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March 29, 2023 - Health Ranger - Mike Adams
17:04
BOOM AND BUST: How to harness the cycles of money expansion and contraction
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For at least a couple of decades, we've been living in a time of very easy money.
And I know it may not seem like it.
I'm like, what do you mean?
Money's not easy to come by.
But relatively speaking, it actually has been.
We've been living on borrowed credit, i.e.
money creation, artificially low interest rates for much of this time, especially during the Trump administration and during much of the Obama administration.
Interest rates were artificially low in order to create money and pump up the stock market and make everybody appear to be rich and boost housing prices, which makes people feel wealthier.
And so they're more willing to spend money and it boosts the economy.
But it's a mirage, right?
Because at the end of the day, the debts come due, the currency becomes worthless, the money printing ends eventually.
And when it comes to an end, it's not an easy time for anybody.
And part of the message I want to get across in this podcast is a message of being prepared for the kind of financial conservatism, not political, but just financially speaking, The conservative financial approach to living that we're all going to have to adopt in order to survive.
Having success in a business has been artificially easy, believe it or not, for a lot of this time, for a couple of decades.
And I know if you run a restaurant, let's say, or a small local business, you might be saying, no, it hasn't been easy at all.
I've put in all kinds of work to make that happen.
Yes, you have.
But your customers were the beneficiaries of easy money across all these industries that are really directly impacted by loose monetary policy, such as tech and even crypto and housing and so on.
Now, even crypto benefited from this.
Easy money, i.e.
low interest rates, really helped create a crypto bubble Because it was easy, especially with on and off ramps like Silvergate Bank and Signature Bank and even Silicon Valley Bank, it was easy to convert easy money in the dollar realm into leveraged easy money in the crypto realm because you could convert back and forth between dollars and crypto.
And so, believe it or not, low interest rates, the Federal Reserve's policies actually created the crypto bubble.
And it's no surprise or coincidence that higher interest rates have destroyed the crypto bubble.
You know, crypto is down, what, 65% to 70% off of its highs right now.
That's due to rising interest rates.
And it's due to the fact that people end up selling crypto to cover their debts or obligations or bets gone bad in the dollar world.
So these two things actually have moved together.
And of course, in the crypto world, they amplified the interest earned on money.
There were crypto outfits where you could deposit crypto or what's called staking.
You could stake your crypto coin there, and they would offer to pay you anywhere from 10% to 50% interest, which of course is insane and unsustainable and was bound to collapse, and it has largely collapsed.
But it doesn't mean that crypto doesn't have a role for the future.
I believe it does.
And I'm glad crypto exists.
And I've even become a stronger advocate for, let's say, considering certain elements of crypto as like an emergency backup liquidity plan.
Not saying that it's a great place to put all your wealth.
I think gold and silver are actually better or even land is better.
But crypto has a role to play.
Nevertheless, the crypto markets are being crushed by the Fed's monetary policies and also now the White House and the Treasury actually going after crypto and the CFTC, for example, filing charges against Binance and Jason Sun was charged by the DOJ, I believe.
For crypto-related allegations and then also, of course, Miles Guo has been charged by the DOJ in what they call a $1 billion crypto scheme.
But that might just be political targeting, frankly.
There might be nothing to that at all.
We have to see.
I mean, the DOJ is probably working with the CCP to try to take out Miles Guo.
That seems to be the most likely thing that's happening, but we'll wait and see, watch for more details to emerge so that we know for sure.
Nevertheless, the overall picture of what's emerging for you and I is a time of much more difficult Fiscal policies or tighter policies, it's going to be more difficult to acquire, well, currency or money.
Things are becoming more and more expensive, which of course is reflecting the devaluation of the dollar itself, and it's indicative of what's coming across the board, which is a far more difficult era, which will probably last Ten plus years, a more difficult era in which to acquire wealth.
And in other words, we're riding out, we already hit peak bubble, easy money, relatively easy dollars, relatively easy loans, relatively easy crypto gains, and so on.
That bubble is over.
We are now on the downside of that bubble.
And on the downside, we're going to see the destruction of capital, assets, wealth, and so on.
The destruction is already underway.
And you're seeing it with, for example, Silicon Valley Bank and the collapse of Credit Suisse.
Three banks have failed in the United States.
Looks like a fourth bank is probably about to fail.
And over the next six months, you're going to see this ripple across many different banks.
You could easily see another half dozen banks fail in the next year, for example, and it doesn't have to happen right away.
There can be delays of months between bank failures because these liquidity gaps can be covered for quite some time.
It's not always the next day that the debt comes due, you see.
So it's really worth paying attention to this because those bank failures can kick in over time.
And that's part of the wealth destruction.
So again, to paint the big picture, we rode through the peak of relatively easy money.
We're now on the downside of that bubble, which is going to be tightening rising interest rates that we've seen now for quite some time, and also wealth destruction.
Reflected in higher costs of goods, groceries, and so on.
Now, how do you ride this?
How do you surf this?
If we're a surfer and there's this giant wave, what's the correct way to surf this so that you survive financially?
And let me give you an example of what would have been perhaps the smartest move of all.
But the overall concept is that At the peak, if you know when the peak is, at the peak, you convert the inflated assets into real assets.
And then when the downturn comes, which we're in now, your real assets preserve and hold value and you ride it out, at the end of the day, you end up owning real things, such as land and gold and silver and things like that, real estate, whatever.
So the smart people, let's say, sold Bitcoin at, what was it, $65,000 a coin at some point, I think, last year?
Right around there.
The smart people sold Bitcoin at $65k and bought gold, or real estate, let's say.
So they traded in the virtual currency, the Bitcoin currency, for something real that will hold value.
And then they averted the downfall of crypto.
Because, yeah, crypto fell 65% to 70%, something like that.
Gold did not and will not.
Real estate did not and will not, except perhaps in certain blue cities where everybody's trying to get the heck out as quickly as possible.
You could see some real corrections in real estate there, but that's not across the board.
Wherever you have inflated assets, think about strategies to sell those assets and convert them into things that are real.
Those inflated assets include right now, by the way, dollars.
So we could even say the dollar money supply, the M2 money supply, has been inflated in order to flood the system with dollars to create the illusion of wealth in people who are able to hold those dollars.
But again, it's just the illusion because the value of those dollars continues to fall and has fallen.
Frankly, since the very beginning, since the creature from Jekyll Island in 1913, you know, since the creation of the Fed, the dollar has fallen.
And since 1971, when we were taken off the gold standard, then the dollar really began to fall quite aggressively.
And we've lost something like...
Just since 1971, what is it, 96 or 97% of the purchasing power of the dollar, just in that period of time, not to mention all the way back to 1913 or so.
So then, continuing with our method for surfing the waves, surfing the cycle here, at some point we're going to hit the trough of all of this.
The lowest point of the collapse will be achieved, probably sometime in the next couple of years.
We're on the way down right now, but we haven't hit bottom yet.
When it does hit bottom, there will be another expansionary cycle following that.
More money printing, more easy money, lower interest rates, and so on.
That is assuming the banking system survives all this, assuming the currency survives all this, which is not at all a sure thing.
But even if it's a new currency or a new banking system, there will be a new expansionary phase.
So what's the smart play in that expansionary phase?
Well, the smart play at that time Would be, believe it or not, to sell your gold and silver and land, get back into the currency of the time or the money system of the time that is in an expansionary phase, and then make investments in the businesses that are going to benefit from that expansionary monetary policy.
Make investments in whatever, manufacturing businesses, stocks, not bonds in this case, but stocks.
And maybe if you can, own some of these small businesses outright.
If you're wealthy enough and you could buy some small local businesses that are benefiting from the expansion, that would be the time to do it.
At that time, the role of gold shifts, in my view.
Gold is always a backup emergency plan against a total collapse.
But in the expansionary phase of the economy, you don't necessarily need a store of value that resists the losses of equity values, which is what gold is really, really good at.
In an expansionary phase, it might make a lot of sense to sell your gold back to the gold dealers, and you're going to have some kind of spread on that.
You'll lose a little bit, not too much if you have a reputable gold dealer.
You'll lose a little bit selling it back, maybe 2%, 3%, something like that, maybe 4%.
And then you'll have that liquid cash in whatever the new currency is to invest in the new boom.
So let me give you a specific example of how this might play out.
So let's say that there's a secession movement in the United States and the state of Texas becomes its own new country.
And this could very well happen.
Well, then the state of Texas would launch its own new currency And it would very likely have a relatively low taxation policy.
It would separate itself from the federal government.
And without federal taxation, the Texas economy would be primed to absolutely boom.
I mean, there could be a golden age of massive expansion and investment of people from all over the country bringing money into Texas and building new businesses and attracting investment funds and VC funds and new banks being set up.
But Texas could become a financial hub for North America.
And the business could be booming like crazy.
Well, in that environment, Sitting on gold doesn't now have the same purpose.
Again, gold is always great as a backup, but in that environment, it actually makes a lot of sense to sell your gold, take that money, and invest it into the boom, where it can be amplified by that booming expansionist economy.
But then one day, of course, again, that boom will turn to a bust.
These are the cycles of history.
Boom and bust, boom and bust.
You know, bubbles pop.
And you want to ride the upside of the bubble, but you want to get out of the top of the bubble and get into hard assets at the top of the bubble, but then at the bottom of the trough, sell your hard assets, get back into investments to ride the expansionary phase of all of this, you see?
So these waves can take a very long time.
You know, it can be a couple of decades.
We've been in this artificial expansion wave for a very long time, probably way too long, you know, come to think of it.
But if we are wise and we are nimble and we know how to move things around, and this is why I encourage you to have multiple bank accounts so that you can move funds around, then you can navigate this.
You can get into gold or out of gold as is necessary.
Right now I say get into gold.
Get into silver.
Because we are on the way down in this cycle.
The trough is not yet here.
The trough may be still a couple of years away.
So this is the time to be accumulating, in my opinion.
But I'm not your financial advisor.
Nevertheless, in my opinion, I say this is the time to accumulate hard assets and get out of the bubble of dollars.
But...
Whether or not you agree with that, do your own research obviously, whether or not you agree with that, the overall concept of moving in and out of these assets as you ride these waves, the peaks and the troughs, this makes a lot of sense.
You need to preserve wealth when wealth is being destroyed and then you need to magnify wealth when wealth is being created.
So keep that in mind.
And again, do your own research.
These are just my opinions.
I'm not a financial advisor.
I'm not your financial advisor.
But these are some of the strategies that I use and that a lot of other very successful people use.
They're conservative strategies to preserve wealth when it matters so that you still have wealth remaining when you need it to make investments and ride the wave up.
So thank you for listening.
Mike Adams here, The Health Ranger, naturalnews.com, and also brighton.com.
Take care.
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