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March 25, 2023 - Jim Fetzer
46:38
Edward Dowd on KITCO News - March 24, 2023
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I'm Michelle McCory.
Thank you for joining us.
The Federal Reserve has raised interest rates to the highest level since 2007.
And central banks worldwide continue to tighten in order to combat inflation.
Well, my next guest warns that we are now on the brink of a global sovereign debt crisis.
He's forecasting a very grim outlook for the United States, expecting a hard recession, more bank failures, a potentially controlled implosion that leads to the consolidation of the banking sector with a very dystopian end result.
Edward Dowd is the founding partner of Finance Technologies.
He has over three decades of experience in finance, including working as a portfolio manager at BlackRock, the world's biggest asset manager.
Edward, thank you for joining us.
Thanks for having me on today.
Very much appreciate your time.
Well, I appreciate your insight, as terrifying as it may be.
We have a lot to unpack, but let's start off easy with the latest from the Fed.
The Fed raising by 25 basis points its range to the 4.75 to 5% range.
Now, Jerome Powell is quite adamant that there will not be a pivot, saying that rate cuts are not in the base case, but the bond market is indicating otherwise.
The 10-year Treasury yield falling to 3.5% on Wednesday.
That's a drop from the peak of 4.2% in October.
The yield is down 14% over the past few days.
And you're saying that the Fed funds curve is pricing in a very different message from what Fed Powell will have us believe.
Break that down for us.
Yeah, so I haven't checked today, but as of yesterday after the announcement and after he spoke, the Fed Funds Futures Curve, which is the overnight lending rate, is pricing in for interest rate cuts.
So the bond market has spoken.
And the other indication is the three-month T-bill, which is not a futures contract.
It, in this rate cycle, has been trading above the discount rate set by the Fed.
And now, since the banking crisis has emerged with Silicon Valley Bank and others, the three-month T-bill is trading below the discount rate.
And so, there is a flight to safety and quality, and people are shortening their duration Selling equities and getting ready for a storm.
That's the wisdom of the market.
That's what the market is telling you.
So, people have different opinions about this, but I'm a market student, and when the market tells me something, I pay attention.
And the market's saying that Fed Chairman Powell is probably going to have to not only just pause, but start cutting.
And If this futures interest rate curve holds, I see an emergency Fed rate cut sometime in the next three months at a bare minimum.
That's my prediction.
And the other thing that I want to touch on that's very grim.
And again, look, I'm not a doom.
I'm not someone that likes to be gloom and doom.
I just study the facts and the asset markets and the economy.
My team at Finance Technologies, we do a lot of deep dive economic analysis.
We called a recession in November of last year.
And we, at the time, we saw a recession that was going to be on the order of the 2000-2001 recession and the 1990 recession.
Now, unfortunately, we're looking for a hard recession.
Hopefully nothing systemic like the Great Financial Crisis, but that remains to be seen.
What happened in November of 2022 was very grim.
The money supply, M2, year-over-year growth rate went negative.
And why is that important?
That's only happened five times since 1868, including this one.
The last time this occurred was 1930, the Great Depression.
So this is a big deal, and it's an indication that credit is contracting at a very fast pace.
And the lifeblood of all our economies is credit.
Absolutely.
And I want to break down that M2 thesis and what it means, but I just want to highlight what you said.
You expect an emergency rate cuts within the next three months.
Correct.
Now, what would likely prompt that?
Continued economic deterioration, more bank failures, something happening globally out of the Fed's control, like a sovereign debt crisis and or another major European bank going under again.
What's happened is was totally predictable when you raise interest rates after 14 years of 0 interest rates up 500 basis points in 12 months.
You have bond losses in what we're what are called safe even Treasury bonds that are safe from a credit perspective have massive losses.
So this is a this is a duration problem.
It's there's different types of risk in bonds.
There's credit risk, which is the great financial crisis.
This is interest rate risk or duration risk and it's just bond math.
And when you buy a bond at 1% and it goes to 5% you've lost a lot of money just that and so these bonds on the banks balance sheets.
And speculators' balance sheets have lost a tremendous amount of money.
Yeah.
And you're anticipating a total of four cuts this year?
That's what the market's saying as of yesterday.
That could change.
What I suspect is going to happen, again, I'm not in the room, but I think the things will get worse and the market's anticipating they're going to get worse.
And when they do get worse, the Fed will then have an emergency meeting and do a forced rate cut.
What kind of message would that signal to the markets?
How would that be received?
So there's some interesting data on this.
Everyone seems to think that when interest rates get cut, it's bullish for asset prices.
That's usually true in a bull market.
In bear markets, that's not true.
And we follow three different asset classes.
And whenever these three asset classes are in sync to the downside, it's called the checkmate charts.
They basically trump the Feds ability to control the money supply and we saw stocks peak in January of 22, commodities peak in June of 22, and what we were finally waiting for was interest rates to peak, and we believe they have, as indicated by the three-month T-bill below the discount rate.
So, when that happens, the Fed, and this happened in the 2000-2001 recession and the Great Financial Crisis, you have to remember the Fed started cutting rates in 2000, and the stock market didn't bottom until 2002.
They started cutting interest rates in 2007, early 2008, And we didn't bottom until 2009.
So if the Fed does what you suggest or I suggested and they signal that they're going to start cutting rates.
That's when the real damage begins, because it's an indication even they are fearful of what they don't know and don't see.
So, it'll be a very bad signal to the marketplace, in my humble opinion.
Yeah, as you've said, typically bad news has been good news for the markets, but there comes a point where the markets start to lose faith that the Fed can, in fact, march into the rescue here.
The Fed has been successful with its quantitative tightening program.
I mean, that seems to be working.
If we look at the M1 money supply, that's been down from $1 trillion from its peak in March of 2022.
That was, you know, by design.
But you've pointed, as you just mentioned earlier, to the decrease in M2 as a sign that we are in for a very nasty recession, as it's historically indicated that.
So break that down for us in greater detail.
So, typically speaking, recessions cause a contraction in credit.
And they're usually, they get close to the zero line, but they never really go through it.
So, we've had instances where M2 got close to year-over-year negative growth, but never quite got there.
Even in the Great Financial Crisis, we never broke through the zero line.
We're not even in the crisis mode yet.
And we're already below zero.
So what that says to me, and you know, other market participants that I talked to, are saying that credit is their defaults going on.
Credit is being withheld by banks and credit card companies.
So credit is contracting at an alarming pace.
And this doesn't bode well for the economy as a whole, because unfortunately, Credit is the lifeblood of the economy and the global economy.
And that's going to be a big problem.
And economic activity is going to grind to a halt over time.
Grind to a halt?
Yeah.
Well, like in the great financial crisis, the good news is inventories will be depleted and eventually it's a cycle.
And the Fed has been trying to prevent this cycle from happening for 14 years.
And unfortunately, all this easy money is going to make this hangover way worse than it could have been if they had let a recession occur earlier in this cycle.
But for some reason, The powers that be didn't seem to think the system could handle even the tiniest of slowdowns.
So we've had this lethargic economic growth for, you know, a decade plus of just very low economic growth.
Now, because of this insane propping up of the global economies with, you know, building credit debt upon credit debt, basically we solved the great financial crisis debt problem with more debt.
So now we're in an even worse situation than we were in 2008.
And so we have to pay the bill.
And the bill is in the form of defaults and bankruptcies.
So Edward, people can argue, we've heard this before.
We've heard that we are at an inflection point several times before, and the can just gets kicked down the road.
Why are you so sure that this is it, that this is the end of the road this time?
A couple things.
So what did we see last year?
We saw some things we've never seen before in the markets.
We saw inflation go from, you know, 1 to 2%, up to 9% headline inflation.
While at the same time, the US dollar was advancing.
In a commodity inflationary cycle, that's never happened before.
Usually, inflation is a function of monetary, is usually a monetary phenomenon.
So, we saw, we saw two things.
commodities going up and the dollar going up.
And my thesis then was the dollar going up is a sign of credit contraction globally, because a lot of international players have issued dollar denominated debt.
It's about $15 trillion in that debt.
So as the dollar rises, it's harder and harder for them to pay us back.
And so we suspect that due to the COVID lockdown, supply chain disruptions, that the Fed should never have started hiking in the first place.
The global economies are too fragile.
And we had some interest rate indicators that showed this is going to sound insane, but that the Fed rate hike cycle Should have been over before it started, meaning the three-month T-bill shot through the discount rate, and usually that's been the end of a rate hike cycle.
This time, they kept hiking into what I think was a global economic slowdown, and here we are.
And that's why I think this time it's too hard for them to turn on the money spigots and prevent what's going to occur from occurring.
I think it's beyond their control.
Okay, so we're starting to see cracks in the system.
We're certainly starting to see strain on the banking system.
As you mentioned, we've had the collapse of Silvergate, Signature Bank, Silicon Valley Bank in the US, Credit Suisse flailing in Europe.
Admittedly, that's always been a problematic bank, but we're starting to see major cracks in the system.
What do you anticipate happening there?
Well, so let's analyze something that happened over the weekend.
So Credit Suisse was married to UBS.
Yeah.
Shotgun wedding.
Yeah, a shotgun wedding.
And apparently the banking authorities and the government decided to throw out their existing laws on their books and rewrite the rules.
You only do that if what you're seeing is so terrifying you decide to, you know, discard the rule of law and make up new rules, because that is a tell.
So I'm an analyst.
When the authorities violate their own laws, that tells me something, that what they're seeing is a big problem.
So what I suspect, and I hope this unfolds, I hope they try to plug the dam and it's a slow, controlled implosion, because speed Kills.
Speed will get everything out of control and has unintended consequences.
So, I think they're going to continue to play what I call whack-a-mole.
They plug their finger in the dike, everybody, you know, breathes a sigh of relief for a couple weeks or months, and then there's another problem, and then they whack, and then all the way down.
I'm hoping that's the case, because, you know, to be honest, I don't want to see a fast panic.
That's not good for any of us.
And is this a similar scenario than that you're forecasting for the U.S.
as another bank potentially is on the brink of collapse?
And then as you say, regulators managed to sort of plug that hole while another one sprouts on the other side.
So elaborate, paint that picture for us.
What do you see happening in the U.S.?
The U.S.
is going to be similar to what is going on in Europe.
So the European Central Bank has problems.
The banks in Europe have problems.
We're going to see the exact same thing we saw with Credit Suisse and UBS.
We're going to see shotgun marriages.
Unfortunately, the Wall Street Journal, again, I'm not trying to foment panics.
The Wall Street Journal on Friday last week said 186 banks in the US, regional banks are in trouble.
So if that's true, which I think it is, it's gonna become increasingly difficult for them to stand alone and there'll be suitors and shotgun marriages is my analysis, my prediction.
And so the question I've been asked is, well, is this intentional?
Well, I don't know, but it's going to end up in the same place.
If you wanted to introduce a central bank digital currency, wouldn't it be better to only have six banks in the U.S., all systemically important, basically run by the government?
So it may not be a plan, but that's going to be what happens in my analysis.
And if it is a plan, well, it's quite an evil plan.
But again, I'm not in the room, but I see this unfolding.
Okay, let's unpack that a little bit before we start to break down the idea of a central bank digital currency, which for our viewers, as we've discussed on the show before, is a form of fiat currency issued by central banks, which is potentially programmable to work or not work in certain transactions and situations, and which also allows authority to monitor every single transaction made.
But before we break into that dystopian endgame, which you say may or may not be by design, We said 186 banks are at risk of collapse.
Well, I wouldn't say collapse, but the Wall Street Journal pointed out 186 banks that may have problems.
That doesn't mean they'll all collapse.
But again, this number is from the Wall Street Journal.
I don't want to be accused of fomenting fear and loathing, but that is reported by the Wall Street Journal, which indicates to me it's a serious problem.
So you're seeing essentially a consolidation of the banking sector, and I believe you've said that you anticipate six banks withstanding this crisis.
Yeah, the six US systemically important banks, and I think it's Bank of America, Wells Fargo, Citibank, JP Morgan.
Maybe Goldman Sachs.
I don't know.
I don't have the exact number.
I know there's the four big ones, JP Morgan being the biggest.
That seems likely.
To be honest, I hope I'm wrong.
I hope that does not happen.
Sure.
I live in Hawaii.
Bank of Hawaii does not participate in the capital markets.
They loan to state residents in the state of Hawaii.
It's a very conservative state bank.
People have been asking me if I moved my money out of the bank.
I have not, because I'm not worried about the Bank of Hawaii.
So there'll be some regional banks left, but the bigger ones are going to, I think, disappear.
They're in trouble.
And why is this so problematic to economic freedom, to have this consolidation of the banking sector?
Well, so Local banking is obviously better because a lot of bankers give credit based on personal relationships.
And if you consolidate to six national banks, it becomes very formulaic.
And those who are the buddies of the people at the top get the loans, and everybody else kind of starves.
It's not intended that way, but that's how it works.
And so local banking used to be the lifeblood of the US economy.
And it's at risk of going away.
And it's going to be harder to get capital if you're a small business.
If you're an entrepreneur, you're going to have to go begging to those who have all the capital.
It's a consolidation of capital.
It's too much money in too few hands.
That's monopolistic, at least in the old days, you could get a loan if you had a good business plan.
And we're an upstanding citizen, your local banker got to know you, they'd give you a loan.
That's going to go the way of the dodo bird and that'll have a, that's not good for freedom.
That's not good for people wanting to take charge of their own lives.
I've worked for giant corporations before and I'd rather work for myself.
And you're saying the endgame here then is going to be five or six major banks which are then subject to more government control and oversight, effectively nationalizing to some degree the banking sector, which you say paves the way for the central bank digital currency to be implemented.
So elaborate on that.
So I've looked into the central bank digital currency and I've watched some of their members speak about it.
The Bank of International Settlements, forget his name, made a speech about a year and a half ago where he basically said, it's basically, in his own words, it's a way to control how the money is used, essentially.
So, what does that mean?
Well, right now, $100 bill in your pocket, no one can tell you what to do with it.
But if it's in the central bank and you happen to be a dissident talking about an issue that the state doesn't want you talking about, you can be targeted and have your ability to transact stopped.
There's also a myriad of social controls that could roll out.
Let's say the state wanted to start worrying about cow methane farts and wanted to restrict the amount of meat that you're allowed to eat.
They can impose quotas, and if they get what they want, the tech not in your credit, everything will be linked.
You'll go to the cash register, ring up your meet, and the woman behind the cash register or man would say, I'm sorry, I can't transact this for you.
It's total end-to-end control.
That's what it is.
Yeah, you know, it's a very Orwellian scenario, but as you say, when the government is able to monitor your spending and program a currency to work or not work to enact certain transactions, or perhaps put a premium on if it's like, hey, you've flown 20 times this month for argument's sake, you've exceeded your carbon footprint with that regard, this doesn't work.
And to buy another plane ticket, or it does, but with a premium attached to that.
But what is the timeline that you're anticipating for these banks to collapse?
Because you said a controlled implosion.
So for these banks to collapse, for there to be a consolidation, and then for CBDCs to be rolled out, essentially roughly over what time period?
If they're going to control it, they need 12 to 24 months.
That's it?
Yeah.
24 months before we're down to six banks?
If it's controlled properly.
That's the controlled version.
Okay.
Yeah.
If it's fast, then chaos is unleashed and I don't want to talk about that.
Look, there's already executive orders been written by Biden about the CBDC.
There's already white papers from the Fed.
Things are rolling faster than I would have thought.
And, you know, look, if I was a central banker and I wanted to introduce a central bank digital currency, I would do it at the bottom of a crisis when everyone's begging for relief And everyone's in fear and then offer the solution.
That's what I would do.
I'm not saying that's what they're going to do, but if I wanted to, um, uh, get everybody on board, I would do it at the bottom when there's maximum amount of fear and people want to look to an authority to save them.
That's, that's, uh, that's the implication then that this is by design?
That's basically how these things are done.
That's how these things are done.
Is the implication then that this is by design?
I have no proof, but what I see going on is inevitably going to be that as it may.
I'm not in the room, but you could speculate that it's by design and you wouldn't be crazy for saying so.
No, you would not be crazy for saying so.
Again, I always like to reference that expression, don't ascribe to malice what can be explained by stupidity.
But there does come a point when there is just so much collective stupidity, where there is just one misstep after another.
Then one has to start to wonder if perhaps there is a plan somewhere.
And again, it's pure speculation.
And I hear your point that you don't have any evidence to back this up.
But let's talk about that executive order that you mentioned.
And that is Executive Order 16047 that President Biden signed into law on March 22nd.
And that does facilitate the development of a central bank digital currency or FedCoin.
And there has been progress on that front.
In fact, some people are saying that the Fed Now payment system, which will be fully launched in July, and coincidentally launched in the middle of a banking crisis, is potentially setting the rails for this.
But again, Edward, on the upside, there has been some pushback here from politicians against this.
We've had House Majority Whip Congressman Emma's pushback with the CBDC Anti-Surveillance Act, and he wants to make sure that there's oversight over the Fed before any kind of digital currency is issued.
He's maintaining that any digital dollar must uphold American values of privacy, individual sovereignty, and free market competitiveness, that that needs to be upheld.
We've had Florida Governor Ron DeSantis come out recently and say no, no CBDCs in Florida.
And create awareness of exactly what it is that a CBDC is.
And we've also had Senator Ted Cruz come out just this week and speak up against CBDCs and the potential threat that they are to privacy, to economic freedom, and how they can be an Orwellian tool of surveillance and control.
Senator Cruz introducing legislation to prohibit the Fed from establishing a retail CBDC.
So with this pushback, is this in fact inevitable?
Or is there some way that perhaps legislation or even protests can prevent this from being implemented?
Look, I certainly hope this can be prevented.
I'm very hopeful because there seems to be a very Great.
grand awakening of many people who used to think I was crazy.
All of a sudden I have lots of credential experts wanting to talk to me.
So this is not crazy talk.
This is what they're trying to do.
Whether or not they're going to use it for evil.
I mean, I'm of the opinion that when there's that much power, you will use it for evil.
That's just the way it is.
It's human nature.
And I have a lot of hope that it's not inevitable, but it takes a mass awakening of all sorts of people.
Shows like yours are doing that.
It's being discussed now at the political level.
And, you know, we can do our own personal protests.
I don't use my credit card.
For anything that I can.
So when I go to a restaurant, I pay cash.
When I go to Costco, I pay cash.
When I go to the gas station, I don't.
I avoid opting in even with credit cards or, you know, a rudimentary form of this.
But, you know, we all have credit scores.
Just start using cash.
And I went to Washington, D.C.
to testify before Senator Ron Johnson about another issue in December.
And I was in Dulles Airport and I went to go buy some water and they said we don't take cash and I held up my $50 bill and said this is legal tender.
I am NOT going to buy it.
And the cash register guy said, well, no, no, no, no.
I'll put it on my card.
You just give me the cash.
So he had already received this kind of feedback from many others and he had a side business where he was.
So the good news is it seems like people are at least of this cashless, this move to cashless is a first step before digital currencies.
And using cash is a way of protesting against this.
And I'd love to see everybody start using cash.
Just whenever you go out, have the cash, forget the credit card.
All right.
Cash is king.
Look, you know, Edward, you're saying that this is becoming, thankfully, more aware, that people in the mainstream are becoming more aware of this.
Now, we typically, you know, talk to people and they paint a similar scenario.
And one could argue, well, you know, they're in the gold sector.
They have an agenda.
Their agenda is to sell gold.
They're talking up their book.
Or on the flip side of that, because we're seeing similar themes and similar concerns.
Yeah, so I'm not marketing any products.
I'm an analyst.
And then similarly, people will say, oh, well, you know, they have an agenda.
They want to talk up Bitcoin.
That's the play here.
What would your agenda be in saying that this is coming?
I mean, this doesn't really feed into any of, say, what products that you're marketing.
Yeah, so I'm not marketing any products.
I'm an analyst.
I like to predict what's coming.
So I'm putting my reputational risk on the line, not receiving any kind of benefit from plugging Bitcoin or gold or silver.
I'm not involved in those markets.
God bless them.
I have nothing against gold, silver or Bitcoin.
But I'm just analyzing what I see coming.
So I'm just giving you my bona fide best guess.
And I've been in the credit markets and equity markets for 30 years.
And I know how the game works.
And this is where the analysis leads me to this end game.
OK, so we're still hopeful, though, that somehow the CBDC agenda could potentially be derailed if there is enough pushback against it, is what my understanding is.
But can anything derail the broader implosion that you're seeing?
No.
No.
There's going to be a new system.
The dollar is kind of at the end of its The dollar is a fiat debt-based credit system.
So, for every dollar created, there's an associated $1 debt.
And it needs constant credit creation to keep it going.
And M2 going negative is a bad sign.
And so, the reason why they want to introduce the CBDC is they know that we're kind of at the end of this epic super cycle debt bubble, and that it's going to implode whether they want it to or not.
So, if you know it's going to implode, And you're the people that designed this, or maybe you didn't design it, but you've come to the understanding it's at the end.
Wouldn't you want to introduce a new system and be on top of, uh, in control of that?
That's why they want to take us to CBDC.
I'm suggesting we need to protest that.
And we, the people, the global citizens need a seat at the table of the new monetary system.
Cause you know, for years and decades, the monetary systems are hassed out in backdoor.
So, we need to figure this out.
Bretton Woods, there's been a couple of those.
And then we delinked from gold in the 70s and we had the petrodollar.
And that gave the U.S. the ability to print unprecedented amounts of money and borrow as we basically exported our dollar-based fiat system to the globe.
So the globe has basically been funding the U.S.'s lifestyle for 30-plus years.
So we need to figure this out.
The question is, is the general population going to be aware of this or enough of us that we have a seat at the table?
If we don't have a seat at the table, then we have to create a new table.
And that's where, you know, the Bitcoin blockchain folks come in and there'll be a black market economy if we go the route of the CBDC total control.
That's my guess.
Again, I'm just analyzing.
You're just analyzing.
I get it.
No vested interest in any sector or any asset class here.
But if a CBDC is inevitable, you foresee a black market where potentially gold is used.
Bitcoin is used.
Both are used.
Yeah, there'll be something.
And, you know, if they win, I'm going to be part of the resistance.
Yeah, I'm going to I will declare myself.
I'll be part of the resistance.
My two gentlemen, Carlos and Yuri, at my firm, we're working on the Magic Juice vaccine issue.
We've done a lot of work there, but we've done that all pro bono.
We're going to next set up a hedge fund, and then we're going to use that to fund alternative systems down the road.
So we're already thinking ahead.
We're thinking that there's going to be other systems, and we're wargaming that out.
Okay, but again, before we get into, you know, the potential of a central bank digital currency and everything that that may entail,
Because again, that is still potentially preventable, although you're seeing the groundwork being laid with digital IDs becoming more and more prevalent, and that links to needing a digital wallet, and that links to central bank digital currencies, and you're seeing a breakdown of the system, which as you say, creates the correct setting for a great reset, if you will.
But somewhere along this process, you have said that you still anticipate the dollar, that you still are ultimately long on the dollar.
To fail up, I believe, was how you described it, especially as we have a global sovereign debt crisis with other economies being impacted by what's happening.
So explain that scenario.
Is the world reserve currency at the moment and there's $15 trillion of debt in US dollars.
So as, as the dollar goes up, it's an indication of, you know, credit stress globally and potential sovereign debt defaults eventually.
And if you're, now, people ask me, is the dollar going to go away?
Is it going to go to zero?
The answer is, I don't know.
But what I do know is the Federal Reserve wants to sit on top of the new world order, whatever that is.
So people say, oh, is the Fed going to disappear?
No, the Fed is trying to direct and control whatever comes next.
So I don't know what's going to happen after the dollar, whether it's a World Central Bank digital currency.
I don't know.
But what I do know is If you're in charge of the current system, you're not going to raise your hands and say, oh, golly gee, guys, sorry about that and walk away.
You know, you try to control and re-establish dominance.
And unfortunately, the central bank system is going, it's a system that's inherently unstable and it's led to wars in the past.
I see kinetic wars on the horizon, not just Ukraine, I see global conflict as a result of the dollar failing up.
Well, let's break that down because we are seeing a de-dollarization trend following the Russia-Ukraine conflict.
The increased weaponization of the dollar is seeing many countries move away from U.S.
economic dominance.
The BRICS Alliance, for example, will be discussing a new reserve asset to potentially rival the U.S.
dollar this August in Durban, South Africa.
We're seeing new alliances being formed very rapidly.
Chinese President Xi Jinping recently concluded a visit to Moscow.
Right before that, China mediated the resumption of diplomatic relations between Saudi Arabia and Iran.
Long-time foes now resuming diplomatic relations.
Both countries have expressed interest in joining the potential BRICS alliance, big commodity powers here.
We touched on the petrodollar that may be compromised.
We know that India has been purchasing Russian oil using rupees and rubles and Saudi Arabia has said that it's open to no longer pricing oil in dollars.
So, all of that sort of comes together and certainly threatens the US's role as the dominant global reserve currency.
Do you see this BRICS potentially commodity-backed currency As the rival to the dollar.
I'll pose a question to you.
Before that happens, what do you think the US and its allies will do?
There'll be a kinetic war.
So I don't, whatever's coming is going to be a global debt crisis with wars.
Unfortunately, again, I'm not, I don't want to be a doomsayer, but this is how, this is what my analysis leads me to believe is that if the dollar is under threat, those in power are not going to go gently into the night.
There'll be a kinetic something or other and, you know, there'll be a propaganda campaign to pitch it to the U.S.
citizens under the color of freedom and democracy, probably.
Now, I've always maintained that if you're the king of reserve currencies, you're not going to give up your throne without a fight.
And it does seem more likely than not that there will be some kind of military pushback, which you say does result in a kinetic war.
What would that war potentially look like?
Who's on what side of the conflict?
I think Europe and the U.S.
I think India would side with the U.S.
and then the others against that.
So, again, this is all speculation.
All speculation.
Yeah.
I mean, at the end of the day, We're careening towards a financial crisis, potentially an introduction of the CBDC and the BRICS not wanting to be part of whatever new system is developed because they know the old system wasn't very favorable to them because we've established our dominance through the U.S.
dollar.
That's really the secret weapon of the U.S.
government is the dollar and its world reserve currency status.
So it's our secret weapon.
And they know that.
That's why they're trying to do what they're doing.
And that, you know, like I said, there'll be decisions made internally at the highest levels of government that that can't be allowed.
And then we'll, you know, go to war or whatever that looks like.
That's again, just my analysis.
And yes.
Look, I hope I'm wrong.
No, I understand.
I hope you're wrong too.
I've had several guests on the show that have echoed a very similar sentiment.
And yes, I hope you're all wrong, but I think it's important to present these potential scenarios to our viewers so that they may best prepare for this type of event should it unfold.
So what should somebody watching this interview Hearing your analysis, understanding that it is mostly based on data analysis and speculation, but nonetheless, what should somebody do?
Well, I've been recommending to people to shorten up my investment advice.
I don't give stock-specific investment advice or timing advice.
I've been telling people for the better part of 12 months to raise cash in your portfolio as assets, risk assets go lower, and you can go back into the market at the bottom of this crisis.
And that's been a good call.
People have thanked me for the raising of the cash.
I don't think it's too late to do it still.
And, you know, if you're worried about your bank, which I'm not, if you're under the insured amount, don't pull your money out of the bank.
But if you have money well over the insured amount, You know, T-bills are not a bad option.
Three-month T-bills.
You can go to Treasury Direct, invest directly.
So that's the money aspect of it.
And you're also going to have to kind of get a new mindset.
There's going to be a lot of uncertainty, and you need to be comfortable with that.
You have to be comfortable with uncertainty.
And I've found that when you are, you actually are not in fear and anxiety.
You can then see the opportunities.
Because even though things are going to get crazy, there'll be lots of opportunities for those who keep their wits about them.
Have some cash on hand.
And look, the gold people, I don't mind people buying a little bit of gold, physical gold, silver, that's fine.
Don't have all your eggs in one basket.
I would have six months supply of food just in case.
And that's it.
That's the best you can do and live your life and look for opportunities when everyone else is losing their heads.
I mean, not to sound alarmist here, but usually these type of scenarios lead to public unrest.
Correct.
You know, should we be preparing for civil unrest?
Alliance, one of the top insurance companies, has political violence and civil unrest potentially sparked by an economic crisis as one of the top 10 global risks in 2023.
Is that something that you anticipate happening as the economy as the economy falters and potentially political strife intensifies?
Do you foresee things descending into some level of civil unrest here in the United States?
I don't want to be a doomsayer.
I can't control what other people do.
But if there is an economic collapse, and there's an understanding of all sorts of corruption that's surfacing as we speak, there may be some social unrest.
Because a lot of your viewers and a lot of the people I've spoken to on different podcasts, they're aware of what's going on.
So their mindset is good.
They're prepared.
Unfortunately, there are lots of people that don't have a clue as to what's going on, so they're going to be surprised and shocked by this, and their first reaction will be emotional, and it will be anger.
So, it wouldn't surprise me if we see social unrest when the realities that I see, and many of us see, come to fruition.
So, I can't control that, and I hope that people stay calm, but it's not a bad assumption to think there might be some social unrest.
Yeah, well again, to be clear, we are speculating, certainly not rooting for any of these scenarios, but just giving some analysis as these events unfold as to the way you think that they more than likely will play out, but hoping you're wrong.
Edward, finally, I know that you are about to release a report on the economic cost to the U.S.
of the COVID vaccine.
Give us a teaser of what we can expect there.
Yeah, so I've written a book called Cause Unknown, The Epidemic of Sudden Death in 21 and 22.
My team at Finance Technologies and I have done extensive research into the economic costs and what we call excess deaths, disabilities and what we just reported on this week, vaccine injuries.
So that's the three buckets and we finally get the last piece of the puzzle, which is vaccine injuries.
And I'll give you a teaser.
I won't give the dollar amount, but I'll give you the number of individuals that we believe were affected.
We've And we've estimated 300,000 vaccine deaths in the US.
We've estimated 1.36 million injuries and approximately 13, sorry, disabilities and 13.6 million injuries.
And that's these are people that chronically miss work and present sick often and miss a lot of work.
The data's there.
That's about 15 million individuals in the U.S.
we believe who have been damaged.
We'll put an economic cost on that next week, and that's about 5% of the U.S.
population.
And we think our numbers are conservative.
And to please Devil's Advocates here, why are these necessarily as a result of the vaccine?
Oh, we've established all the correlations analysis.
The excess deaths aren't specifically in the employed of the U.S., and What you need to know about the employed population of the U.S.
is that they're typically healthier and die at a much lower rate than the general U.S.
population.
That all flipped in 21 and 22.
Just one stat, group life policyholders, the most elite amongst us at Fortune 500 and mid-sized companies, they have 40% excess mortality in 2021.
That's ages 25 through 64.
And, uh, no, 18 through 64.
And, uh, the general us population had 32% excess mortality.
Uh, the difference is some had a choice.
Others were mandated and had to take the jab, especially at fortune 500 companies.
And, uh, what you need to know is the society of actuaries.
These are their numbers, not mine.
The society of actuaries.
Uh, they also did a report in 2016 that proved.
How great of a business this was for them.
Their group-like policyholders die at one-third the mortality rate of the general population in any given year.
And then the disability data from the U.S.
Bureau of Labor Statistics showed the same thing.
We saw an increase in the disabled of about 3.2 million from a base of 30 million in the course of 18 months.
1.7 million of them were employed.
So something has happened to the employed in our country.
Their health outcomes are worse.
So that's why we blame the vaccine.
Maybe it's just work.
What's that?
I said maybe it's just work.
Maybe it's just that they're employed and they have to show up for work every day.
Well, then we have a problem.
Look, either way, the results are so bad that if it's not what I think it is, what is it and why are we talking about it?
Look, sorry, gallows humor.
Humor is my Freudian coping mechanism of choice here when you're bombarding me with all of this potential death and doom and disaster.
But one could say, though, that you can take statistics and manipulate them and data to suit, you know, various different narratives.
What would you say to that?
And what would you say to people that say, OK, this guy's crazy, he's a conspiracy theorist?
Well, let's forget the excess deaths.
Let's just leave that off to the side.
Let's just look at the absence rates that have gone off the hook in 2022.
The absence rates in the U.S.
and the work time lost are very steady, very steady.
A trend line going like this for 20 years, 2002 to 2022.
We looked at well 2019.
It was like this starting in 2020 went up a little bit.
That's because there were lockdowns and people getting sick.
These numbers have gone to 13 standard deviations above trend in 2022.
2022 is 50% higher than 2019 in terms of work hours lost.
And the chart looks like this.
is 50% higher than 2019 in terms of work hours lost.
And the chart looks like this.
13 standard deviations is insane in my world.
Three standard deviations happens 0.03% of the time.
So let's just say, that's just the data.
Now, the explanation as to what's causing that, that's where we can have the debate.
But if it isn't what I think it is, what is it and why aren't the authorities pointing it out?
Because it's such a statistical anomaly, such a strong signal.
Our health authorities should be screaming at the top of their lungs that we have a new pandemic, which they're not.
And again, you lay out the case for this in your book, Cause Unknown, The Epidemic of Sudden Deaths in 2021 and 2022.
And you have an update with a report on the toll on the U.S.
economy coming up.
Edward, thank you so much for taking your time and giving us your very grim and hopefully inaccurate forecast, but important information for people to have.
Nonetheless, really appreciate it.
Thank you.
Look, if I'm wrong, I'd be happy, but I call it as I see it, unfortunately.
Thank you, Michele.
All right.
Thank you.
Thank you very much.
And as always, thank you for watching Kitco News.
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