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April 27, 2022 - Health Ranger - Mike Adams
01:03:50
John Rubino interviewed by the Health Ranger: the long drift towards oblivion
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Welcome to Brighton Conversations.
I'm the founder of Brighteon, Mike Adams, and today we're joined for the second time, a repeat visit from John Rubino, who has become an instant audience favorite for his information about the economy, finance, gold and silver, and also how that works into the current coronavirus pandemic.
He publishes dollarcollapse.com and has a free email newsletter you may want to sign up for there.
Sends out two to three emails a week with his original articles and analysis.
He joins us today to talk about what's maybe going to happen over the next few months.
John, welcome to the show.
It's great to have you back on.
Hey Mike, it's good to be back.
Well, like I said, our audience really loved the interview that we did with you last time.
It was the first time you and I had a chance to speak.
Now, since then, there have been developments in the coronavirus bailouts and things like that, notably the coming up on the end of the, what's it called, the CARES Act paycheck bailouts for workers across America.
Let's start with that.
What do you think the implications are for when that runs out toward the end of July here?
Well, I think the implication is a slowing economy.
They gave a ton of money to people in the form of, like you said, enhanced unemployment benefits and mortgage forbearance, in addition to the original $1,200 a month that they gave to every adult.
Those things are running out.
You know, a lot of people probably expected by now for normality to return and we'd all be back to work and everything, but it's not working out that way.
A lot of states that opened are kind of taking it back because it didn't quite go the way they hoped that it would.
And so they're reimposing mask mandates for stores and closing down.
You know, California just issued a long list of types of businesses that had been opened that now have to go back to being closed again.
So I'm in Washington State and I'm living in fear of them closing down my health club.
Right.
Because it looks like something like that is coming.
But anyhow, that implies a slowing economy.
So what do you think should be done about the ending of the paycheck bailouts?
It seems like mostly Democrats want to extend these benefits until normalcy is reached, which sounds like could be 10 years.
And Trump is saying he wants to tie it to a payroll tax cut in order to sign that legislation.
So what do you think is the right answer here?
Well...
I don't know if there is the right answer because new information keeps coming in.
You know, this is a moving target.
And what the experts said three months ago is somewhat different from what they're saying now, and it'll probably be somewhat different from what they say two or three months from now.
So I really don't know, but I am, you know, it's obvious that they're definitely going to do something.
They're going to dump a bunch more money into the system one way or another.
It might be through It might be through payroll tax cuts.
It might be through direct payments.
It might be through more small business loans.
And there are lots of other ways to do it.
You could go to full-on universal basic income in a situation like this, and it would be politically popular.
You could just mandate.
You know, a thousand bucks a month for every adult going forward in perpetuity.
And I wouldn't put that past a government that's heading into a presidential election.
So there's no real way to know what we're going to do exactly.
But it is going to adhere to the script, the sound money script, where there was a currency crisis coming in the future, of the World hitting kind of a wall financially, forcing all the big governments to bail out everybody in sight, which spikes debt levels around the world and spikes the global money supply and starts pushing down the value of currencies.
And then you've shifted all the pressure over to currencies and you get a currency crisis.
We're adhering to that script, although the details are unpredictable right now.
We don't know how.
What form they will pump a huge amount of money into the system in, but we know they're going to do it.
They're going to create tons of new currency, whether it's dollars or euros or yen, and they're going to give it to us, or at least to the big banks somehow.
Yeah, they're going to stick it to us.
Maybe more of the word to use there.
We'll talk about the dollar collapse shortly, but isn't it a contradiction, though, to say that we want the economy to recover, but we're going to continue to pay people to stay home and not work and actually incentivize them to avoid working because they make more money not working?
I mean, I've experienced this directly.
In our warehouse operation, our food and supplements fulfillment business, we have a very difficult time finding anybody who wants to work.
Why should they?
They get paid more to stay home.
And if these benefits are extended, how are small businesses exactly supposed to function?
Restaurants, landscape companies, hair salons, Main Street, USA, how are they supposed to function without a labor force?
Yeah, I don't know.
I really don't know what the right answer is for this.
I mean, normally it's pretty easy to take the libertarian prescription for whatever's going on, which is to say, scale back government spending, rein in the money supply, and let the market work its magic.
This is way trickier because there are health concerns that I'm unqualified to address.
You know, you are the expert in this conversation on pandemics and viruses, and I'm just a finance guy.
So I don't know what the right answer is, but based on past history, it's going to involve a ton of money printing somehow, someway.
And yeah, if there are some incentive issues, That negates some of the benefits.
That wouldn't be a surprise given how the governments of the world are kind of flying blind.
Like, they don't know what the right answer is either.
You know, different countries are trying different things.
And some of them are working better than others, but none of them are working completely.
Because it seems like the virus is a very tricky bug, you know?
It seems like even if you catch it, And then you have antibodies, they don't stay forever in your system and you can get infected again, which really complicates things.
So I don't know.
And that means that the fact that nobody really does know what the right way to do this is.
That we're going to make big mistakes and it's going to lead to some kind of a financial crisis.
Or it's going to bring the inevitable financial crisis into the present from the intermediate term future.
So that is, I guess, really the story.
This is going to go on for a while.
Oh, go ahead.
Well, it just reminded me of this question that gets to a lot of your work, which is the money printing machine, the US Federal Reserve, Treasury debt, and so on, relies on the willingness of counterparties around the world, other nations, other central banks, and so on, other economies, to accept the dollar as something that holds value.
And as this money printing continues, now into the almost $6 trillion just from this pandemic alone, I mean, trillions of dollars!
And one month, June, almost hit a trillion in one month, by the way.
Is there a point that's reached where maybe the Fed has $10 trillion on its balance sheet and more money printing is in the works, where other counterparties just say, I'm not sure I want to accept these Federal Reserve notes anymore?
Is that point coming?
Oh, yeah.
I mean, it was always coming, but this is bringing it a lot closer.
In the Austrian School of Economics, which I think is the only branch of the economics profession that actually seems to understand the situation that we're in, they have this thing called the crack-up boom.
Which is a point at which governments have been bailing out everybody in sight like they are now.
They've been creating huge amounts of new currency.
They've been encouraging people to take on very risky debt.
And a critical mass of people realize that it is explicit government policy to make the currency worth less and less year after year in order to bail out all these debtors who would go bankrupt otherwise and cause a depression.
And so those people who see this coming Don't want to hold the currency anymore, so they just dump it in the form of spending on real assets.
In other words, when they get their paycheck, they buy something real that governments can't create more of on an electronic printing press, so they buy gold and silver, farmland, other well-chosen kinds of real estate, like a good rental house in a college town that's not too cyclical, things like that.
And the price of those things go through the roof, which just exacerbates the problem because that's, in effect, that means the dollar is going down against those things.
And so you get this kind of death spiral in the currency.
But it's not necessarily because of the supply of that currency going through the roof.
It's because people lose faith in it.
Right, and the smart people took the bailout money and bought gold with it.
Yeah, that was one of the smarter things you could have done at the time.
And so magnify that number of people by 10,000, let's say.
And you get a critical mass of people around the world who are all acting that way.
And then it becomes kind of a self-fulfilling prophecy.
And you get this massive currency crisis.
Now, the tricky thing in today's world is that everybody is screwing up like this.
So is Germany not going to want to hold dollars anymore if it means they have to hold euros instead?
Maybe not.
So it's possible that the dollar stays relatively strong.
Compared to other currencies, at the same time, all of them are declining in value at an accelerating rate relative to real stuff.
So you get this kind of weird world, which is kind of what we have right now, where the dollar is quote-unquote strong.
But only in the context of a bunch of really weak, crappy currencies that are all heading south at an accelerating rate.
So it won't be extremely clear what's happening at first.
It'll just be that the price of real things are going up.
But that's the first step in a process that eventually leads to everybody losing faith in the currency and just bailing, which is good for gold bugs and a catastrophe for the people who trust the currency.
So that's really the big question.
Which group do you want to be in going forward?
Do you want to be somebody who trusts the government, holds on to their currency and the bonds that are based on that currency?
Or do you want to kind of get out of the game for now and see how it plays out?
And, you know, the sound money community in general and gold bugs in particular have kind of opted to get out.
And so that's a big part of the money that's flowing into precious metals is people who have made that decision.
Well, it seems to me, just adding on to what you just said, which I think is right on, if only we had an index of relative stupidity about which fiat currency is less stupid than the others, that's the one we could go into.
But if they're all printing the same, it all looks normal, right?
But it seems there are multiple factors here that consumers must be digesting to try to decide what to buy and why prices keep going up.
I mean, number one, we have all this money flooding into the system, which is an inflationary effect on consumer goods.
Secondly, though, we have scarcity of consumer goods.
That is an actual reduction in the supply of food and firearms and ammunition and consumer goods as well, imports from China and so on.
And then thirdly, we now have...
Quite a lot of rising in the fear of a second wave with increased deaths reported in Texas and Arizona and other places.
Seems like there's the beginning of what some have called panic buying.
I don't like the term.
I don't think it's panic buying.
I think it's rational buying to stock up on things.
I mean, trade money that's going to become worthless in the future for real goods today that you're going to consume anyway, that seems rational to me.
But those three factors are leading to huge increases in prices out there on the goods that people want.
What are your thoughts on that?
Well, I think things are really complicated right now because you've got all these cross currents, which you laid out, where we've got a trade war going on.
We've got scarcity of some things.
We've got an oversupply of other things.
So it kind of muddies the water as far as, you know, giving us a clear picture of what's happening with the values of our currencies.
But if you just graph the major currencies versus gold, you see that since 1971, they've been in an almost unbroken downtrend.
You know, they're getting less and less valuable relative to gold.
So the process is ongoing.
But yeah, some things...
See, part of the real problem with our current monetary and fiscal policy is that it's as if it's designed to enrich the already rich by making the price of things they own, like stocks and bonds and trophy real estate, go up in value.
And impoverish everybody else by making the price of things that we have to buy to get by, like college tuition and healthcare and some kinds of food and housing, go up.
So, you know, in the case of most people, Your wages don't go up, but your costs do go up.
But for rich people, their incomes go up and their capital gains go up.
So it's a system that's unsustainable, both economically and politically.
So the question is, what happens to resolve this?
What kind of a crisis do we have?
Is it a political crisis where the peasants grab their pitchforks and head to the castle and try to make it right that way?
Or is it a financial crisis where the monetary system just breaks down, doesn't work anymore, and then we have to do something else because the thing we're doing doesn't work?
You know, it's nothing...
Focus is your mind like failure.
When what you've been doing doesn't work anymore, all of a sudden you have no choice but to try to replace it with something else.
And that's out there in our future.
And it's possibly going to be a very messy prospect.
But that's one thing where I'm willing to talk about what should happen, what we should be doing.
And we should be going back to some kind of a monetary system.
In which governments don't have a printing press.
You know, we need to take away the power to create money from politicians because, like any other human beings, they're going to be corrupted by that power.
And they have been, and, you know, you get what we have now.
I think you've really hit on something that's key to everything we're observing in society today.
The money printing by the Fed, this power to create money and bail out the rich, which is a lot of what's happening in Wall Street.
That's who gets the money first.
This must be feeding into, and look, I may take some heat for even saying this, but there is an element of the left-wing protests that is actually rooted in truth and the fact that the monetary policy of money creation is a grave economic injustice for all people in America.
And as you said, that system is unsustainable.
And I can't help but think a lot of the reason many people are rioting is because they are living under the poverty of being looted by the Federal Reserve constantly.
If they could run a local small business and keep most of their earnings and have their savings not disappear over time, I would imagine more people would be running small shops instead of rioting in the streets.
Do you think there's any truth to that?
I mean, you don't have to get into the politics of the riots, but is there any truth to that idea that the Fed, their policies are leading to this injustice across society that leads people to be frustrated and angry?
You hit on one of the crucial points about today's society, which is that everybody, other than the 1%, is being basically harvested by the aristocracy right now.
And we all experience that somewhat differently.
We're through different lenses.
But it's a basic truth for everybody.
And I think the thing that terrifies people The current aristocracy, more than anything else, is that the peasants will figure out that while they're fighting each other, they're distracted from what is the real enemy right now, which is a system that's been designed to funnel money out of the pockets of pretty much everybody and into the bank accounts of the tiny elite right now.
So when Antifa and Black Lives Matter and the Tea Party are in the street fighting each other, They're being distracted from what they should be doing, which is to try to make the system more fair and to try to address the inequality in wealth and income that's out there and that's growing.
And you're right.
Seeing this way, everybody on every side of the political spectrum right now has an element of truth to their beliefs.
They're seeing the world through a different lens.
But at the core of what they want is usually a list of pretty good things.
As we become more and more tribal, in other words, as it becomes easier and easier to dehumanize the people we disagree with, that's getting lost.
You wouldn't see anybody in Antifa talking about Trump supporters as human beings just like us and vice versa.
We're at the point now where it's so easy to dehumanize people who disagree with us that the idea of a civil war is not that far-fetched.
And that's terrifying, you know, because that's brother versus brother and families versus family, and it's just a horrifying prospect.
You're absolutely right.
And yet, my question to you on that is, is there any hope that this situation is healed before it ends up in a Civil War scenario?
Because, you know, the money printing continues.
The income inequality is only exacerbated over time.
The bailouts are still going to the bankers.
And no one's been prosecuted for the subprime mortgage fiascos of 2008.
No one's gone to jail!
I mean, the criminals are running free, and not in the streets of Seattle, but in the halls of Washington, D.C., and the Treasury Department.
You know what I mean?
Yeah, there's a speech that will live in infamy by Eric Holder back when he was President Obama's...
Yeah, the AG. Okay.
Attorney General.
And he said, well, you know, we can't arrest bankers for crimes because that would destabilize the financial system.
So we'll find the banks, you know.
And that was just a, you know, a free pass, a get out of jail free card for bankers to manipulate markets.
Not that they already didn't have one, but he just made it explicit.
And the idea that big, powerful financial interests are above the law It's really kind of the capstone to this whole thing.
You know, they get richer year after year.
And not only do they make money in the quote-unquote legal part of the system, they game the system too.
You know, they commit financial crimes by manipulating markets and can't be touched because it would destabilize the financial system.
And that, you know, ever since, that's how the system has worked.
You know, and it really hasn't changed much.
You know, Trump came in promising to...
To drain the swamp.
And he hired a bunch of Wall Streeters.
So the system continues as it has.
And even in this crisis, which is, you know, it's a nasty recession, which could easily be seen as a depression in retrospect, which is normally when the people who own all the financial assets lose their shirts.
You know, back in the Great Depression, one of the The visually most interesting parts of it were all the stockbrokers falling out of windows or jumping out of windows.
And now there's nothing like that.
The guys who would normally, in a big financial crisis, lose a lot of money are actually making more money.
You know, Jeff Bezos, I forget what the stat is, but it's something like he made $40 billion more Um, since the pandemic started some crazy number like that and it's true for pretty much everybody in charge of any major company right now they're making money and That's not right.
You know, that isn't the way it should be.
And it just adds to the sense of frustration on the part of everybody who's not part of that club.
So, yeah, you know, it could easily turn into...
Well, okay, we can go one of two ways.
A civil war is possible if people don't figure out that they're fighting the wrong enemy.
Or a French Revolution kind of scenario is possible, where, you know, hopefully it's not a physical...
French Revolution, but a financial one where the richest people get hit with some kind of redistribution.
As a libertarian-ish person, I hate the prospect of that because that really interferes with the workings of markets, which are the only way to create wealth to support this many people.
but markets have already been crippled by what's going on.
So I'm not sure that some kind of a, for instance, a 20% wealth tax or, you know, direct confiscation of assets or something like that would make things any worse than they are.
And in any event, something like that is probably coming.
You know, Bernie Sanders came very close to getting the nomination in the last two Democrat primaries.
And next time around, you know, he's proved there's a market for socialism.
So the next time around, some younger, very articulate, very, you know, unthreatening socialist is going to come along and very possibly win and, And then we'll get this stuff, you know, which is in the long run a disaster, but kind of poetic justice for the people who get hurt immediately by it.
Well, what you're saying is setting off all kinds of alarm bells in my mind right now as you're laying out these scenarios.
Number one, I tend to think that a Bernie Sanders type of solution would end up, they would say, well, you're rich if you make $100,000 or more, but the really rich pay nothing because they pay nothing now.
So, you know, you look at the Googles and the Amazons and the, you know, the big wealthy corporations out there.
What are they paying?
Three or four percent income tax, you know, while the small businesses are paying 21 percent or more.
It seems like there's always an untouchable class of wealthy and that a socialist type of new taxation policy would really only hurt the middle class or the upper middle class, not the ultra wealthy who seem to have immunity from all this.
Do you think there would ever be a real financial revolution where the wealthy are no longer untouchable?
I mean, is that what you're describing that might happen?
Well, you know, that describes it probably more cleanly than I would describe what might come, you know, because revolutions are chaotic.
And you don't know how they're going to go.
You just know that people who are incredibly frustrated and maybe don't even understand why they're so frustrated, but they're just out there and they're taking over, and all of a sudden they get power.
So you really never know how something like that would go if it came to be.
And you're right that, well, two things.
One is that socialist revolutions always end very badly because the philosophy of collectivism is contrary to human nature.
It just doesn't work to try to level everybody and take all their assets and put them in one common kitty that the government doles out.
You know, it just doesn't work.
Well, Chavez thought it worked great in Venezuela before he died.
And, you know, North Korea leader thinks it works great.
Well, yeah.
I mean, see, it seems like it's going to work in theory because your enemy is so clearly evil.
So if you do something different from them...
And in the course of trying to right their wrongs, it must be a good thing, but it doesn't work in the case of socialist revolutions.
And you usually end up with some kind of a dictator at the end of it.
And we're not immune to that.
I mean, the US could have something like that happen because we're screwing up on such a scale That orderly transition is probably the least likely way out of this, just because we're broke.
As a society, we are functionally bankrupt now.
The only way we can continue to function is by counterfeiting immense amounts of new money and spending that, but that only works as long as the money holds its value.
So yeah, we've got this kind of brick wall out there that we will run into at some point.
And then all bets are off politically because there's no way to know who ends up taking over after something like that.
And Donald Trump is another example of this process at work because he basically hijacked the Republican Party because they were completely out of ideas.
So he came in with a populist set of policies.
That might have actually done some good if he'd gotten to implement any of them, but he didn't get to, which is not that big of a surprise because he was up against a lot of entrenched power.
Sure, and the Republican Party still has no ideas.
By the way, they have no clue what to do except they hate Trump, and that's their whole platform at this point.
Yeah.
Well, the Republicans are a party without a single idea, actually.
You know, back in the days of Ronald Reagan, they had a very clear set of premises and ideas, which made them interesting.
But they've since lost all that.
So now they're just another big government party.
I mean, they define big government somewhat differently.
You know, they're more military-centric than social program-centric, but they still want a gigantic government.
The last guy that had ideas for the GOP was Newt Gingrich.
You know, the contract with America in 1994.
And he laid it out very clearly.
Ten things, including, by the way, term limits, which if we had had back then, our country might have been saved.
But, of course, term limits would never pass if the people affected by them have to vote on them.
So...
So that never happened.
But yeah, I mean, there's no leadership.
The only people I see in the streets, for the most part, are more left-wing people who seem to be dominating the narratives and having all the ideas and really demanding change.
There was also another AOC-style candidate that just won a primary, I think, in New York, upsetting a more traditional Democrat in that race.
So we're going to get...
A male version of AOC now in Congress, it looks like, after this coming election.
That should be very entertaining.
So we're going to have a lot of socialist ideas.
Well, that's to be expected.
When you screw up your finances, you screw up your politics.
And when people come to the conclusion that the mainstream ideas that the system is now operating with don't work anymore, they look to the fringes for new ideas.
So, you know, Trump came in with right-wing populism.
And he proved that there's a market for that.
So next time around, you know, next time there's a presidential election where the Republicans have a primary, you're going to see a lot of kinder, gentler Trumps, guys who are running on the policy, but with fewer rough edges.
On the Democrat side, AOC and Bernie Sanders proved that there's a market for full-on socialism within the Democrat Party that you can get elected running on that.
You know, it used to be they weren't allowed to say the S word.
That was the way they put it.
Don't say the S word, even though you kind of believe it.
Now, you know, you can say, I am a socialist, and you get an automatic 30 or 40 percent of the vote.
You just have to get up to 51 percent from there.
So...
That's another kind of marker in our descent into tribalism.
Because when you have just socialists at one end of the spectrum and right-wing populists at the other end of the spectrum, there's no room for compromise in which something actually gets done.
In order to enact your policy, you have to...
Totally defeat the other side in a situation like that.
And they feel robbed, and they take to the streets, and you get what you have now, but it could easily be from the right next time around.
And that's what's so scary about today, because we're...
Not in any sense normal right now, but this might seem like the good old days compared to what comes over the next year or two if we head in the direction that we're heading very much further.
So it's a very scary time.
Well, speaking of the good old days, I think a year ago, no one could have imagined where we are right now.
And I was even shocked by the fact that just one month into the lockdowns, which began, I guess, about mid-March, one month into it, everybody was starting to go bankrupt and not be able to pay rent and so on.
I was stunned.
But I've since learned, even people that I know Friends of the family and so on.
They are broke.
They are so broke.
They don't have $5,000 to their name in an emergency.
And they're living on debt.
I mean, they have literally no assets in a home, no ownership of a car.
Everything's debt, debt, debt.
And this apparently is so common.
You mentioned this to me before the show that, what, 28 million Americans are now expected to not be able to pay rent or not be able to pay mortgages or at least at high risk of not being able to do so.
We are a country that was on the edge, and now the edge of the cliff has been undercut.
Tens of millions are going to fall into, what, homelessness next?
Is that where this goes?
Yeah.
Or, you know, multi-stage families living in one house.
The way it works in depressions is everybody moves back in with grandpa and grandma.
And so that could be what we're heading for.
Yeah.
You know, you're right.
We were heading that way anyhow.
Savings was minuscule.
The stats on how many baby boomers have enough money to retire were terrifying, as were the stats on how many people have no money.
And that was 10 years into an expansion.
Remember, we had a decade of economic growth.
These are the easy money years.
Yes.
That's when you should be building up massive bank accounts and the government should be running surpluses.
But instead, we were running trillion-dollar surpluses.
People were using credit cards to pay their student loans.
And it was just getting worse and worse for, say, the bottom 50% of the economy.
You know, they did not experience a recovery.
Even if they maybe got a new and better job, they still didn't manage to save much money based on the statistics of the time.
So now most of those people have either lost their jobs or they've seen their expenses spike for some other reason.
You know, if you...
If you have to get a coronavirus test, in some cases it's several thousand dollars.
And if you didn't even have enough money to fix your car before that, well, that's just one more thing.
But see, that was always coming.
You know, we were heading in that direction and we were going to have something pop this bubble.
So it turned out to be the coronavirus, but it could have easily been a bunch of other things.
It could have been a war in the Middle East or some big bank blowing up.
Anything like that could have happened, and one of them would have happened.
But we got this fairly low probability event here.
And, you know, it's going to push us over some kind of a financial edge here.
Either it forces the government to go to a UBI kind of regime where they are just paying us money every month, or a lot of people are going to be pushed down into poverty.
And, you know, neither one of those is an appealing idea.
But it's not clear that we've got a middle way where we kind of muddle through and get out of this in a painless way.
It doesn't look like that's possible based on the numbers.
We have just borrowed too much money.
So we're not flexible and we're not resilient anymore.
So it comes down to...
I'm sorry.
Okay, well it comes down to an individual choice then, because we can't fix this.
There's nothing you and I can do through our votes or anything like that to fix the situation.
So we've got to figure out how to protect our families.
And so that is mostly common sense, what you need to do, but it's stuff that we didn't do because we thought the big systems were going to take care of us.
So that's why, for instance, farmland is just flying off the shelves now.
You know, everybody's trying to buy a homestead and get out of the big city because they're terrified of what would happen if there's another pandemic and or more civil unrest while they're stuck in a, you know, a third floor walk up In Manhattan, you know, what do you do then?
Yeah, especially when they've cut the budget of the police and their rioters in the streets.
California, the governor of California announced they have a $54 billion shortfall for the current fiscal year.
Their annual budget is only $208 billion, I say only, but I mean, relative to their shortfall, you know, they're already missing 25% of the money they need, and the state of California can't print money like the Fed.
And I think there's even a constitutional amendment in their state constitution.
They have to balance their budget.
Looks like their shortfall is going to be about $100 billion by the end of the year.
And guess what they're going to have to cut?
Oh, pensions, welfare, health care, and education.
So all these people that are collecting, I've heard some people collecting $180,000 a year pension from California after hitting age 55.
There's a lot of people like that.
There are probably millions of people collecting pensions in California.
That's going to get cut by 50% by necessity, it seems, one way or another.
California's going to have to cut its budget.
Isn't there a big shock coming?
What the states and cities that have been really badly run all these years are hoping for is that this crisis allows them to demand a bailout.
from the federal government.
And I think that's at least as likely that the government, you know, Washington just writes them a check and covers their pension obligations and keeps all the police on their beats and keeps the schools open, et cetera, et cetera, et cetera.
Because, well, we're heading into a presidential election year, you know, and do you want to be blamed for that if you're the And the answer is, no, but maybe you can spin it.
You know, if it's Democrat states going bankrupt, and big cities run by Democrat mayors, then maybe a Republican president can spin that to his advantage.
And maybe they don't bail them out.
And in that case, yeah, you're right.
Something has to happen at the state and local level.
And you'll see cities go bankrupt.
You know, Chicago should have been bankrupt a long time ago.
But they managed to muddle along by borrowing money.
Illinois is functionally bankrupt.
Yeah, you're right, but I'm sorry to interject, but wouldn't it be infuriating to Trump's base across middle America, states that have sensible budgets, for taxpayers who voted for Trump to see Trump take essentially their money and bail out poorly run Democrat states like California that are blowing through that money?
I mean, why should a taxpayer in Oklahoma Have to pay for the horrific financial decisions of San Francisco, for example, right?
I mean, I think that would be a hard sell.
Oh, yeah.
I mean, people who are in well-run states should not have to bail out people in badly run states.
But if a bailout happens, it'll be because the administration...
And Congress sees it as the least scary alternative.
In other words, bailing them out would be, it would have a lot of political repercussions.
It would be a really stupid thing to do financially.
But California, Illinois, New York, and three or four other states going bankrupt all at the same time right before you're trying to get reelected, they might see that as worse.
Yeah.
Which is kind of emblematic of where we are as a society right now.
There's no good choices left.
It's all really bad, really scary choices.
And we don't have the option of not choosing, because not choosing is still a choice.
Continuing with current policy is an active choice.
So nothing is easy going forward.
And this is killing today's politicians, because a whole generation of politicians never had to say no to constituents.
They could always find the money because the federal government was always creating new money and giving it to states and localities and to Congress and to the military.
Right down the line, everybody got most of what they wanted.
So politicians don't have the experience saying no to major constituencies.
I mean, normally, politics is the art of saying no to enough people to get something done, right?
And now it's saying yes to everybody, which is way easier and way more pleasant, but it doesn't prepare you for hard times.
And that's another reason why even harder times are coming, because these guys are completely unequipped.
For what they're going to have to do going forward.
Can you imagine being the mayor of Chicago and saying, okay, we've got to cut teacher salaries by 20% and we've got to cut police pensions by 30%?
There would be an insurrection.
You know, you would literally be in danger for your life.
But those days are coming.
I mean, they're either going to have to make those choices, right?
Or at the end, the mayor grabs her gold bars and escapes town and says, it's collapsing, bye!
You know, that's pretty much what a lot of these wealthy, connected people are doing.
But, you know...
I'm sorry, go ahead.
Okay, well, that's what today's political class has been doing, and yesterday's.
They've been assuming they could keep kicking the can down the road long enough for they themselves to retire.
And they amble off into the sunset as a successful leader.
And what they've really done is just let unfunded liabilities of their pension plan explode, but nobody was paying attention to that.
And so these guys are expecting and hoping to retire and not have to deal with the consequences of their horrendous mismanagement.
And you knew that eventually there would be a generation of politicians who are, you know, They're when the music stops, and they're the ones who are caught holding the bag, and it might be this generation of politicians, where they aren't going to get to amble off into the sunset with their gold bars and their giant pension or anything, but they're actually going to be there and get blamed for this stuff.
So, you know, it's poetic justice, but it leaves out of the justice part of this all the people who made the mistakes in the past and got away with it.
Yeah.
Yeah.
Yeah, I mean, it seems to me that with the narrative control out there, the people responsible for this will never get blamed.
And they're aided by the fact that most of the population can't calculate compounding interest on debt, by the way.
So, you know, people, they don't see where the pension obligations are going.
But getting to the theme of your website, dollarcollapse.com, I encourage our viewers to go to your website, sign up for your email newsletter, it's a great resource.
What does a dollar collapse actually look like?
Is this a sudden overnight event or is it 10 years of stagflation misery?
You know, what does it shape up to be in your view?
Well, it could go either way.
You know, that's the tricky thing with all this because, you know, if we could understand the timing.
And we had a date when everything hits the fan, then we could adjust our lives accordingly.
But you really don't know whether this is...
Because we're already in the middle of a long drift towards oblivion for the big fiat currencies.
But we don't know when the drift turns into a drop off the table.
And a lot of that is based on things that haven't happened yet.
We don't know what the next crisis will be.
We don't know how governments will respond exactly.
And we don't know the point at which a critical mass of people figure out all of this stuff and just start piling into real assets.
So I wish I could be more certain and give your listeners some investment advice that they can act on This week and know that it's going to work out this year.
You know, there's really nothing like that.
There's only general trends.
And, you know, the old saying from Ernest Hemingway about a friend of his who went bankrupt and the guy says, well, I went bankrupt slowly at first and then all at once, you know, so that's what's coming.
But the all at once part has an indeterminate date.
Yeah.
And so we can't know.
But, you know, the shape of it will be very chaotic when it comes.
You know, when you screw up your money, you screw up everything, because that affects everyone in the society very deeply.
And you do get chaos of one kind or another.
You know, if you look at Weimar Germany, where there are all these really vivid pictures of people taking wheel barrels full of cash to the grocery store or tossing it into a furnace to heat the house.
And that ruined an entire generation by wiping out everybody's savings and making them bitter and willing to listen to extreme ideas.
And then they got Hitler.
The really scary part of this is that it changes people's perception.
Of the society in which they live.
From, you know, valid, it's a valid society, we're supporting, to something that's not even worth the trouble anymore.
So let's just tear it all down and rebuild something else.
And that kind of attitude spins out of control very easily.
So the...
I think we covered this last time we spoke, but the only relatively pain-free way of doing this is a monetary reset, where we just go back to the gold standard on some Sunday night and just...
Have a sustainable monetary system from there at the cost of impoverishing everybody who held onto those dollars and trusted the government.
But that's the only way to do it in a way where the resulting civil unrest might be manageable.
Otherwise, it just gets too crazy.
All the possibilities just kind of spin out of control.
I want to ask you about that, about a transition to a gold-backed currency of some kind.
But I want to recognize something you said there was just brilliant.
I'm going to ask my producer to make that the title of this interview.
Maybe it should be a book that you write, The Long Drift Towards Oblivion.
I thought that was genius.
That's exactly where we are headed here.
But as far as a currency goes, you know, To throw a wild card into this, what if China announced a gold-backed cryptocurrency?
For example, a hybrid system, but backed by actual gold.
I mean, they've been gathering gold, thousands of tons of gold for many years.
We don't know exactly how much, but it's clearly a lot.
I mean, somebody on the planet could throw the dollar into the abyss with some other announcement, especially if the faith in the dollar is already mostly gone.
Couldn't that happen?
Oh, yeah, in some form it could, because, you know, a lot of other countries are really frustrated with us, because we have the ability to just create money out of thin air, and we use that wealth to bully them.
And, you know, we pick on China.
Well...
We oppose China in a lot of ways that China can't counter right now.
Same thing with Russia.
And the other, you know, the rising powers in the world who believe they should have more say in their own situation, but that they don't have the say that they want because the U.S. is just, you know, standing above them with this unbeatable military because they could pay for it with newly created currency.
You know, other countries would like to do something about that.
And one thing they can do is to opt out of the dollar-based global financial system.
And you see China and Russia accumulating a lot of gold.
Which raises the question, like you said, why do they want all that gold?
Is it just a good investment?
You know, something that's going to get more valuable later on, which would be a smart thing to do if that's all the reason that they had for it.
But they could also use it to back their currencies, and they could do it together.
You know, there could be some kind of combined ruble-yuan monetary system that is backed by gold, and that would be a real challenge to the big Western currencies.
So that's conceivable.
Maybe they don't actually plan to do it in the near term, but they're giving themselves the option down the road by accumulating all this gold.
So yes, that's a total possibility because we have abused our privilege.
Having a reserve currency is one of those with great power comes great responsibility things, and we've abused that power so badly.
You know, if you make us mad, if you make the U.S. mad, they threaten to kick you out of the SWIFT system, which is the international clearing system for banks.
And that would shut your banks out of international finance.
So you kind of have to do what we say, because that is, you know, that's a mortal threat to your financial system.
And we do stuff like that.
We do it at the drop of a hat.
You know, it isn't even something where we're trying to avert a war, you know, and And doing a noble thing.
We just do it because we're, you know, drunk on power.
And the rest of the world knows that.
Tech giants de-platform people because they don't like their voices.
The Western banking system de-platforms entire nations because they don't like the way that they're spending money, such as Iran, for example, or Venezuela.
But yeah, it seems like China has every incentive to change the whole system.
Because think about it, China is producing goods and selling us goods in exchange for essentially Federal Reserve IOU notes that we print from nothing.
So America is getting all the goods And it's not costing us anything, except fake money printing that China's holding onto, which will eventually become worthless as the dollar collapses.
So China's getting a very bad deal in this.
Yeah, and they recognize that.
They understand that we're putting our currency at risk, which puts their foreign exchange reserves at risk, because they've saved a ton of dollars.
You know, they've saved trillions of dollars between China.
Well, I think Russia's mostly out of dollars now.
China still has a lot, and they know they're at risk.
Which that kind of moderates their behavior a little bit because they don't want to pull the trigger on anything serious as far as leaving the dollar system while they own all these dollars because that would cost them a ton of money.
So there will come a time when the price is worth paying, but I suspect that that's not yet.
But yeah, you could go even further than what you said about us giving these guys worthless currency.
In return for real stuff, you could say that we're borrowing our military budget from China.
That's right.
Because our trade deficit with them is comparable to our military budget.
And how crazy is that?
If they're our geopolitical frenemy, or even enemy, and they're lending us the money to maintain a trillion-dollar-a-year military empire, that makes no sense.
So that's not the kind of thing that will be sustainable going forward, because it Makes sense for us, but not for them.
So that's...
Well, it seems like...
Well, okay, sorry, but that reminded me of another issue, which is that the money printing that's happening in the United States has no discipline behind it.
And this was really demonstrated recently by just a shocking story I saw yesterday, where a man who runs a barbecue shop was able to claim that he has, I think, 50-something employees, each making $90,000 a year, and he was able to get a PPP loan for almost a million dollars.
The loan was approved, even though it was all fiction.
He made it all up.
He took the money and bought Bitcoin with it, I think, which just shows you his mindset.
He's just running to the casino as quickly as possible with his free money.
But how could that even happen if there's any level of discipline or due process, fact-checking?
I mean, it smacks of the subprime mortgage crisis where everybody was being approved.
No income, what are they called?
Ninja loans?
No income, no job, no problem, right?
And that's how the bailouts are happening now.
It seems incredibly reckless.
Well, in the subprime mortgage bubble, that was greed that was leading banks to hand out all that money.
In this crisis, it's panic.
The federal government just does not want to see us drop into another Great Depression.
So they're handing out money without the staff to really oversee it.
And the way it works is a bank works with you as a small business owner to fill out the forms and everything.
Then they submit those forms to the Small Business Administration who okays it.
And then the bank hands out the money to you and collects the fees.
So the bank makes money.
And it's not in their interest to turn you away because it's a government guaranteed loan.
So it's zero risk to them.
And all they have to do is fill out the forms.
So it's not in their interest to really check into your situation at all.
And the government is so panicked that they're not checking into anything either.
They're just handing this money out to avoid a depression.
Which is, you know, it's how you operate when you're terrified, right?
You don't really worry about the implications of something further down the road because you need to get through this moment.
And that's where we are now.
So expect even bigger scandals when all of this stuff comes out because there are some people who got these loans who are just going to be like front page news when we find out we lent money to those guys.
Yeah, well some of that's coming out already, but it seems like one of the main things that leads to revolutions throughout history is really a sense of profound unfairness in the minds of the population.
As long as people have a fair shake You know, where the justice system is basically fair, where the monetary system is basically fair, and so on.
I think people can live with a lot of hard times as long as, you know, if I work and can keep the money, then I can kind of determine my own fate.
But when they're working in a system that is so rigged and so outrageously tilted toward the politically connected, it seems like this really is what spurs revolutions, because at some point, what have you got left to lose?
You can't trust the system anyway, right?
Yeah, and really that's the crucial concept in a successful economy.
Basically, you need upward mobility.
You need to look at the next rung on the ladder and know if you play by the rules and work hard, you can get there.
You can take your family up that next rung.
And that gives you three or four years of focus without being frustrated because you know if you do the right thing, you can progress.
And what we've done is taken that away from people.
So over the past 10 years or so, upward mobility has been this myth where more than likely they were going to move your factory job to China and you were going to be an Uber driver or something.
And that is not upward mobility.
And that's become the common story in the U.S. So, yeah, fundamental unfairness is what we've built into the system.
And until that's addressed, which is why Trump got elected, you know, he addressed that stuff.
Head on.
He said, you know what, we'll go to China and we'll bring your jobs back and we'll close the border and we'll limit competition from people who come here illegally.
And to, you know, an awful lot of people, that sounded like exactly the right prescription because they were frustrated by the unfairness of the system and, you know, and felt like they weren't being heard.
So somebody heard them and they made him president.
Which means that, you know, there's a market for those ideas.
So it's possible that, not this election, but, you know, in the election that comes next, somebody might come along who actually tries in a coherent way to redress the unfairness of the system.
But I'm afraid what we get this time is either more of the same in which the Democrats...
Basically hamstring a second Trump administration or Joe Biden, who is just, you know, I got to just say it, the guy seems senile to me.
It doesn't seem like he's really up to the job.
And in any event, he was part of the corporate wing of the Democrat Party.
They weren't going to fix this stuff anyhow.
You know, they liked it the way it was.
But if I could offer this as a suggested point, I think this has happened this year, I think we've moved beyond most of the American people saying, I want a job.
Now, it's just, I want a bailout.
I don't want to have to work.
I just want free money.
Like, that's the mentality.
And by the way, I got news for all the Trump supporters who think that you could bring the jobs back from China, even if you did control the border and have the factories relocate to America.
I got news for you.
Young Americans don't want to work.
They will not work in those factories.
They think that they shouldn't have to.
It's a mentality.
It's now an entitlement mentality.
Pay me so that I can Vote for you.
I mean, that's it.
It's just free money for everybody.
The UBI that you mentioned, the universal basic income, I think that's inevitable because that's the only thing that the voting population will now support.
They don't want jobs.
They want free shit.
Pardon my language.
That's it.
That's their whole mentality now.
Well, there's that really famous saying to the effect that democracies only last until people figure out they can vote themselves free stuff.
And then it ends.
Then you head into dictatorship.
And yeah, you make the case that we're at that stage.
And part of that comes from...
Well, there just haven't been those good jobs that, yeah, maybe it's blue-collar-ish, but it gives you a middle-class life.
Those jobs have disappeared completely.
So that group of people who would have taken a factory job, would have been an assembly line worker for GM or somebody, they have nothing now.
And at the same time, we've been encouraging people to go to college and to borrow huge amounts of money to go to college without really policing the degrees that they were going for.
And so you've got this huge mismatch between 20-somethings and their degrees and the jobs that would be available even if we address the whole China trade deficit thing.
And yeah, they have a sense of, you could call it entitlement.
They believe they deserve really good white collar or academic jobs.
And those things don't really exist on the scale that they need to exist to put all these guys to work.
So now they're baristas or Uber drivers or something like that, and they're deeply frustrated too.
And so you have these different groups of people who are deeply frustrated, but mostly from the same root cause, although they may not see it that way, and that is that we've encouraged people to take on huge amounts of debt on the one hand, while we haven't made it a point to make sure there were lots of good jobs here.
And, you know, trade policy is one way you do that, tax policy is another.
But that just wasn't an issue.
People paid lip service to it, but they didn't do the concrete things that needed to be done to have a society where there's a whole range of pretty good jobs so that there's something for everybody.
And, you know, so much of this stuff is kind of damage already done.
And there's really no way, you know, you could enact the best possible trade policy right now and the best immigration policy and maybe even an industrial policy here.
And it would all fail because we're so deeply embedded.
You know, we are just leverage to the hilt.
And once you've borrowed money beyond a certain point, Your life is unmanageable, whether you're an individual or a family or a country.
And we are there, really, at every level.
Individuals, families, and the country are at that stage.
Isn't there also, I forgot the name of this, but isn't there also an economic phenomenon where once your debt-to-GDP ratio crosses a certain threshold, then economic stimulus no longer has the same efficiency of results?
You lose the, you know, you're trying to pump money into the marketplace, but it's not having the effect that it used to, because your debt to GDP is so high now.
Is there a name for that?
Oh, well, there's something called the marginal utility of debt.
which is the bang for each borrowed buck.
It used to be that if we borrowed a dollar, let's say in the 1970s, and invested it, we got about another dollar of GDP growth out of it.
And that number has been going down as we've been borrowing more money.
And now we're at like six or something like that.
You've got to borrow six bucks to get another dollar's worth of growth.
But that dollar's worth of growth doesn't pay the interest and the principal back on that debt you took on.
So we're in a kind of a death spiral from that point of view.
And once you hit zero, that's the scary thing.
When marginal utility of debt hits zero, which is to say you can borrow infinity and not get any more GDP growth out of it, then it's over.
Usually you would think you would hit that wall or you would collapse financially before you got to zero, but that zero number is out there because the line is trending downward now.
Well, also, normalcy bias means people are going to hold on to this system even as they know it's dying.
I mean, even beyond a point where you can no longer deny the system's done for, people are going to cling to it, because that's all they know.
Yeah.
You know, it's hard to change your mind.
Once you've come to a conclusion, then you can relax and not have to think about new information that's coming in or anything.
And we're all like that.
You know, that's why stock market bubbles do what they do.
You know, once people get it into their head that the market is going to go in a certain direction, it takes a lot of contrary information to convince them otherwise.
So things go on longer than they should.
And, you know, that's how everything works in life.
It takes a long time for us to come to a conclusion and then a really long time for us to change our mind.
You and I are pointing things out that for most people it hasn't been in their interest to bother to consider because they were assuming everything was basically okay and it would go on as it has gone along.
That's sort of what happens when you have relatively good times for a long time.
You get fat and lazy.
That's why the same football team doesn't win the Super Bowl year after year because success breeds complacency.
Yeah, yeah.
And easy money breeds complacency, too.
Yeah.
I mean, that's a form of success.
When everybody wants to lend you money because you're creditworthy, or they're telling you you're creditworthy, you feel like you're a successful person, right?
And so you borrow that money and you buy a nice vacation and a big house and a couple of SUVs for the driveway and a big screen TV, you know, and everybody thinks you're rich.
And all along, you feel great because the bankers, who should know, believe you can pay off the loans that they're giving you.
But of course, you've taken yourself to a place where the repo man is driving down the street to take away all your stuff because you do not have the money.
Then you're not complacent anymore.
By then, it's too late for you to behave differently.
So you learn that lesson after the Depression, for instance, in the 1930s.
We had a whole generation of people who didn't put their money in banks, who saved aggressively and only borrowed money when it was incredibly important because they'd had a traumatic experience with debt and currency and banking.
We're creating that kind of a generation again.
So 20 years from now, you know, when we're looking around, we won't think people are complacent and we won't think they're entitled or anything because they will have been beaten down so badly that they're grateful for anything and they want to hold on to what they've got.
So it's human nature that you have to go through cycles like that.
But man, this is going to be a big one because the numbers are just outrageous.
Well, there you go.
The long drift toward oblivion.
I think you've really nailed it, John.
And your insight is very valuable.
I want to thank you for joining us today.
I hope you'll join us again in the future as things develop here.
Folks, if you want to learn more from John, go to his website, dollarcollapse.com.
Join his email newsletter.
You'll be informed multiple times a week on things that are going down.
And, of course, check out more interviews here on brighteon.com.
John, thank you so much for joining me today.
Thanks, Mike.
Okay.
Well, that's the interview, folks.
Share this where you can, where it's not banned or blacklisted because, oh, we're two rational guys talking about things that make sense.
That's not allowed in the world anymore.
But thank you for watching.
I'm Mike Adams, the founder of Brighteon.com.
Be safe, buy gold, and get ready.
Take care.
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