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Oct. 7, 2022 - Health Ranger - Mike Adams
56:12
Tom Luongo interviewed by Mike Adams: Currency wars and the Fed's REJECTION of Davos globalism
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All right, folks, we're about to jump into an interview with Tom Luongo.
He's an economist and analyst, and I think he's brilliant, and he's got the best analysis of what's actually happening in Europe and the Federal Reserve at war with European banks.
In essence, American dollar hegemony at war with the euro itself, the very viability of the euro and the EU itself.
We're talking about currency wars on a global scale.
We're going to bring in Tom Luongo here shortly.
And it should be one of the more fascinating interviews that we've had in a while.
Although, I've got to say, we have awesome interviews every day.
Have you noticed that?
It's like every day is something just mind-blowing.
It's even blowing my mind.
I'm so glad I'm inviting all these people for interviews because I learn something every day.
And today's podcast, before we get to that, is sponsored by the Satellite Phone Store.
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Now with that said, let's jump into this interview with Tom Luongo and see what intel he's got to share with us about what's going on with Global Currency Wars.
All right.
Welcome, folks.
Mike Adams here, the founder of Brighteon.com, and we are joined today by a very special guest, someone I'm so impressed with.
I'm so glad he's able to join us.
This is the first time I've been honored to interview him.
His name is Tom Luongo.
His website is TomLuongo.me.
He's the author of Gold Goats and Guns, and he has got a whirlwind of knowledge to share with us about finance and currency and so much more.
Mr.
Luongo, it's an honor to have you on.
Thank you for joining me.
Thank you, Mike.
The pleasure is all mine.
Well, I got to say, I'm so glad I heard your interview recently with Sean over at SGT Report.
I was blown away by what you had to say.
And I want to start with, in fact, one of the key points of that interview, which was, I believe, you can correct me if I'm saying this incorrectly, but I believe you were talking about how the U.S. Federal Reserve appears to be at war with the euro currency and the ECB itself.
Can we start there and give us your thoughts on that?
Sure.
Sure.
That's the big one, right?
That's the one that's got everybody kind of scratching their heads or yelling at me or just dismissing me outright as some kind of like, you know, former libertarian, now fed chill or something, however you want to put it.
What started for me is I started mapping the incentives of the people involved in all of this.
So if we look at the World Economic Forum, that's their real goal.
Their real goal is the end of commercial banks.
Through the advent of a central bank digital currency, which is fully programmable, that will allow them to track us at all of our transactions everywhere we go.
Sure, 100% tax compliance and basically, how I like to put it, minority report with more Germans.
And that's kind of the basic thing.
So when you start thinking about that, you ask yourself, well, who's the most powerful political lobby in the world?
The U.S. banking system.
Who controls the most powerful central bank in the world?
The New York banks, who are the shareholders in the New York Federal Reserve.
And therefore, everything else, right?
And yeah, there's Wells over the San Francisco Fed and blah, blah, blah, blah.
But really, the New York Fed is the most powerful of the 12 regional central banks that make up the Federal Reserve.
And so the shareholders of the Federal Reserve, they're the ones who appoint the Fed chairman.
They're the ones that really, at the end of the day, set policy.
In the same way that California tries to set policy for the rest of the United States, or Germany tries to set policy for the European Union, because they're the most powerful economic actor.
So I just sat back one day, and right after Powell and the Federal Reserve last June, at the June meeting in 2021, They raised a technical little cared for interest rate that they have at their disposal called the reverse repo rate.
And they raised it five basis points above the Fed funds rate, which at the time was Basically, for all intents and purposes.
And they raised it by five basis points.
And I didn't think anything of it.
Zero had to make a big deal out of it.
But I just noticed on the same day that that happened, that over the course of the next 48 hours, the euro bull market that had been teetering collapsed.
And the euro dropped from $1.22 to $1.19 within 48 hours.
Now, currencies don't move 3%.
I like that, unless something big had just happened.
And then all of a sudden, we started getting more headlines about how the reverse repo facility that the Fed has is ballooning in balance, the outstanding balance in the reverse repo facility, which at the time held about $450 billion, and then started ballooning out to $1 trillion.
Within a couple of weeks, it was that $1 trillion.
And then by the time we got to Jackson Hole at the end of August, it was that $1.5 trillion.
And everybody's like, what's going on here?
And from the moment that happened, I just sat back and I said, and all these little things that I had read in different places, like Martin Armstrong mentioned this thing, and this guy mentioned that thing, and that guy mentioned that thing, and I put it all together and I went, wait, is the Fed honestly not down with The big Great Reset thing.
And then I remembered that in the beginning of June, at a major convocation of central bankers over in Europe, Christina Lagarde, the unbelievably obnoxious president of the ECB, He comes out and says, look, we have to, as a group, coordinate global monetary policy in order to fight climate change.
Otherwise, we're all going to die.
And Jerome Powell kind of stood up like the guy in the life of Brian.
Yes, we are all individuals.
I'm not.
And that guy, right?
And it's like, that was Powell.
He just at the meeting, he's like, I'm not doing that.
I'm the head of the Federal Reserve.
I have a dual mandate for, it literally says the stolen guard, I have a dual mandate of stable prices and full employment and I work for the United States.
And she lost her mind.
She got mad at him right in the middle.
She certainly wasn't expecting this.
And that was two weeks before he raised the reverse repo rate and then started draining the world.
Because what he did when he did that is he drained the world in global liquidity terms.
Think of it like base money, right?
When the Fed creates money domestically by lowering interest rates, it incentivizes the banks to go and grab some.
They grab some from the Fed and they lend it out 10 times to us consumers to buy cars.
iPhones and mortgages and all the rest of it.
That's whole fractional reserve banking.
It works domestically, and we understand it, but it also works offshore, as Jeff Snyder has talked about for years in his Eurodollar University segments they used to do.
They still do.
But there's a big split between Jeff and I, because I think that Jeff is wrong about what's happening with the Eurodollar market, and that the Eurodollar market is imploding.
And I honestly believe that the Fed is trying to regain control over monetary policy, over some monetary policy, because the offshore dollar markets, the so-called Eurodollar markets, are vastly bigger than the domestic dollar markets.
And so if...
Okay.
Well, if I could jump in here real quick, just to help clarify this.
So I think what you're describing is that we're looking at, well, all the bankers are gangsters, and there's a gangster turf war happening on a global scale.
And the US Federal Reserve gangster cartel is saying, we're not down with the global cartel.
We want to control banks.
The dollar, not only domestically, but also internationally.
And thus, we're going to wage this turf war.
And they're doing that by raising interest rates, which is punishing the European system.
I mean, punishing to the point where they're begging to stop.
But just to make sure that everybody understands the mechanism...
with this and the incentive structure.
So the important part here is, and you're absolutely right when you say, don't think of them as the good guys or anything.
Just think of them as another group of mafiosi.
And it's the perfectly valid frame with which to look at this.
Now, the Fed could also be looking at this going, this is how we're going to save the United States is the 56th compact as well.
Because it's clear that we're being torn apart politically and culturally from within and without by the Biden hunters.
Which I use the word Biden with air quotes, of course, because, you know, Biden isn't really a real person at this point.
He's just a script puppet that runs when they stick their hand up his backside and tell him to say things.
Obama's running the country.
Don't let anybody kid you.
The policies of the Biden administration, I've called him the first fungal president for two years now because, you know, He's just sporifying in the White House and they feed him Jell-O at 3 o'clock in the afternoon and they give him his ice cream and then he reads all the cue cards and he's done.
He can't even do that well.
So it's clear that the policies of the quote unquote Biden administration are different than the two terms under Obama.
They were fully in line with everything that the World Economic Forum is now unleashed on us during the tail end of the Trump administration.
When they came out and they told us the plan.
They came out and sort of monologuing like this was a James Bond movie or something.
And that's what the whole you will own nothing and like it and all that stuff.
They just literally came out and sort of monologuing.
The only thing...
I was just waiting for Edna Mode to come out from The Incredibles and going, okay.
And then, you know.
But...
Regardless, that's where we are, right?
That's what I think is going on.
But since then, since you did that previous interview about this, we saw in the media that there's a group that's part of the United Nations.
I forgot the name of it, but they came out and they were essentially begging the Fed to stop raising interest rates.
And instead, I believe they were saying you should use price controls to stop inflation, which is the most insane idea I've ever heard.
But what are your thoughts on all that?
Well, no, it's very clear.
And it's the UN Commission on Trade and Development or whatever.
And it's so very European, if you say it that way with the long A. So it's really kind of, you know, just sad.
It's clear that that, to me, was the big tell of all time.
I've been talking about this for over a year.
I watched it because I didn't even believe it when I started saying this.
And I went to some of my patrons who at the time were hedge fund managers and guys who know the people in the know.
So they know Jamie Dimon.
They know these people.
And they're like, oh yeah, that makes perfect sense.
Because Private Equity Powell was obviously hired by them, and they're not going to give up their gig.
And I just put it out to them.
I said, does anybody really believe that Jamie Dimon is going to turn the keys to the candy store of J.P. Morgan over to Klaus von Kami schnitzel?
Like, really?
So what world do you live in?
I don't see that happening.
I don't think Diamond is any kind of savior or anything, but I just don't think he's going to, like I said, he's not going to turn JP Morgan over to a bunch of Euro-trash commies.
He's just not going to have that.
Well, right, right.
They're not suicide mission operators.
Right.
With other rational actors.
Right.
But doesn't this mean, in doing this, in raising the interest rates, they know, whoever is actually making the call on this, they know they're going to significantly harm the U.S. economy to some degree.
I mean, they're going to shrink it.
They're going to implode it.
But is this kind of like global currency chemotherapy where it's like, let's poison everything and then we'll save the patient when the tumor is gone?
That's actually a really good way of putting it.
And that's a great metaphor, chemotherapy.
It's like, well, we have to poison the patient just enough to kill him.
It's like how you treat your dog for heartworms.
You load them up with an arsenical poison, strychnine, basically, to kill the heartworm, then keep them quiet while the worm is digested and hope that you don't kill the dog.
Right, right.
So it's like financial chemo, basically.
Yeah, it's like financial chemo.
And this is the part that nobody wants to wrap their brains around.
The global financial system is so insolvent and the global and the individual defined benefit pension systems around the West are so in arrears to their liability, their future liabilities.
They're all in negative net present value or net future value positions.
I don't care if we're talking about CalPERS or we're talking about France.
It doesn't matter.
They're all They're all in really, really serious trouble.
And so, you know, as always, government is over-promised and underproduced, and now we're in this situation.
And these people are trying to figure out a way to get out from underneath it.
Now, I think there's another angle on this, which is that there's also clearly an ethnic angle.
Which is that you have the people who are really behind the World Economic Forum.
And I know a lot of people, you know, think that the WEF was started by Henry Kissinger as a U.S. project and all this stuff.
I've heard all these arguments.
Whatever it was in the 1970s when it started, it's clearly not that today.
Okay?
Because Kissinger went to Davos this year and told everybody, stop.
We need to sue for peace for Putin or he's going to eat our lunch.
And everybody ate in Oregon.
Okay?
So we had our tell this year that Soros and Kissinger, you know, both of them came out.
They did their, you know, the 90-year-old oligarch cripple fight.
And, you know, Tim A beat Jim A. And, you know, that's where we are today, right?
That's it.
Like, that's the situation.
And, you know, the ideologues, the Klaus Schwab's and the Soros's, who are the real open borders, you know, destroy the nation-state communists, beat out Mr.
Realpolitik.
And now we're into fantasy.
And they've got all their agents in place all across the European Union.
And I think they're using the incredibly rapacious or incredibly obnoxious US and British and now Polish neocons to start World War III. To cover their insolvency.
Meanwhile, the Fed is trying to assist, I think, in their own way.
Not coordinatedly, but in the same way that Putin is running a financial attrition war on the European Union by starving them of energy, Powell's on the other side starving them of dollars.
Right, right.
Now, and let's talk about industry because we've got to bring in, of course, the Nord Stream pipeline sabotage.
I'd love to hear your view on who did that.
But regardless of who did it, by the way, industry in Germany in particular is just about to nosedive into oblivion right now.
Yeah, no, they've done a real number on, they've put ideological greed.
Of a German variety, which also have a very, very neoconservative worldview in terms of, because they're not just green ideologies like Robert Habeck, the vice chancellor, and the interdirector minister, and the bear box, the defense minister.
These people are not just true believers about the climate change.
They are true believers and that oil is the root of all evil.
And so therefore, it's very easy for them to then transfer that psychologically and turn their Jungian shadow into Vladimir Putin.
And that's where they are.
And they're very easily manipulated and to coordinate.
So as far as the Nord Stream pipeline is concerned, my theory on this or my view on this is very complicated.
I wrote a big piece for my blog, which was on the front page of Zero Hedge for all of Sunday.
It did about 400,000 views.
It was the best article I've ever had at Zero Hedge.
And I was really just kind of free associating when I put it all together.
I wasn't really set in my thinking on this.
And the day after I did that, I also did a podcast.
I said, oh, my good friend, Alex Cranor, who you, by the way, you should also interview.
And because Alex is brilliant.
And we did a podcast going over why...
Alex thought that the British and the Poles together did this with Davos kind of looking the other way, what I call the Davos crowd, the European oligarchs looking the other way because what they really wanted was the North Stream pipelines destroyed because in order for them to default on all their debt, And issue the big digital euro.
Go for the big great reset and the full fiscal and political integration of the European Union into the EUSSR with dominion over all of Europe.
In order for them to do that, they have to destroy the German middle class.
They have to take away everybody's property.
They have to kill the bourgeoisie.
This is like, this is Lenin 101.
This isn't some grand conspiracy theory.
This is just Lenin.
And they're just literally following the script.
But the Germans are so tied to their green policy, they don't realize they've been stabbed in the back by their own, quote, allies?
And their own government.
And the German people get it, but they don't know what to do.
Right.
They're literally frozen because politically, from what I understand about the average, from the people I've talked to in Europe about this, is that the German people are very conservative with their money, and they're very conservative in their political thinking, and they're not used to political turmoil.
If you're looking at the polling that we have in Germany right now, and just in general, there's six parties running around, right?
And that's not normal for German politics.
German politics is closer to American politics, even though they have a proportional representation system where, you know, you have two dominant parties, the SPD, basically nominally the Democrats, and the CDU, CSU, which is nominally the Republicans.
And then you have a bunch of minor parties, and they're always all supposed to have between 3% and 5% with some amount of small representation in the Bundestag.
And that's it.
But for the most part, they just flip-flop back and forth between their versions of the Republicans and Democrats with the minor parties nipping at their heels.
If you look at the board today, there's like five parties, and they're all polling above 7 or 8%, and no party ever can hold on to more than 25% of the German electorate for more than about six months.
This is weird territory for the Germans.
It's making them very uncomfortable as people.
They don't really know what to do with what's happening.
They don't know who to believe.
And German media, if you think our media is biased, dude, you ain't seen nothing until you see German media.
German media is as literally neoliberal interventionist as you can get.
It makes the New York Times look like a bastion of non-interventionism.
It's really bad.
There's Spiegel and all of that.
It's really bad.
So Germany is facing really an industrial wipeout, and the sabotage of the Nord Stream pipeline sort of cemented that.
There's no possibility of getting enough gas to really keep industry running.
We're talking about...
Yeah, go ahead.
Well, what I was saying...
Let me interrupt, but all I'll say is this.
The situation with Nord Stream is a little bit less...
Settled than we think it is.
Because the Russians have come out and said, pipelines are repairable.
We just found out this morning that one of the pipes running to Germany from North Street wasn't damaged.
So, and by the way, the Germans have been stealing gas from all the rest of Europe all summer.
Their stocks are full.
It's places like Italy that are actually in trouble.
Because the Germans and the French and In concert with other folks, have been stealing the gas that was supposed to go to Italy, or through sanctions, stopping the flow of gas into Italy.
Germany has always wanted to be the owner of the marginal therm of gas coming into Europe.
That was the whole point of Nord Stream 2.
Trump wasn't wrong when he called it a political pipeline, but it was for internal European politics, not for general European politics.
You're right, but let me throw this in.
The pipeline that can be repaired, according to Russia, is Nord Stream 2.
Nord Stream 2 was never active because it didn't have, I believe, the proper licensing approval from Germany, which was pressured by the rest of NATO to keep that shut down.
And finally, why would Gazprom even turn the gas back on if the pipeline were repaired unless Germany backed off sanctions?
Of course.
This is the point of bombing Nord Stream 1 and 2, which is why I think the Germans, why I think not the Germans, why the Poles and the British did it and why Davos looked the other way and were happy that they finally go to the British and the Poles.
They're doing it.
This is why, like I said, who did it is one thing.
Who gave the orders is different in why they gave the order or why they were willing to look the other way to give the plausible deniability and all that.
Is because the Poles understood that Nord Stream 2 was a political weapon for the Germans to keep the Poles under their belt, under their thumb.
Because the old Ukrainian pipelines and the old gas transit pipelines into the contracts into Poland would expire and then they'd have to buy their gas in Germany.
Coming in from Nord Stream 2 and then backflowed back into Poland through the global pipeline and some other pipelines, which is why the Poles then created that deal with Norway to get the pipeline to just open the same day that the bombing happened.
So that was always the point of Nord Stream 2.
But from the British perspective, who are fervently anti-Russian and have been for 200 years, They saw the opportunity to take away Putin's economic leverage over Germany and the rest of the EU in case they decided to wait until they decided to wobble, leaving Putin with nothing but military options.
Because what the Brits want is to get the United States to fight another World War for them, the same way they got us to fight World War I and World War II. This was Churchill's plan in both of those freaking wars.
Because Churchill was an undersecretary, I think, during World War I and then became prime minister.
He was involved in both of them.
And then there are other members of the British establishment who were involved as well, obviously.
You know, this has been British foreign policy, and they've used America as their physical empire's wane.
They've just turned their influence over the United States to soft power and then used that to dominate our foreign policy thinking.
I try to explain to people all the time, even if you don't believe that MI6 agents literally work at the CIA and the State Department, that's fine.
But who writes all...
If you look at our military doctrine, if you look at our foreign policy doctrine that's taught in political science courses over at Georgetown and VMI and all the rest of it in the Ivy League and then the military doctrine at West Point, what do you see?
You see exactly the same things that the British have been talking about for 200 years.
It's all this Wolfowitz Doctrine stuff that goes back to Halford Mackinder in the 1850s about controlling the World Island.
And if we can't control the World Island, then no one can control it.
And so some other elements, though, that are relevant here that I want to get your take on.
So you just mentioned the British want America to fight their war, but the Americans want the Ukrainians to fight the war with Russia, with with American munitions.
But the munitions have to be manufactured by an industrial country.
America is dangerously low on a lot of munitions.
Even the latest HIMARS that they said they're going to ship to Ukraine are now just beginning to be manufactured.
It's going to be a couple of years before they're even delivered, which is insane.
And then Germany, how is Germany, even if Germany wanted to supply munitions to Ukraine or to NATO, they can't run their factories when electricity is a thousand percent higher.
And you have gas restrictions, which, by the way, the German government favors residential use of gas first, meaning most of the cuts have to come from industry.
So how are you going to manufacture weapons to win a war if you have no energy?
Because they don't think they actually are going to win a war.
I think what's setting up here is that They need to create an environment.
I read a great Substack article today by a guy by Big Surge.
I don't know if you've heard of him.
Yeah, I have.
I have heard of him, yeah.
Okay, he wrote a great article about Putin and von Clausewitz this morning, the other day.
And, you know, I've been thinking about this for a while now, and I've been arguing with my partner in Gold Goats and Guns, a man by the name of Dexter White, who's very, very sharp.
And he and I don't agree, you can see eye to eye on what's going on with the war in Ukraine, but he's more of a historical bent than I am.
And so I respect his opinion on these things, even when I don't agree with him, which is what makes our relationship great.
We can argue with each other and still respect each other in the morning, which is almost verboten in political analysis in the United States anymore, right?
No less kind of run a business together.
The thing about what Big Surge was talking about in his article today was that Putin understood at the beginning of all of this, and along with his people, that this was an existential fight for Russia.
He understood that at this moment in time, given the vulnerabilities to the West, they're only out here, was to blame Putin.
A war with him and Russia on the default and the insolvency of the West.
And at the same time, then turn all of that anger and frustration from the people in the West and turn that into a reason to go to war with the Hitler.
And that's why they've been trying to turn him into Hitler.
And they've been doing this for 20 years.
Putin, on the other hand, also understood that he didn't have a majority of the Russian population who believed that this was an existential fight now, a civilizational war, as Alistair Crook and I have talked about many times, that this is a civilizational war between two different civilizational ideologies, and that he had to make that argument.
The only way for him to do so Was to effectively start a war and prosecute in a way that didn't finish the war, but then expose the absolute hatred and depravity of that hatred all across the West to get the Russian people fully on board and mobilized.
Which is exactly what happened, even when the tennis championship was banning Russian players and NASCAR was banning Russian drivers and the Russophobia.
Yeah, you're right.
And, of course, the economic sanctions.
And the sanctions, which explicitly targeted Russian people.
Absolutely.
With American senators and British MPs saying things like, the Russian people need to overthrow Vladimir Putin or we're going to starve you.
Until you do.
Now, how do you think that played in the regions around Moscow?
Do you think that played the way Lindsey Graham thought it was planned?
No.
No, but this reminds me of America's Pearl Harbor.
It was Pearl Harbor that convinced the American people to jump in and back the war.
Right.
Now, we haven't had that moment yet, have we?
We have had a PR campaign with Zelensky running around like he's on tour, like he's freaking, I don't know, Taylor Swift, right, running around on tour trying to drum up support for the Ukrainian people, backed by the WEF, backed by the British neocons, because they're all agreed about one thing, right?
They're all agreed that they need to kill Russia because they want to kill them and take their stuff.
Like geopolitics is a game of D&D as prosecuted by 14-year-olds.
Yeah, exactly.
I mean, what is this?
What is this?
World of Warcraft, for Christ's sake?
Yeah.
So that's why these people, honestly, you know, we'll just go in and we'll just kill them and take all their stuff and then we'll go home and we'll play with all our bounty and our loot.
No, and if you call for peace, like Elon Musk put out that survey, if you want peace, then suddenly you're a traitor and the worst evil in the world.
Yeah, exactly.
So, you know, we're going to, so what I'm seeing as this is playing itself out now, Is the very dangerous possibility that since the beginning of the war, who has tried like four or five times, I've lost track at this point, of trying to frame Russia for some horrible, heinous war crime of mass graves or shooting civilians in the streets and all this stuff?
Yeah, Zelensky.
Yeah.
No, it wasn't Zelensky.
And who do you think was...
Who's the master at this?
Well, I thought it was Boris Johnson at one point.
It is.
It's the Brits.
It's always the Brits.
It's always the British.
The gas attacks in Syria, all staged by the British.
White helmets, those are...
The white helmets in Syria are British NGO backed by Soros money.
Those organizations tie directly back to all those guys coming out of MI6, all the Bill Browder types.
And Igor Kolomoisky is the latest iteration of this.
It's all the same stuff over and over and over again.
The dumber these things look, Assad gassed his own people when he was winning.
Right.
Or that Russia blew up their own pipeline.
And bombed a nuclear power plant that he controlled.
Oh, I know.
That was always insane.
I never understood who would believe that.
Other than the people who still think that geopolitics looks like a James Bond movie.
The guys who think they still run the world like James Bond.
I'm dead serious.
When I look at this stuff, I just can't see anything else anymore.
But then, okay, throw into this mix the Bank of England practically facing insolvency because of the pension bond collapse crisis that they had to jump in with massive, essentially, quantitative easing, buying up all the bonds.
So is that...
And that's got to be a result of the interest rate increases.
Right.
Go ahead.
Okay, so this brings up a different angle.
I touched on it a couple minutes ago, but I'm glad you brought it up because here's the gig.
So who's still angry?
Who's still really, really angry about Brexit?
Angry about what?
Brexit.
Oh, Brexit.
Well...
The European Union?
Yeah, the EU's.
The globalists?
Brussels, yeah.
Right, exactly.
Exactly.
Who are the two financial centers in Europe that are not a part of the EU anymore?
Or one never was, and one now isn't.
The Vatican and the City of London?
No, not the Vatican.
The Pope is pure WEF, and he's not even the real Pope.
Yeah, right, right.
No, it's Switzerland.
It's Switzerland.
Zurich and the City of London.
And who are the two in the two weeks after the Queen dies and Liz Truss takes over and she's attacked 18 ways from Sunday?
Not that she's like anything great or anything.
I don't even like Liz Truss.
I think she's a moron.
But like, it's so very clear that the two big moves by Davos are In this fight for control over who's going to...
See, what's happening right now, this is what this factualization, all this stuff we've been talking about.
Putin is easy.
They all hate Putin.
But the question now, but the big question is, and what Putin is...
A war of economic attrition and physical attrition is done in Ukraine is expose all the cracks within the factions here in the West.
As the political situation here deteriorates, as the economic situation here deteriorates, as inflation rages out of control, and they stop winning.
What's the first rule of a hockey team?
Winning solves all problems in the room.
When they start losing, people start pointing fingers.
And, you know, I slept with your wife, and why didn't you back-check with that guy?
I'm an old hockey fan, so for me, this is the easy way for me to think about it.
So this is what's happening in the West.
And right now, you've got an existential fight over who's going to control Western policy to fight Putin and the Chinese, right?
Right.
And is it going to be Europe?
Is it going to be the United States?
And Britain's caught in the middle.
Switzerland's caught in the middle.
And so the European Union, or Davos, has been – saw the opportunity after the Queen died to try and take out the British because they lost the fight for the Tory party.
Liz Truss was not the first choice of the WF.
Reese's Cynac.
So Truss, nominally, you have to put in the camp of old British neocons and American.
Yeah.
Yeah, like Margaret Thatcher's.
And she's too dumb to realize who she's actually working for or whatever.
I don't care about any of that.
But you put her in that camp, right?
And then you've got Sunak, who's clearly going to put the kibosh on invoking the Northern Ireland Protocol and finally finishing off the hard Brexit that Johnson had mostly negotiated.
So they had to stop that.
So what did they do?
They ran some stops on the UK guilt market after the stock markets are down 35%, and the pension funds are all short of collateral.
This wasn't hard.
And the very next weekend, they start a whisper campaign about Credit Suisse going belly up, which didn't materialize.
Because the Bank of England actually responded correctly to the threat by having to reverse course.
But then that turns around.
They try to use that to play into the, hey, Fed, you can't do this.
You can't keep raising interest rates.
See, the BOE, they just pivoted.
The RBA over in Australia, they only raised by 25 basis points.
The UN is screaming at you to not raise interest rates because think of the children.
It's ridiculous.
It's ridiculous.
But the Fed has said it is committed to a multitude of continued interest rate raises.
So in essence, this is an interest rate carpet bombing of the United Kingdom by the United States.
By Europe, the Bank of England was the first one to start raising rates, Mike.
They raised three times by a quarter point before the Fed even started setting their rate hike schedule.
Mm-hmm.
So the Bank of England already understood what was happening, which was that Powell was in control.
The Fed had weathered the storm in 2021 to try and oust Powell.
And they started raising interest rates.
Slowly but surely.
This is the way everybody expected Powell to raise interest rates.
Quarter point at a time.
Yeah, no, he has a quarter point at a time.
And then they tried to slip out from underneath it.
And then I think Boris Johnson was nuts and sluts out of office.
And then the big push by Brussels to win back the UK and force them back under the thumb, they failed there.
Again, I keep saying over and over again, when you look at these moves, you have to ask yourself, who has the power, really, to affect these political outcomes?
And that's a good question.
Well, I think it's in New York banks.
So, let me ask you some practical, then, conclusions of what we're talking about here.
First question.
I guess it's two questions.
Do you think the Fed will pivot, or when it will pivot, or how high will it raise rates into 2023 in your analysis?
I've answered this question a couple of times, and I like to get flipped when I say so, just because I'm not a hard...
I'm not a hardcore bongo.
I'm not.
And I don't even try to marp that.
What I try to do is understand it.
I understand just enough of this so I can explain the geopolitics and explain the politics.
But there are hardcore guys out there who have done the work.
They think they're looking at the maturity schedule of the U.S. Treasury maturity curve and all that stuff.
I can say the following.
I've said many times, picking a number out of my head, saying 6%.
That's where I think the Fed pivots.
So that's into the spring of 2023, roughly?
Easily.
The Eurodollar futures market is now trying to figure out when the Fed's going to pivot.
They keep wanting to pivot in December, and then it's now March, then it's June, but the curve keeps flattening for all of 2023.
By the time we get to the midterm elections, the inversion may move out all the way to September.
And if that's the case, then that's when they think that the euro dollar futures market doesn't know what to do.
You know why?
It's been drained of its liquidity.
And just like every other market that's seen high volatility, when you whipsaw guys out of the market, guess what?
There's no players left.
See, think of it this way.
We've been watching oil now since the beginning of the war in Ukraine.
Go look at a weekly chart of the price of Brent crude.
And you'll see, before the war, there was a certain amount of volatility.
If you know how to read a candlestick, you know how the bar, the size of the bar tells you the volatility for the week.
Then look at it after the war.
And the bars are three times as big.
But when you can whipsaw in an algorithmically traded market where there's no humans involved anymore, really, there's just headlines, there's just computers reacting to headlines, then you can whipsaw guys out of the market, both legitimate hedgers, producers and consumers, and speculators.
What also did the UN talk about the other day?
They wanted to get all the speculators out of the futures markets.
Like, this is sincere stuff.
And now, they've already done this, though, by stop-washing these poor guys.
Lather, rinse, repeat, and just washing them out of the market.
So there's not nearly the same volume as there was at the beginning of the year.
You can go back and look at a multitude of headlines where Goldman has come out and said, the oil market doesn't make any sense.
Because the spot price and the futures price are like, there's no relationship between them.
And same thing we've been waiting for to happen in gold for how many years now?
Same thing in silver.
Well, it's happening in oil.
It's happening in copper.
It's happening in nickel.
It's happening in cattle futures.
It's happening everywhere.
Because they're using the headline volatility to wash people out of the market so that then they can take the market and move it where they want when it's thinly traded.
So they can turn the entirety of the commodity futures market into the average CDS market.
The credit to Baltimore market.
A guy can walk in with $5 million, move the thing 100 basis points, and then start a whisper campaign in the boiler room on Yahoo Messenger and take a company.
Gee, that doesn't sound safe.
This is what they're doing.
Well, what's your prognosis for the euro itself?
How long will the euro endure all of what's going on?
I don't know that it's going to endure much longer.
What I keep seeing is every bounce in the euro gets weaker and weaker.
We just had a bounce in the last four or five days.
It was a nice shortcoming rally thanks to the BOE intervening.
And everybody wanting to resurrect the whole Fed pivot thing.
By the way, to answer your original question, I think the Fed pivots sometime in the first half of 2023...
Not pivots, but they stopped raising rates.
Okay.
But they're not going to cut rates after that.
Not unless there's sincere issues within the American financial system.
Now, I don't believe...
I do believe that the Fed has put liquidity tools in place and they have fine-toothed control over the flow of dollars domestically to such an extent that we're not going to see a replay of 2008.
When Italy's bond market blows up or Spain's bond market blows up because there's been a disconnection between the indexing of rates in Europe and City of London and America.
Our debt is not indexed to LIBOR anymore.
Our debt is indexed to SOFR, the secured overnight funding rate.
The secured overnight funding rate, the fundamental difference between those two things is that one's collateralized, SOFR, and one isn't.
It's just an opinion of a bunch of bankers that get together on the phone and go, yeah, let's set it at 3.9% this morning.
Okay, that sounds good, even though they were trading at a 4.5%.
Well, we'll set it at 3.9%.
You know, LIBOR is an anachronism.
So, for how long?
I'm sorry.
I don't know how long the ECB can survive.
Timing is for the gods.
Well, and I'm wondering, actually, what about the yen?
And then also, isn't the Fed buying bonds?
Isn't the Fed really floating in the debt market right now?
No, the Fed is serious about taking.
The Fed is serious about QT. Daniel DiMartino Booth has made it abundantly clear that, look, the Fed started selling U.S. Treasuries in June, and they started selling some mortgage-backed securities in June.
Now that they buy some here or there, there's other transactions, of course, they're up.
But most of these transactions take three months to clear.
And then it takes another two weeks to report the trade as being cleared because the clearing only happens on the 15th of the first of the month.
So you can have a transaction that was executed in June not show up on the Fed's balance sheet until October.
And that's why it makes me angry when I hear commentators who should know better try and make it look like the Fed hasn't followed through on anything.
It gets me really angry when I see that from people who are more veteran market analysts than I am.
So if I know this stuff, they know this stuff.
So what book are they running?
You know, I'm not running a book, Mike.
Like, I don't own any stocks anymore.
The minute I got into this and I got into the newsletter business and the punditry business, I'm like, I can't own any of this stuff.
I know myself too well to know that I would talk my book, just like every other freaking punter in the world.
Do I own gold?
Sure, I own gold.
Does any rational person in this world today looking at what's around?
If you don't own any gold, you need therapy.
True.
Like, you know, should you own a little Bitcoin?
Yeah, you should own a little Bitcoin.
Like, it's not, you're not tough, but there's, but when it comes to everything else, well, that's a more complicated scenario.
And so when I recommend stocks to people in my newsletter, understand, I tell the people, I don't own any of them.
Yeah.
While some would say I don't have any skin in the game, I would say I'm allowed to beat myself much needed objectivity because I know myself too well as a very emotional person that I won't be able to get away from that trade.
It's bad enough I'm putting my reputation on the line.
Forget my money.
So let's talk about your newsletter and what you offer, because I want to be respectful of your time.
We need to wrap this up, but tell people what you offer at TomLelongo.me.
Okay, so the public blog is just a public blog, right?
So I write public articles all the time, but I also have a Patreon.
And that's really where, I'll be honest with you today, that's where most of my work really occurs.
I try to write one or two public blog posts a week anymore, but I write at least two private blogs every week, which are really my notebook.
As I see things unfold, and I do a kind of...
Bill Blaine has his morning forage where he just kind of throws out whatever he's seeing in the market.
It's his way of journaling in the morning.
Yeah.
They just do their journal in the morning.
They sit down for half an hour and they write what they're thinking.
Well, I do the same thing.
I usually pick an issue and then talk about it and then spin it out.
And because I've got so much stuff swirling in my head, what used to start out as like 300 little word, little stubs.
I'm now turning it into 1,500 word epics.
It's crazy.
And then some of those get turned into public blog posts later if they're still relevant a week or two later.
And I also do twice weekly market reports.
They're usually about 45 minutes, a mixture of commentary and chart analysis of the major strategic markets like gold, like silver, like Bitcoin, the Dow.
I will go over the Eurodollar futures curve.
I try to explain what I think is happening.
I'll do oil here or there.
I also do bespoke Research for my people.
So if someone wants a cold chart read on a company that they're invested in, more than happy to throw the chart up when I think of it.
Okay.
And that's the base level.
That's $4 a month.
Oh, wow.
And then if you want that and you want the newsletter, we actually put it all together with about an 11 to 12-page monthly newsletter with all original material and a portfolio strategy with honest-to-God picks and buy prices and all the rest of it.
That's $12 a month.
Well, that's what we do.
And I'll be honest with you, like, you know, I can't see it.
You know, I also write for Newsmax.
I also write a financial newsletter for Newsmax.
I write Ultimate Wealth Report for that.
But yeah, the Patreon, that's how it works.
I field everybody's questions on a daily basis.
I try to give them at least four bits of content a week.
It's mostly to keep me in the game.
Because I feel the obligation to write or record four times a week.
If I don't, then I feel like I'm falling behind.
Well, folks, so for the price basically of one kilowatt hour of electricity in France, you can get a whole month of Tom Luongo.
If that's your bag, man.
For a Starbucks coffee.
Yeah, it's the deal of a lifetime, frankly.
I mean, yeah, I think so too.
I have my patrons tell me all the time I'm not charging enough money.
But it's funny.
We may have to call in the inflation tax.
But as far as that, I don't care.
Because honestly, it's not about the money.
It truly isn't.
Look, if you do good work, you get rewarded for it.
You will drive people.
Quality sells itself.
You will drive loyalty.
You will drive...
Brand recognition.
Eventually, you get there.
Okay, quick read before you go.
Quick read on silver.
Where do you think silver is?
Any thoughts?
Yeah, I have a lot of thoughts on silver and a lot of interesting thoughts on silver that a lot of silver bugs aren't going to like.
First, I think that silver is now the premier industrial metal in the world that is no longer a monetary metal.
Okay, so that's the first thing.
But I think it's replaced Dr.
Copper as the leading indicator of where the industrial metals market is going.
Not to say that there isn't a monetary character in the way silver trades, but it is much, much less important than it ever has been in the history of silver.
I would give silver no more than a 15% monetary character and about 85% industrial character.
Look, the entire chip industry, the entire tech industry runs on silver.
And a lot of the green energy components use silver.
Of course.
And there is no stock-to-flow ratio in silver.
It has a stock-to-flow ratio of zero.
Like oil, it has a stock-to-flow ratio of zero, whereas gold and Bitcoin have immense stock-to-flow ratios, meaning they act as stores of value in the minds of the people who are holding it, whereas silver is a free-flowing metal around the world.
So that being said, I think the silver market is horribly manipulated.
I think it's a mess.
I think it's incredibly volatile, and I think it's also an important bellwether.
For where we are in the monetary cycle.
So right now, as of right here today, what's interesting of the three quote unquote safe haven assets, right?
Gold, silver, and Bitcoin.
About three weeks ago, if you look at a weekly chart and you just...
I don't use like RSI and MACD and Fibonacci.
I don't use any of that stuff.
I just look at bars.
And I just look at bars.
I look for trends and I look for reverses.
That's it.
And maybe some horizontal support and resistance.
And I note highs and lows and those are the things that matter.
You look at the pattern of the charts, very simple.
About three weeks ago, when gold was breaking down to 1600 bucks or trying to break below 1600, Bitcoin was thinking about, you know, Bitcoin has been basing for a while.
If you looked at the trade on three of them, Gold's chart is technically the weakest.
Silver's leading into that was technically the weakest and was pointing towards 1550 on the downside.
And then silver quickly reversed while gold still continued to drop and Bitcoin kept basically futzing around, not doing much.
It would break out and then it would immediately collapse.
It would break above 20 and then get crushed two days later into the weekly close.
It was not interesting.
It still isn't very interesting.
Bitcoin is basing between 18 and 22.
Silver, on the other hand, turned the technical corner on the weekly chart two weeks before gold did.
Wow.
So I'm not saying it's in a bull market situation.
What I'm saying is that silver turned the corner two weeks before gold.
It has a couple of technical hurdles to get over.
It really needs a close this week above $21.
If it gets a close above $21 this week, that's going to be really significant from a technical perspective because then you're going to get an even more short cover.
But it was clear that both the move in gold below $1,700 and the move in silver towards $1,800 were what Martin Armstrong would call a false move down, where the shorts pushed the market well below where it was comfortable, and the shorts got themselves way overextended.
And when the shorts get way overextended, then the snapback rally in the opposite direction is that much more violent.
And we saw it in silver, and we're starting to see it in gold.
Bitcoin hasn't moved yet.
Wow.
So that's the way...
This is the kind of thing I do in the market reports for people when we do these.
I do them on Wednesdays and Sundays for a reason.
Wednesdays because we're looking at the midweek, trying to anticipate what the close for the week is going to look like, and then we do the close.
And we do that on a weekly basis and then we get to the end of the month, the end of the quarter.
Obviously, I then take a report and look at the quarterly chart or the monthly chart, depending on where we are, and then broaden out and look practically through time to see what it looks like.
Because that's the way you're...
Everything in chart analysis is fractal, right?
You use the same rules to look at a one-minute chart as you look at a one-year chart.
Yeah, exactly.
So, you know, what you're looking for is always, if you see a breakout on the weekly chart and it doesn't propagate and change the state of the monthly chart, then it's just a...
A minor blip.
An artifact.
It's not important.
But if you see it propagated into the monthly chart and the quarterly chart, now all of a sudden you've got something that's...
Now you've got a really powerful trade setup where if you're writing a monthly newsletter, you can go, yep, that market's turned the corner and I probably got nine quarters.
I can go buy something now, anything in that space.
Let's buy the best company in that space and let's put that in the portfolio and let's ride that for two years or three years.
Yeah.
Okay.
Well, you've got a lot to offer people.
And I just want to, again, give out your website, tomluongo.me.
And I really want to thank you, Mr.
Luongo, for spending this time with us.
This has been a fascinating conversation.
We've covered a lot of ground.
Appreciate it.
And anytime you want to do it again, just give me a ring.
I'm happy to do it.
Love to do that.
Yeah.
Well, I'm sure we're going to have some fireworks happening in the next few months.
We'll want to have you back on to help analyze it.
Okay.
Well, have a great night.
Thank you, too.
Okay.
Take care.
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