April 3, 2023 - The Truth Central - Dr. Jerome Corsi
35:59
Jerome Corsi Podcast Project
It looks like the U.S. is headed for a period of high inflation and low growth, better known as stagflation. Dr. Jerome Corsi breaks down what's happening and leading to this situation on today's The Truth Central. One major sign of times to come is the recent report McDonald's is planning to cut several thousand jobs. This is not exactly encouraging, considering fast-food has long been considered a recession-proof sector of the economy.Dr. Corsi also digs deeply into the recent financial moves by Russia as the nation joined the OPEC cartel and struck a rather interesting deal with Japan.Visit Dr. Corsi's The Truth Central website: https://www.TheTruthCentral.comMyVitalC: https://www.thetruthcentral.com/myvitalc-ess60-in-organic-olive-oil/Swiss America: https://www.swissamerica.com/offer/CorsiRMP.phpBecome a supporter of this podcast: https://www.spreaker.com/podcast/the-truth-central-with-dr-jerome-corsi--5810661/support.
This is Dr. Jerome Corsi and I'm here today, this is Monday, April 3rd, 2023.
And we have a lot of really important economic news to talk about today with political implications.
It's been a very dramatic weekend, actually.
The announcement by OPEC that it's going to cut production It means that there's going to be a surge in price in gasoline, oil, energy costs around the world.
This is a dramatic move by OPEC.
What they essentially are saying is that they are recognizing that there is an economic slowdown going on globally.
We're going into a global I think very serious recession, very deep recession.
And OPEC likes to keep the price of what it sells in oil up.
The way to do that, of course, is to cut production.
So, oil prices have surged.
Brat oil is trading above $84 a barrel, jumped about 5% over the weekend.
Economists are warning basically that higher oil prices are going to make it very difficult for the Federal Reserve to bring down the cost of living.
Of course, with the price of oil going up, that's a major inflationary factor because oil, which is still the backbone of all energy consumed in the world, There's green energy.
Wind and solar is a very small percentage of all energy generated in the world, and it will be for a long time.
The wind and solar are just not enough power to them.
They have to be stored.
They're not a very efficient form of energy.
So when the price of oil skyrockets, you can expect there to be a massive increase in inflation around the world, because everything produced with oil is gonna cost more.
It's not just putting gasoline in your car and getting to work.
And that means also it's going to be very hard to make the standard of living go up.
Because as everything, including food, gets more expensive, dependent upon oil, you're going to see dramatic increases.
Now, one of the key issues of this is that Saudi Arabia, Iraq, several of the other Gulf states said that they're going to cut the production by more than 1 million barrels of oil a day.
And Russia is going to extend its cut of half a million barrels per day until the end of the year.
So BP, energy giants BP, British Petroleum and Shell, saw their share prices rise more than 4%.
Of course, when the price of oil goes up, the oil companies make more money.
Essentially, it's counter to what the Biden administration wants.
This is going to put a lot of pressure on many, many household finances.
And it's the beginning, I think, of a very deep recession that's been building for some time.
Now, the oil production cut, which includes Russia, because Russia's part now of OPEC.
Russia's joined with OPEC.
Russia's getting increasingly close with Iran, with Saudi Arabia.
Biden pretty much insulted Saudi Arabia earlier this year.
But the problem we are facing is that the world is polarizing very rapidly into blocks where we're now having essentially China and Russia joining forces again and opposing the United States.
It's reported last week there's a move to trade oil in China's Yuan And the dollar is losing its reserve currency status, which is also not good news for the American public.
The dollar has been the world's reserve currency since the end of World War II.
Now there's another story I think is equally important in the news it's developing, and that is Japan has broken with the U.S.
and the E.U.
Japan has decided they're going to buy Russian oil at prices above the $60 a barrel cap.
Now, if you recall, the EU tried to punish Russia with sanctions, economic sanctions for invading Ukraine, and Russia in turn cut off natural gas to Europe, and Europe has been very dependent upon natural gas from Russia, and without that gas, Europe had to struggle to find other sources of natural gas to get through the winter.
Fortunately, we had a mild winter in the United States and in Europe, but still the prices of energy in the UK and in the EU and in the United States have all skyrocketed.
Now, if Japan has broken And is going to buy, with the EU and the US, is going to buy Russian oil at above the cap.
And that cap, by the way, Russia scoffed at that cap.
They said, you only want to buy it at $60.
Well, fine, go find somebody who wants to sell it to you for $60 a barrel.
We don't.
And so Russia's found countries that are happy to pay the going price for Russian oil.
Japan is one of them.
It had been before India and China buying most of the Russian oil.
Now, Russia's opened up a major market in Japan.
Japan is very dependent on fossil fuels, and this is not going to stop any time near soon.
You're going to see Japan Moving away from the United States, even with regards to Ukraine.
Japan has not supplied, it's a group, Japan is one of the group of seven nations, and it's the only one that will not supply lethal weapons to Ukraine.
The prime minister in Japan, whose name is Fumio Kishida, was the last G7 leader to visit Ukraine after Russia's invasion.
I mean, Japan is not as close to Russia now, and essentially, Tokyo is committing to back Russia getting oil rather than backing Ukraine.
The oil purchases, while they're not huge, Do represent a break of the unity to impose this $60 a barrel cap on Russia.
Once that's broken, Russia is going to have a much easier time selling its oil for what it wants, and the world will have a harder time capping the price of oil.
The idea of a price cap is really pretty silly.
You know, if I own something, you know, and I say, you want to buy it, you know, and you say, well, I'll only buy it at $40, and I think it's worth $60.
Or whatever I want.
If you were bidding me something low, I don't have to take it and go find someone who wants my price.
And that again is part of the difficulty of a price cap.
It's very convenient for the buyers, but it does not necessarily restrain the sellers unless the buyers can contain the market.
If there's unity in the market, then you may be forced to sell at their price, but there's no unity in this market.
In fact, the world is now rapidly lining up in a way that has China and Russia opposing the United States.
With our weakened dollar, that's going to be economically extremely painful.
Producer Chris, do you want to comment on this?
I'll give you a second here now.
I'm right here, yes.
It's funny because Russia's playing a pretty hefty chess game.
I understand.
The big thing was one leader is playing four-dimensional chess while some of the rest of the world are playing checkers.
That's been talked about for years upon years.
However, this is what I believe Vladimir Putin is doing.
We have to understand his mentality is he didn't like the idea of Ukraine and Finland joining OPEC.
He wants to reunite the old Soviet Union and go down forever in history as the guy who did that, so his ego plays a big part in this as well.
That's important to note.
The thing is, though, when it comes to the oil situation, he sees where he can take advantage.
OPEC, the traditional OPEC nations now, they believe that they can set oil prices and make people pay whatever they make them pay, especially now that America is not energy independent anymore.
On the other hand, Vladimir Putin, this is my perception of this, Vladimir Putin sees a political advantage in saying, hey, wait a minute, so now we can get some nations that are fairly powerful, whether it be military-wise or technology-wise, the latter being Japan.
And I can offer them oil at a better price than the cartel can at this point, and they will do some more business with me in the future, and perhaps stay with me on this whole Ukraine-NATO issue.
He's building alliances through finances.
A couple points, I think.
One is that Russia's part of OPEC now.
I understand that, but does Vladimir Putin... Do we expect him to play by their rules?
Well, I think Putin actually likes the price reduction.
That's going to push the price of oil up.
In other words, if OPEC reduces the production and Russia wants to sell oil above the cap of $60, right now oil is selling at above $80.
I mean, I'm watching it in the market right now.
Crude oil in the United States is trading at just over $80 a barrel.
And so therefore, Russia has a market out there for above the $60.
The $60 price cap of Europe is effectively done.
And this joint move by Russia, opening up a new market in Japan, and OPEC cutting production, is fitting right into Russia's plan to be able to sell what it wants.
And Russia also is cutting production.
They're going for more money for the less that they're selling.
And that's a very smart strategy.
I believe we're going to find that this is a boost to Russia and China and OPEC, and it's going to punish Western Europe, the EU, and it's going to punish the United States.
Chris, why don't we just take a minute?
We've done a lot of work on the website, and just for a minute I want to show people that You can find our, why don't you demonstrate it, Chris, because you put the website together, but I want to show people where they can get all of our social media, where they can watch our podcasts.
Why don't you take a minute and just show people how to navigate through the website?
That sounds terrific.
I shall do that.
So, having said that, we'll switch on the website at this point and give me a few moments for that because I was working on another photo for you and it was the oil charts.
I was watching that.
It's not very pleasant.
We'll put it that way.
The oil charts are not very pleasant right now.
They're going to get worse.
I think it's going to $100 a barrel.
An oil, I envision, could go as high as $150 or $200 a barrel.
And I think that could happen in the next year.
Absolutely.
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Let's get back to the news.
The next thing I want to cover is this Dr. Nouriel Roubini.
I've followed him for years.
He was predicting the subprime mortgage crisis in 2008-2009, and I find his analysis of economics extremely important.
Now, what he is saying essentially is that we're coming into a stagflationary mega-threat Now, he wrote a book called Megathreats, and what Rubini is saying is that we're facing a global liquidity crisis, and the world is over-leveraged with debt.
His argument is essentially that the central banks, including the Federal Reserve, can only produce economic growth by producing bubbles.
And the Federal Reserve has done this again by keeping interest rates at close to zero, starting with the Obama administration.
Obama was faced with the subprime real estate crash in 2008 when he came into office.
That was generated largely by the Democrats.
And believe me, I'm just as opposed to the Republicans today as I am to the Democrats.
I think they're both... I think the Republicans today are just Democrat-lite.
I think the Democrats have become outright extreme leftists, neo-Marxists virtually, and I'm arguing the Democratic Party is no longer a liberal party as such, not classical liberal.
At any rate, the point is that with that kind of a hit on the economy, the Federal Reserve decided they would help Obama by keeping interest rates at zero, and they did that consistently throughout the Obama administration.
Now, we've recently had, as you're all aware, an increase in inflation to the point it was the pandemic, where the government just printed money.
The federal government is operating under this modern monetary theory.
Which essentially says that since we have fiat currency, we can have as much debt as we want, because we can always print more currency to pay off the debt.
I guess our debt's at $30 trillion, our national debt, so you just make a $30 trillion coin and say, there, you're paid off.
Well, I mean, that's fairly, that's the problem with fiat money, is that it's not based on anything, so therefore it's completely made up.
Fiat in Latin means let it be.
It's like saying magic, you know, okay, we want money, here it is.
Well, that works up to a certain point, but what Robini is saying is that The central banks have triggered this by just simply handing out money during the pandemic, when we had a lockdown, when the economy went into shutdown.
And now we've got a narrative that this is, you know, everybody's saying, oh, well, the Fed will ease up on interest rates.
What Rubini is saying, as long as the interest rates remain high or continue to climb, which I believe they're going to have to do now, especially with the OPEC news and Japan buying oil from Russia, we're going to have much higher energy prices.
If you'll watch at the pump, I think you're already going to see the gasoline prices going up across the country.
So as long as the interest rates remain high or climbing to higher levels, Debt, new and old, is going to get more expensive to finance.
So what we've seen in the past 14 years with these near zero interest rates and easy fiat money circulating through the banks, now that nice little dream of we could just make economic activity happen is going to turn into a nightmare.
Roubini says basically that the exposure of banks like the Silicon Valley Bank To bonds with declining values.
So the Federal Reserve bought trillions of dollars of our own debt, treasury bonds, and the Federal Reserve urged banks to buy trillions of dollars of treasury bonds, saying they're safe, they're treasury bonds, they can't default.
Well, the treasury bonds issued when interest rates are zero, today when interest rates are going north of 5%, those bonds have to be sold at a deep discount.
Which means that the banks have to take an asset hit.
They have to mark down their assets when they mark their assets to market.
The result is that the banks like Silicon Valley may not have sufficient asset ratios to remain in operation.
They don't have enough liquidity.
Remember for banks, the deposits are liabilities.
They have to be paid back.
Loans are assets.
Right now loans are going to begin defaulting again.
With higher interest rates, commercial real estate is in serious trouble.
And the mortgage market is also very, very stagnant because of the high interest rates and the high cost of financing mortgages.
So we're having here basically a perfect storm.
That is caused by too much debt, federal government debt, personal debt, etc.
So, banks like Credit Suisse, which are one of the major banks, one of the premier banks in the world, just folded, had to be bought by UBS, another big Swiss bank, and you've got the bond market and the mutual fund market, Which has all of this ESG related investment, which is basically green energy investing.
And those investments are imploding as well.
Investors are saying, I'm happy to do green investing, but not at a cost of a lower return.
So essentially we're going to have a credit crunch.
We're going to have stagflation.
Stagflation is Increasing interest rates and slower economic growth.
It's what happened in the 1970s.
We had a combination here of Jimmy Carter, the 1970s, and the subprime mortgage market crashing, which is the banks having a crisis.
So we've got both OPEC and bank crises combining what went on in 2008, 2009, with what happened under Jimmy Carter.
And what Rubini is saying, I think correctly, is this is going to be a combination of a double whammy, which is going to hit the economy globally very, very hard.
The way Rubini is talking about it is going to be just short of essentially a depression.
In a recent statement, he was on television recently, and he said the problem is both simple and complex.
Central bankers engineered a systematic addiction to easy credit while delaying the pain from the 2008 derivatives crash.
Derivatives are these very complex bets that are made, and there's trillions of dollars in these bets.
When things like mortgage-backed securities crash, or banks crash, the derivatives start crashing.
The derivatives start crashing, the whole house of cards comes down.
This will impact very, very big institutions, and I think it's on the way to consolidating banking into a few giant international banks.
I believe the powers that be, the World Economic Forum, oligarchs, want to eliminate a lot of the community banks, a lot of the regional banks.
They want to be able to go to the digital currency, central bank digital currency, and as such, they're only gonna find banks that can handle that kind of currency.
Now, in the next story, McDonald's, over the weekend, this was a surprise, McDonald's not only announced that they're going to have a massive layoff across the United States, But they also shuttered, closed their corporate offices, which is, I think, pretty surprising.
The Chicago-based fast food chain sent an internal memo to its employees over the weekend, informing them that the corporate offices will be temporarily shut down during the first part of this week.
Now, what that means, I'm not sure.
It means they're closed right now.
When they reopen, I'm not sure you could predict.
The email told staff to work remotely, allowing management teams to communicate layoff decisions virtually.
Now, that's not good news.
That would suggest to me that a lot of corporate employees are going to get laid off, and McDonald's is increasingly moving towards these completely automated robot food stores.
I mean, you're going to go into a McDonald's, there's going to be no employees.
You're gonna punch in what you want, it's gonna be delivered to you.
It'll be made in the back room by robots.
The fast food industry is rapidly moving in this way.
Now, what, again, this means is the layoffs that we saw in the tech industries are now expanding into the fast food industry.
That's gonna be a crippling blow to the economy, because, again, these things cascade.
If there are fewer employees, there's going to be less money to spend in the economy under stagflation.
Those who are laid off are going to be facing higher prices, which lower the standard of living.
And it's not going to be an easy ride, because we're not going to get rid of this problem without fundamental changes.
In other words, a lot of banks have to fail.
A lot of banks will fail.
The international finance system's probably going to collapse.
It just can't handle this amount of debt.
With higher interest rates, the debt service is too expensive.
In other words, when you buy a home and you've got a mortgage, paying off that mortgage at 2% is a lot easier than paying it off at 5% or 8%.
And your monthly mortgage payments skyrocket.
Which means that houses that were one time affordable become unaffordable.
If you have an adjustable rate mortgage, you're going to get hit with a massive increase in your monthly mortgage cost just to pay additional interest.
This is going to reverberate throughout the economy.
Just like when I said the energy prices impact the entire economy because so many products are made with oil.
They're not going to be made with wind and solar.
It's not effective enough.
Despite how many billions we might throw at it, like Obama did with Solyndra, we're not going to be able to magically make solar and wind a powerhouse over oil, natural gas, and coal.
And what Japan is doing, what China is doing, what Russia is doing, what India is doing, is they're saying the United States and Western Europe are committing suicide with the Green Agenda.
This is the book I've written, which is The Truth About Energy, Global Warming, and Climate Change, and I've made the point repeatedly That going off of hydrocarbon fuels is economic suicide for the modern industrial state.
The neo-Marxists who have taken over the green agenda are demonizing carbon dioxide because hydrocarbon fuels emit some carbon dioxide.
Well, if they can scare you that carbon dioxide is going to warm the planet, we're all going to die.
This is the most effective ...argument ever crafted to end capitalism, which is what the goal of the neo-Marxist left is.
So, they know what they're doing.
And I think they also know in the IPCC, the Intergovernmental Panel on Climate Change of the United Nations, knows that the climate science of global warming is nonsense.
Carbon dioxide is a trace molecule in the atmosphere, 0.004% And water vapor is 70% of all greenhouse gases.
Greenhouse gases are not toxic.
They are what keeps the radiation that we get from the sun from escaping at night.
Without greenhouse gases, this planet would not be habitable.
It would be too cold.
So we need greenhouse gases.
We're in an interglacial warming period right now, which is beneficial because life thrives on Earth when it's warmer.
We will go through another ice age.
They occur about every 100,000 years, and they're not a function of carbon dioxide.
They're a function of how the Earth travels around the sun.
Our orbit's elliptical.
It's egg-shaped.
When it gets more elliptical, further out we get from the sun at the extreme, that's when we get ice ages, and it will happen again.
It's not gonna happen tomorrow.
Probably won't happen for 10,000 years or more.
But we're right now should enjoy the interglacial warming period.
And the fact that the sun is today in one of its more circular orbits, it won't last forever.
So what we're saying here today, I think it builds a case.
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And by the way, silver, I think, will appreciate at a faster rate than gold.
Gold could double.
I think gold could go to $4,000 an ounce and get going through what we're going through.
And I think silver will increase faster because it's much less expensive right now.
But it's going to be a good idea to have some gold and silver when the paper dollars that we hold, we used to hold them in our wallets, now we just hold them electronically, are going to depreciate in value.
These are not, this is not speculation.
The news is showing that what I'm talking about is happening every day.
Chris, any final comments before we wrap up?
Oh, yeah.
Well, let's see.
I wanted to step back to that McDonald's situation.
The problem I'm having with this whole idea of automating the entire restaurant, not only will we see massive job loss and it will ripple throughout the rest of the economy, as you know, because there'll be more people on unemployment, there'll be other businesses trying to do the same thing, and there'll be a lot of people left behind.
I don't like it because if you're a customer, from the customer's point of view, have you ever thought about when you're using those touchscreens anywhere, how many other people who've never washed their hands or who are very sick might be... I'm not joking, might be... No, you've got a good point.
You could see a potential liability issue.
In the future.
And another issue about this is there was always, every recession, there was always that list of 10 or 15 recession-proof businesses.
Fast food was always one of them.
So this probably opens up a lot of other things and I do believe that the AI situation might have something to do with this.
Maybe these companies want to cut out some of the middlemen, or maybe less people, and I don't have the numbers on this, maybe less people are actually walking into some fast food restaurants anymore in favor of more healthy fare.
Well, there's a combination of things.
I also think the automated fast food restaurant is going to be an impersonal experience.
I mean, the user experience.
of dealing with robots is not going to be the same as dealing with human beings.
And moving into this kind of a society, we're undergoing a fundamental shift right now.
These are not minor changes.
And how they're being architected and clearly some of the arguments like Rubini is making is that the Federal Reserve, Rubini is actually questioning
whether we need a Federal Reserve.
He's actually questioning whether central banks are useful and I think he's got a very good
argument. We could have used him back in 1920. Well, we could have used him in 1920.
There we go.
When Woodrow Wilson had this... Woodrow Wilson was a Hegelian.
Right.
And he taught Hegel and studied Hegel when he was at Princeton as a university professor.
And his whole plan for World War I was a Hegelian idea.
And Hegel with his dialectic is really fundamental to the Marx's dialectic.
The Hegelian dialectic is Again, one of the driving forces of this new woke movement that we're seeing.
And it's very negative, it's very destructive.
But Rubini's point on Federal Reserve is that it can only generate bubbles.
It can print money.
And especially since we've gone off the gold standard.
Richard Nixon took us off the gold standard in the 1970s.
There's no limit to how much money we can print.
And our debt has accelerated dramatically.
It doubled under Obama and it's doubled again.
And we're now $30 trillion in national debt, which is more than our gross national product.
So, you know, our GDP, gross domestic product, as soon as the national debt exceeds the GDP, this is one of the alarms for most economists.
That's a dangerous range to get into.
At the same time, modern monetary theory, we can just print money, which we did during the pandemic, and hand it out, where everybody likes getting free money.
But the problem is, the more money in circulation, the more money supply, the less valuable money is.
So, since we went off the gold standard, we've increased dramatically our national debt, our personal debt, and the value, the purchasing power of the dollar, has dropped dramatically.
And these are predictable economic laws.
You can't just wish them away with a magic wand.
That's how the economics are going to work, and it's happening again, and I think we're headed into a perfect storm here, which is not going to be pleasant to ride through, but we're going to be calm.
It's one of the reasons I've decided to come back.
I really want to I needed a little break after the Mueller, and I'm still disappointed the Supreme Court did not examine any of these cases, especially one that was backed by, I believe, 30 states, asking the Supreme Court to examine the constitutional provision that only state legislatures can make the rules for national elections.
That's not what happened in 2020.
And the Supreme Court, I think, was negligent in not taking up that case.
So, it's going to be very interesting what we go through the next period of time.
I can only say, as I always say in wrapping up, that in the end, God always wins, and God will win here as well.
But the ride may be a difficult one.
This is Jerome Corsi.
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