step in the middle of that and ensure that jobs stay in America would be to virtually pass a law and say you can't send those jobs overseas, which, of course, in turn would have the effect of driving a business out of business, right?
Really, I guess we're asking, do freedom and a rosy economic outlook go together?
I mean, if you have the freedom to take your jobs elsewhere, to put them in China where you can get your widget really cheap, and you can get rich making it there and distributing it here, okay, that's your freedom.
But if the long-term effect of that is that Americans don't have jobs and we go into a depression, well, what kind of freedom is that?
I have a management consulting firm, as you know, and we get involved doing consultation on matters relating to arbitration or mediation in the forums of the NASD or the New York Stock Exchange.
I bought my first 100 shares of stock as a 19-year-old and wanted to get up on Wall Street after I had completed my service during Vietnam.
And I've noticed over the last two years, and I do talk to a lot of newspaper business writers, and I do talk to a lot of magazine financial editors.
And the minute they interview you and you tell them that you don't like the economy and you think the stock market's overvalued, they don't want to hear a thing you have to say.
Unless you're willing to tell them that everything is fine and the market's going higher and things have never been better, they're not interested in writing a thing that you would have to say even if you could show them very hard statistics to prove the concerns that you have in the marketplace.
It's such a giant problem that I don't see a solution.
And of course, perhaps you do.
I mean, if you were in charge of the world, or at least the United States, and you were addressing this outsourcing problem, Joseph, what would you do?
Well, Art, I think, first of all, you have to understand how bad this unemployment picture truly is.
24% of jobless workers have now been unemployed for 27 weeks.
That's a 20-year high just in that statistic alone.
42% of Americans are now making the minimum or no payment on their credit card balances.
That's equally very alarming.
But to tie in the point that you want to make, the fastest growing segment that's getting over its head now in debt is the elderly, 65 and older.
They're being squeezed by higher health insurance, drug costs, and they're struggling to maintain their pre-retirement lifestyles.
They're using credit cards to close the gap.
These credit card companies, as you know, they're levying late fees, over-the-limit penalties.
They're jacking up the interest rates.
Their late fees and their penalties account for more than 30 percent of the card issuers' profits.
So these credit card companies are, quite frankly, are making more money than ever before.
And they're encouraging these people by issuing these additional credit cards to go deeper and deeper in debt.
Everyone I've talked to in the Northeast in the last year has said to me, once you lose a job and you find another one, you're lucky to make half of what you were earning before.
This is a horrendous job market, and I don't think the public realizes just how bad it is.
Well, what angers me, quite frankly, Art, is they have a right to manufacture their widget anywhere that they can certainly go ahead and manufacture it profitably.
But it angers me to think that they want to bring that widget back into this country and they expect the American public to buy it.
Well, I suppose that would be one way you could do it, as opposed to just simply telling companies they cannot have the freedom to do what they need to do.
But that, of course, would bring with it its own set of problems.
Right now, gee we can go as consumers and find all kinds of spiffy bargains all over the place.
But if you stopped the flow of those bargains, Joseph, what would that do to America?
I mean, all of a sudden, there would be a demand for things that we're not set to manufacture right now.
But if we set up barriers, trade or tax barriers, that would stop the flow of those widgets coming back in, then what would be the resulting change in our consumer picture here?
It would be pretty drastic for a while, wouldn't it?
I think it would be extremely drastic, but I think one thing we could certainly Do is give these corporations tax incentives to stay in this country and continue to hire U.S. workers.
The story that you get from those who support the current economic situation is that, look, yes, things have changed, and America now has become an information nation.
Well, I have to question now that we've dismantled our manufacturing capacity, and as you know, one of the biggest industries we have now is the military, continuing to build up and certainly produce the weapons that we need to keep our superiority around the world.
But I'm looking at five major economic problems that I believe are very significant as we move forward.
One would be the record consumer debt, and you and I have talked about that, I think, very thoroughly on the show.
Number two is the very low consumer savings rate.
We now have one of the lowest consumer savings rates in the world.
Number three, which concerns me, is a very massive trade imbalance.
And this imbalance, as I'm sure you agree, has been going on for a number of years.
Number four, we now have a very large federal budget deficit.
This is a major problem now, whether John Kerry would be elected in November or President Bush would win reelection.
And finally, I think the biggest problem is we still have in this country, even with 45-year low interest rates, excessive industrial and technological capacity.
If the United States were to get in deep financial trouble, were to go past a recession into some sort of depression and whatever it was, and there could be any number of things that we've already discussed that could tumble us there rather quickly.
Yes.
One would think that would have, since we're such big consumers here, that would have a large impact on the Japanese and the Germans.
I wonder when you balance that against their confidence expressed in terms of buying our bonds and buying our debt, where those two meet and there's some sort of imbalance.
Well, the only thing I can say is I really question whether we had an exit strategy from when we entered the country.
And I think when you do get involved in these conflicts, and certainly Vietnam is certainly something that I was part of, you question at the time we made the commitment, did we have an exit strategy in place?
Well, I think if we base it on finding the weapons of mass destruction, which at this point we've been able to find, I think we did have a very strong basis for invading the country.
But I think certainly after the period of time that's gone by, I think it would be reasonable that if we were going to find these weapons, would you not think we'd have found them by now?
Well, as you know, Iraq has the second largest proven oil reserves in the world.
Unfortunately, they've never had the technological support that we've given to the Saudis over the last 35 years to really develop those oil fields and bring production online.
Well, I think the answer to that, Art, is twofold.
I think, number one, you're absolutely right that we are meeting much stiffer resistance a year after the invasion that certainly anyone could have contemplated.
But I think more importantly, in the initial first weeks and months of the war, we had a lot of the transmission lines, which are very key to transmitting that oil out of Iraq destroyed.
And those transmission lines will take years to repair and billions of dollars.
And the Iraqis destroyed them.
So that's the reason I believe we've not seen the oil come out of Iraq that everyone believed we would certainly have.
Well, I think there's two answers to what you've just asked me.
I think, number one, everyone is aware that these sorty oil fields are eventually going to run dry.
They're not going to be able to pump at these levels forever.
And I think a decision had to be made where we would have access to oil if these fields were to get into trouble.
As you know, they've got a lot of terrorism there with these Islamic radicals.
So I think that was certainly part of the equation.
I think the other part of the equation is Saddam Hussein had threatened not to take payment for oil in U.S. dollars any longer, that he wanted to take payment in a European currency.
And we weren't going to begin that because once we did that for him, we'd had to do it for everybody else.
So I think that certainly played into the reasoning behind along with the weapons of mass destruction and the possibility of him having these weapons that certainly justified us going into that country.
Well, since 1945, the dollar has become an accepted global currency.
And what we're seeing now with the erosion of the value of the dollar, we're starting to see, I think, a lot of people question, could we approach the day when the dollar would become totally worthless?
I don't think anyone could certainly predict if and when that could happen.
But I think these oil-producing countries, and as you know, going back to 73, 4, 7, the last time we had major problems with OPEC, they were interested in taking payment in a basket of currencies because they were so concerned with the inflation that we had in the United States and the start of very significantly higher interest rates.
As a matter of fact, did you know recently, sticking with economics, ABBA, the group ABBA, turned down $2 billion.
That's what it means.
$2 billion to get back together again.
said, in turning it down, it just never would be the same.
Music Let's take the picture that Joseph has painted for us with regard to the amount of debt we have and is floated out there right now, the lack of savings in this country, the trade imbalance, which is growing and I guess will grow larger because of the outsourcing and all the rest of it,
and as a result, the Federal deficit itself.
All of this would seem to place us on an economic precipice that has the potential to collapse.
Could there be another depression in the United States, Joseph?
Well, quite frankly, Art, I don't think you can rule it out.
We certainly have more debt to service than ever before, and we certainly have people of the belief that we are going to see these markets move significantly higher.
The Yale School of Management came out with a survey, and they basically polled the public, and 95% of the individuals and 92% of financial institutions believe the stock market will be higher in the next year.
The insiders continue to sell the market as it moves higher.
We had in Investors Intelligence, which is a survey of bullish versus bearish advisors, over 50 percent for 44 weeks.
This is unprecedented sediment.
Again, I think it ties in that people believe the economy is fine, that the market's going higher, that if there are any problems here, certainly if interest rates can stay low, we can manage them.
So I think the little guy is back in the market.
We've got margin debt now at $173 billion.
It's up 30 percent in the last year.
So I think the small investor, you're absolutely right, is now back full force in the stock market.
Well, the institutions are back in the stock market, but I think the insiders, these corporate executives that run these companies, have continued to sell all the way up.
Well, it wouldn't be surprising that they know something because anyone that would continue to sell this rally over the last 16 months and never be a net buyer at any time this market has pulled back.
You know, it starts out, I notice the latest hook seems to be starting you out with a very good interest rate, and that lasts for a certain amount of time, and then up she goes.
And you don't get to that unless you read the very fine print.
Or you don't pay one of your credit card bills on time.
I try and pay mine always instantly.
I'm sure they hate my guts.
I just constantly pay my credit cards off.
I use them because they're convenient.
I'm out in the middle of nowhere.
I can order on the Internet and all that sort of wonderful thing.
But I pay them off always on time.
And I've heard that there are actually some companies that they get so sick of people paying off their credit cards that they look for ways to charge them for being good.
Well, as you know, they're very rich in natural resources, and fishing has certainly been one of their premier industries.
Naturally, after that debacle with that Exxon Valdez, I mean, the fisheries have never come back, and it's been well over 10 years that that spill happened, and they've really damaged that environment beyond, I think, what anyone could have believed.
Everything you've said to me, Joseph, points to economic Armageddon, but you haven't said that.
I mean, you've all but said it, so you might as well say it.
I mean, if even half of what you've talked about goes over the top, whether our debt gets to be too much, any one of these, the trade imbalance, the outsourcing, all the rest, all of this, any one of these things, the oil could explode and would be like a dagger in the heart of the economy.
I mean, we have a nation roughly in the situation you've described, certainly a pay check or two away from their own personal economic Armageddon.
And if something really bad, if any one of these things went south, you know, so many in the middle class would suddenly not be making it that you have to wonder where that would lead and how quickly.
But let's take a selfish little turn here for a moment.
And along with all of this potential bad news and real bad news for the economy, what would you recommend to people personally?
I mean, if you're talking to someone out there right now living paycheck to paycheck and they say, okay, you know, I'm kind of buying what Joseph is selling here.
Well, I think you certainly should be looking at, as I said earlier, not taking on any additional debt.
Certainly, you should be looking to reduce your debt.
There are ways in which you can do that.
If you've bought a home and I think you've built some halfway decent equity in it, it may not be a bad idea to sell that house, pay off the mortgage, and go and rent for a while.
Because if I'm right on what's going to happen with housing, you're going to be able to come back in the market two years from now at certainly prices far less than they are today.
And if I'm wrong and prices continue to go somewhat higher, at least you're going to have cash.
You're going to have your equity so that if you lose your job, you're going to be able to live until this economy turns around.
Well, I've worked very hard for everything that I've ever gotten.
I built my reputation in this industry on my honesty and my integrity.
I've always been man enough to admit where I've been wrong.
I think the key in life and certainly very important as we look at the economics of moving forward, if you're leveraged out and you've got a chance now to reduce that leverage and pay back some of the money you owe and certainly put some money in the bank, you're going to be in a far better position than everybody trying to sell housing at the same time.
I think if these rates move up, you're going to see a fire sale of houses, everybody trying to get out and no buyers.
I've seen gold rise, but it seems to me that I have not seen it rise proportionately with anywhere near the understanding of a lot of what you've explained tonight about the state of the economy.
Is it going to be too sensitive for me to ask you about manipulation in our markets, Joseph, whether it be the metal markets, precious metals, or even the market itself?
I have watched some of the strangest happenings.
When the market gets very volatile, I actually will sit for hours watching the ticker.
You know, you kind of get to be, it's kind of like a drama.
You know, when it's really volatile, it is very dramatic indeed.
And there are times, Joseph, where I could just swear that somebody stepped in and made what was happening stop.
And I refer to a precipitous fall in the Dow.
I mean, just suddenly, really frightening.
And it's like there was nothing to change the atmosphere of selling that was going on, except suddenly it did change.
And somebody like myself sits back at those moments and says, hmm, I wonder if some large federal institution just did something.
There's a piece of legislation dating back to 1980, which very few people are aware of.
And that legislation is titled the Monetary Control Act of 1980.
You can go on the Internet.
You can find that legislation.
You can read it.
What it basically says, and the reason that that legislation or quite frankly was enacted is, as you know, in the early 1980s, there were serious problems with Mexico.
And there was a problem that Mexico would default on the indebtedness that it had to the U.S. And we had some big banks, money-centered banks, that were holding an awful lot of Mexico's debt.
Well, what happened, the legislators came ahead and they put in place the Monetary Control Act of 1980.
And what the Monetary Control Act basically says is the Fed can intervene in any market at any time.
And I think we have seen Fed intervention, and I think we've seen it in the bond market, and I think we've seen it probably in the stock market as well.
Joseph, it's certainly nice to have you on this program.
But as you mentioned, with what you have to say about what's going on with our economy, do you think that there will be a media position for you as sort of a, I don't know, there's a lot of people on the air who have talk shows and things like that about our economy.
But as you pointed out earlier, they're usually the types that are sort of cheerleaders.
And I understand that.
I understand why, for example, a president has to come out and say the basic underlying economy is sound.
That's usually a required statement when it's not.
Yes.
So do you think there'd be a place for somebody like yourself?
First time caller line, you're on the air with Joseph Meyer.
Good morning.
unidentified
Hello.
Hello.
Yeah.
I had a question, but first a statement about what he was saying earlier about the oil.
I think he's dead on there.
I was listening to, I'm not sure if he's familiar with Michael Parenti.
He's one of those Yale professor types.
And he has a book out called The Arrogance of Empire.
And he was talking about how the need for this oil as it's running out comes through.
And all these arguments we had for the war with weapons of mass destruction.
And that wasn't enough.
It was just that he was a bad guy.
Well, we have Azerbaijan where you have a joke of an election and where they boil their political dissenters.
Yet, how do we reward them?
We give them $50 million for their pipeline.
But I just think that was, he brings out that point very strongly in that even if it costs more than we get out of it, it's a certain set of people that are getting that money.
So they'll spend as much of the taxpayers' money as they need to make their profit.
I guess my question comes down to more of if he feels that with the disparity in wages between the different countries, Is it ultimately a point where we just have to get on equal, bring those other countries up to equal wages before we eventually see that?
Or is it just something that we're just going to keep losing and taking these lower wages?
Well, it's an excellent question, and I think the answer to that is, as you know, with the foreign aid that's been spent for many, many years, we tried to bring a lot of these undeveloped countries up to our standard, and we failed miserably.
I think what happened is we've basically turned now the economic base of this country into a third world country.
So we're on the same parallel with them, I think, labor-wise.
He started a recycling plant in Philadelphia, and he makes oil from water and trash.
And he showed on the Science Channel.
And I said, Art Bell's got to get this guy on.
I think we can pull out of there, and we can start making our oil over here.
They would be so busy figuring out what they're going to do, they would stop their fighting.
And he's got two plants, one in think Wilkesbury or Harrisburg, and one in Pittsburgh.
And then the other question is on this NAPDA thing and GAP.
I think that was a disgrace that we did because Seeds of Fire, he's a public figure, Gordon Thomas, I don't know whether you've heard of him, Art, there's a book out called China Behind the Attack on America.
I think eventually the Chinese, foreign countries are going to want to take this country over.
I've heard that they had a Chinese general on another show, but it was like an alternative radio, and you can't always get it.
And he says, those people want to take over this country.
We can't change the Middle East.
I'd like your comments.
I think we have to start taking care of our own.
I am so glad Ted Koppel did what he did the other night, Art.
Well, we've had more liquidity, I think, or it pumped into this economy than at any time in our history.
And I think when you take a look at the popping of the stock market bubble that we had in early 2000, if the Fed didn't come ahead and put the liquidity certainly into the economy, stock prices would have certainly fallen much more significantly.
But more importantly, the rally we've had after 9-11 has been, in my humble opinion, a liquidity momentum-driven rally.
I think when you take a look at the underpinnings and the fundamentals behind the propelling of this market higher, I think it certainly leaves a lot to be questioned why stock prices are significantly higher when we've not seen, I think, a real significant improvement in operating earnings of these companies.
Well, I think the market here, quite frankly, is very overvalued.
And I think if you take a look at any historic valuation that you would put to this market, I think where we are now, we're probably locked in to a trading range somewhere between $10,000 on the low end and probably the upper limits of the range $10,750 to $10,800.
But I think if the market were to break $10,000 on a closing basis, you really don't have good support in this market till about $7,500 in the Dow.
But longer term, again, people have a short memory.
Going back to 1980, and you probably remember this, one ounce of gold bought the Dow.
The Dow was $8.50, and one ounce of gold was $850,000.
And I believe before this bear market runs its course, and I think this is a secular bear market, and I think it is a supercycle bear market, and I don't think we make the bottom in this market till 2014, 2015.
And again, I strongly believe that one ounce of gold will buy the Dow.
And I believe we'll see 3,000 an ounce gold and a 3,000 Dow.
Well, I think once we get past the election, Art, and I think, quite frankly, the Fed stops pumping money into the economy.
We've had more liquidity come into this market than ever before.
Again, going back, as I'm sure you recall, Nixon closed the gold window in 1971 when the French were trying to convert dollars into gold when we were running the printing presses to try to pay for Vietnam.
So I think we are getting to the point where the Fed just cannot keep running the printing presses because eventually we are going to see hyperinflation.
Well, I think once we get past the election, no matter who would be in the White House, I think we are looking at these corporations, as I said earlier, having difficulty turning a profit.
I think the real problems, if we start to see worldwide interest rates go up, I think this bond market and stock market could be setting up for a nasty fall.
We have not seen rental prices pull back, Art, and these landlords are still getting very high rents from these prospective tenants.
But if I'm right on the economy and the economy continues to weaken, we're going to see these landlords having trouble collecting the rent that they're currently asking because people are just going to not be able to have that disposable income to pay the rent.
Now, getting back to this gentleman with this home in California, I realize that this is the strongest market in the country.
I realize he has significant equity in the home.
But I think you've got to prepare and you've got to think of the day when these homes stop appreciating.
And when they start to go down, I think because they're so inflated, they could fall an awful lot.
Well, I think as overheated as housing is, and people have said to me, you know, these prices are not that high, and I've said to them, well, I'll tell you, we may not be seeing the top, but this is sure as hell, not the bottom.
Well, I think you're absolutely right in your analysis.
I think people have confidence, and the confidence is that they can continue to borrow.
We're seeing people continuing to take equity out of a home, continuing to refinance.
Until we see rates move up significantly, and I would say, Art, that's probably going to be when we get these mortgages up another three-quarters or 1%.
I think if we see that, this real estate market is going to be setting itself up for a nasty fall.
Well, I think one of the things you would watch for is for continued weakness in the U.S. dollar.
And I think you would look at the other currencies around the world and see relative to the dollar if they're strengthening.
As you know, the strongest currencies have been the Canadian dollar, the New Zealand dollar, the Australian dollar.
So I think that would certainly give you a tip off along with watching what happens in the metals.
We've had a pretty nasty setback in the metals in the last couple of weeks, but I still believe we're in a bull market in the precious metals, and this correction end or pullback is an excellent opportunity if you don't own the metals to step up and start buying.
There's no rhyme or reason in terms of looking at the numbers, and I've got the Fed stats right up in front of me here as I'm talking to you on the Internet.
Yes.
Now, I'm also in Alberta.
We're the energy capital of North America.
We've got all kinds of oil exploration that's going on here.
And what I'm seeing up here doesn't relate into the numbers either.
And any type of modeling you try to do now, you can't go by it.
And we're so, I guess, dependent on information and data.
But you start running these things, and it shows clearly to me that there's something behind all this stuff.
Well, I think the information we're getting is certainly not accurate.
And I think a lot of people like yourself who have been around a long time and have used technical and fundamental analysis and models are taking a look at the statistics that we're being given.
And when you put them into the model, it doesn't add up.
Well, you know, the last time around, Art, you probably remember this, when we had that recession with President Reagan in 1983 and 1984, and we had very significant unemployment, and we knew it was a lot higher than they were reporting.
But what we found out later is they were actually calculating the military as part of being employed.
Warren Buffett, as you know, Art, is one of the most successful investors of all time.
He has been short the dollar now for a considerable period.
He's also sitting on about $35 billion in cash.
So this is somebody who has built a tremendous cash hoard that certainly thinks he can put that money to work at much lower prices in the equity markets worldwide.
Joseph, kind of an off-the-wall question for you, but somebody enjoying a nice, medium, well-to-do lifestyle these days, how much money should they, assuming they've paid off everything and they're okay, how much money should somebody have socked away to comfortably retire in their late 50s or early 60s?
Well, you know, Art, they came out and they said a couple of years ago that if you were earning $200,000 while you were gainfully employed, you were probably going to need a couple of million dollars to continue to give you that lifestyle.
I know when I first entered Wall Street and I had a dream of making $1 million and I thought that was all the money in the world.
But you can't retire today on $1 million with interest rates as low as they are and maintain any semblance of a decent lifestyle.
You need several million dollars.
Now, I don't believe interest rates will stay down forever.
And as you and I agree, they're going to go up and probably sooner than most people would want to believe.
And they're probably going to go higher than anyone could believe.
But you've got to have more money than ever before to maintain your lifestyle.
The cost of living is going up now so quickly.
Retirees living on a little pension and Social Security, folks, you're just not going to make it.
So then I guess you would advise people to be liquid, which you have to have cash, and then just to wait for the appropriate interest rate moment and then retire.
I wanted to ask Joseph about worldwide production of gold and silver.
I ran across an article in National Geographic several years back, and they talked about Kenneth Twitchell and how in 1931 he had recovered some 60 tons of gold in a mine that was in between Mecca and Medina in Saudi Arabia.
And to me, it just seems like the world is awash in gold and silver, and I didn't know what kind of consumption there was.
Well, I can tell you, going back in 1945, Art, the U.S. had gold reserves of approximately 22,000 tons.
We currently have about 8,000 tons.
So we've sold a lot of gold.
We came off the gold standard.
As you know, Roosevelt basically came ahead in the 30s and he confiscated all gold at $20.70 an ounce.
And once he confiscated it, he immediately pegged it at $35.
And gold was pegged at $35 right through in 1971 when President Nixon took us off the gold standard.
Right after that, we slowly started to see gold move up.
In 1976, it was the first time we had gold trade over $100 an ounce.
And then as we started to see the inflationary pressures from what the money was being put into circulation to pay for Vietnam, we started to see gold move significantly higher.
I think there is probably more gold out there and more be in mind that we'd like to believe.
But I think when you talk about silver, silver being an industrial metal with industrial applications, I think there's shortages of silver.
But when you look at what production has come forth in the last five years as far as silver production, we're first starting to see these mines now really produce.
And I think the reason for that, Art, quite frankly, is silver had been down for so many years.
And we're finally now seeing silver.
The 200-day moving average is $5.13 an ounce.
The 50-day moving average is only $5.87.
Silver closed yesterday at $6.05.
So I think silver will consolidate between $5 and $6 an ounce.
But I think the next time we go up, we did get to $8.50.
And they say today, with the career of corporate executives and Wall Street executives, that most times these guys don't spend any more than three and probably at a maximum five years in any one given job with any one given employer.
I think it's very bleak unless you certainly have the skills to be an entrepreneur.
I don't know where you take the education that you've certainly spent a great deal of money for.
If we're talking about engineers or we're talking about MBAs, I don't know where you go and earn the kind of money necessary to repay that student loan.
So the ones most likely to make it then are the ones who have an idea, who are entrepreneurs, and that they're going to get out there and start their own business or go off trading with a Chinese company.
I mean, they're the ones that are going to make it, right?
We've trained an awful lot of young people for the wrong thing, and I can't tell you when this economy and this job market would turn around to gamefully employ these people.
That's a pretty bleak picture, and we're about out of time, but it has been such a pleasure to have you on the air, and I just know its truth when I hear it.
It's not a message that's going to be very popular, Joseph, but I really admire you for telling it.
Well, Art, I thank you for the opportunity to appear with you and certainly be able to speak to your listening audience.
And hopefully, I've been able to give them some information that they were not aware of and that they can take that information and hopefully make their lives better.