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April 12, 2023 - Health Ranger - Mike Adams
43:46
Tom Luongo: How the Fed is DEFENDING America against European globalist tyrants...
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Alright, welcome to today's interview with one of our favorite financial analysts.
Mr.
Tom Luongo joins us.
His website is tomluongo.me.
His blog is called Gold Goats and Guns.
I'm going to get it right.
It's three G's and it's three very important things.
I was just saying, Tom, I own goats too.
I have Nigerian dwarf goats.
And you were just saying one of your goats gave birth this morning.
Is that right?
Yeah, as a matter of fact, she did.
And she's a mini Nubian, so she's half Nigerian, dwarf, half Nubian.
Oh, that's great.
She's one of my older does, and we were really a little worried about her, because last year's birth for her was pretty traumatic, actually.
And being an older doe, we weren't sure what was going to happen.
And we were literally laying out in the shelter with her last night at about 10.30, going, are you going to have these tonight or what?
Because we didn't want to wake up in the morning and have what we had last year, which was To have her laying down in the mud with a kid half out of her and she nearly dead, which is what happened last year.
We were able to get her through that and we saved the kids and saved her.
And then she had two beautiful kids this morning.
Everything worked out okay.
Oh, that's wonderful.
That's wonderful.
I love the fact that you have so many different animals there as well.
We love animals too.
We have our Belgian Malinois right here in front of the desk in our studio.
Hey, there's something else we have in common, Tom, that I learned about from listening to many of your interviews.
I mean, I'm a fan of your work, by the way, and I love to listen to your interviews.
I love the fact that you don't hold back.
I love the fact that you are opinionated because I think you're correct, but we'll get to that.
You and I both have a background in chemistry and running analytical instruments in chemistry.
And I was so shocked to find that out because, you know, I'm the lab director of our ICP-MS lab.
We do heavy metals analysis for food analysis.
Oh!
I used to do that.
I never did ICP-MS, honestly, but I jockeyed an ICP-AES for years, so atomic emission spectroscopy.
Exactly.
Yeah.
Oh, yeah.
And food analysis.
I worked for Food Lab for a while.
I got fired from that job.
Is that right?
And, no, I used to do fat analysis for calcium, magnesium, and whatnot.
Oh, yeah.
For food analysis.
What's the word I'm looking for?
The USDA... Just like nutrition facts, label compliance?
Nutritionally, thank you.
No, seriously, I used to do this years ago.
That's amazing.
See, I was really stunned to learn that about you.
And just yesterday, we received shipment of a new gas chromatography interface for our triple quad, and we're going to use that to test for dioxins in the food.
So it's like...
Wow, so a triple quadrupole mass spec to do...
I didn't do a lot of GC in my life, but a lot of metals analysis I used to do.
I mean, atomic absorption, graphite furnace atomic absorption for me was the big thing.
I did a lot of years before that.
I've done SEM work.
I've jockeyed an ICP. I've done it all.
See, I'm not surprised I learned that because I consider you to be a very bright person.
I think you have a really good grasp of what's going on globally, connecting the dots on the financial situation, and the fact that you're kind of a multidisciplinary person is no surprise.
But let's get into the financial side, if you don't mind.
No problem.
For those listeners who are new to you, the phenomenon that is Tom Longo, and your current, let's say, the core theory that you are espousing, and some people get it, some people criticize it, which is fine, but could you just give us a quick summary of this theory of Jay Powell, the Fed, the Euro, all of this?
Sure.
When you have interest rates at the zero bound for close to 15 years, thanks to the first the Greenspan put, because Alan Greenspan liked to live in the limelight and be the accepted new cool kid on the block, to then have the Fed run by honestly committed, in my mind, communists, Ben Bernanke and Janet Yellen.
We're at the zero bound for all these years.
they're the ones that created this immense level of offshore credit leverage within the dollar markets.
And so Jay Powell has always been the guy at the Fed saying no to all of this.
And he's always been a kind of a hawk, hawkish figure.
He's always been part of that group that was a bunch of hawks.
And so when he became Federal Reserve Chair, he was very adamant that he wanted to normalize interest rates.
Now, the question is, when you think about it, so much of what the, what I like to call Davos is trying to accomplish can only be done with the extension of zero bound interest rates into perpetuity.
And And for Powell to aggressively raise interest rates the way he has is a very strong signal that he's not doing so to quote-unquote tame inflation, that that's the cover story from the Keynesian perspective.
We have to raise interest rates to tame inflation because the Keynesians only think of things from the We have a problem in that coming out of COVID, we were dealing with supply chain problems.
We were dealing with a cost-push inflationary model, which is that we had broken supply chains, and so there weren't enough goods getting to market, and prices were rising simply because people were willing to bid whatever they could get for.
They were willing to bid anything to get gasoline, food, this, that, and anything else.
And that's what was pushing inflation higher, along with all the CARES Act spending, which Powell sterilized starting in the middle of 2021 when he raised the reverse repo rate, payout rate by the Fed, five basis points above the Fed funds rate, which sucked $2 trillion into the reverse repo five basis points above the Fed funds rate, which sucked $2 So, and the people who've been screaming about this the most are over in Europe.
Okay, American banks haven't been screaming about it.
So it's clear to me that if the United States wanted to regain control over its monetary policy and wanted to push back against this push towards MMT, central bank digital currencies, and all the rest of it, Well, that would mean that the Fed doesn't need to exist anymore and that the commercial banking interests don't need to exist anymore because they want to do away with the two-tiered monetary system, which goes from that the central bank issues the currency to the commercial banks and the commercial banks then lend that out into the real world.
Well, what Davos wants to do is collapse that so that you deal directly with the central bank and we cut out the commercial banks.
Well, who does the Fed work for?
The Fed doesn't work for Klaus Schwab.
The Fed works for Jamie Dimon.
Yeah, it works for J.P. Morgan.
It works for whomever is the...
They work for the commercial banks.
And at the end of the day, that's who they're supposed to serve, along with the quote-unquote dual mandate from Congress for stable prices and full employment, which, by the way, are mutually exclusive mandates, which is part of the reason why the Fed has always been such a mess.
So, to me, it's very obvious that watching Powell do what he's been doing is going completely against the grain of what the globalist architecture, the globalist plan is, which is to collapse the old monetary system and default on all the pensions and then issue You know, perpetual debt and you put everybody on UBI, the vault on the pensions and all the rest of it.
Powell's saying, no, we're going to have the commercial banks still be at the center of capital formation in the West.
And we're not going to give up the dollar reserve currency, which would be the case if they say that the zero bound.
Sorry, go ahead.
No, I'm sorry to interrupt, but it seems like Powell is in a very delicate bind right here because, of course, the more he raises rates to fight the Davos crowd, the more precarious the debt holdings are of a lot of domestic banks, as we've already seen.
So how does he navigate that tightrope?
He does so by eventually stopping raising interest rates, right?
And we're not sure where that's going to be.
I think he may be.
I don't think he's quite done yet.
Yeah.
But what he really wants to do is shrink the Fed's balance sheet.
What he really wants to do is wring excessive leverage out of the system.
I've been saying that it's, you know, the talking point that I've kind of reduced this down to is the Fed's not trying to fight inflation by raising rates.
They're trying to kill the Eurodollar system, the offshore dollar system.
Not even that's not quite fair because it's really the leverage within the offshore dollar system.
He wants to get rid of the infinite leverage created by the zero balance.
Which is what happens when you go to zero.
Money is free so that you can lever up in the shadow banking system to infinity and therefore take away the Fed's ability to actually conduct monetary policy.
So how does he thread this?
He threads it by doing exactly what he's done so far and watch the fallout and shore up the commercial banking system here in the United States by setting up a virtuous cycle for the domestic banks To shore up their balance sheets.
And part of what the Bank Term Funding Program, which was announced during the blow up of Silicon Valley Bank, was to allow those, say, the regional banks that may have these big holes in their balance sheets when they had to put U.S. Treasuries on their balance sheets to offset their posits.
And they bought those things that say 1.5%, 2% on the 10-year.
It goes to 4%.
They're down 20%, 25%.
On their reserves are down that much, then what he's allowed them to do is to pledge those at part of the Fed And then go into the market and buy new ones at face value and fold a hole in their balance sheets.
Now who's hurt by this?
The ones who can't do that.
Exactly.
The European banks.
All right.
So Jay Powell, he drilled a giant hole in the side of the Titanic, but he has enough lifeboats for the domestic banks to keep them afloat.
Meanwhile, do you think his strategy is working in Europe?
How does the buyout of Credit Suisse fit into this?
Well, the buying out of Credit Suisse is different because, well, there's two reasons.
One, it's actually part of it because, to remind everybody, Credit Suisse is the primary dealer of U.S. Treasuries.
So in no way, manner, shape, or form was the Fed going to let a primary dealer go down.
Right.
Right.
So what happened with Credit Suisse is very, when you look at it, was to force the merger of Credit Suisse and UBS to As brokered by the Swiss National Bank, who technically, quote unquote, broke the law.
Yes.
Well, but did they?
Because there were covenants within those AT1 cocoa bonds that Credit Suisse had on their balance sheet that they could do that under extreme circumstances.
Okay.
So the idea that the Swiss National Bank broke the law, that within Swiss banking law, no, that was allowed.
In European banking, they wouldn't be able to do that.
So the AT1 cocoa bonds that exist within the European banking system Are under a different set of covenants.
So what they were able to do there is they write those AT1 bonds down to zero and stiff those bondholders.
Because here's the thing.
It was about $17 billion?
Is that what that was?
Yeah, it was $17 billion.
And think about this for just a second.
I want you to realize what was going on here.
Under normal circumstances, the bondholders would be in front of the shareholders in Credit Suisse.
So if Credit Suisse were to...
Think of it this way.
If you liquidate Credit Suisse, well, what happens?
The bondholders get paid out first, they get converted into equity, they become the owners of Credit Suisse.
If you drive the market cap, for example, of Credit Suisse down to $17 billion, when you convert the $17 billion in debt into equity, they are now 50% owners of the new company.
You had to double the number of shares that were out there.
So now whoever holds those bonds becomes the owners of Credit Suisse.
It also works as a reverse poison pill for anybody trying to buy Credit Suisse.
Interesting.
Because then, you know, on the day before Credit Suisse was, this deal was brokered, UBS's market cap was down to $56 billion.
So that $17 billion would have then represented like a 30% ownership stake in UBS. And they would have wound up, these same people would have wound up owning UBS, The new UBS Credit Suisse entity that was created.
So by writing those cocoa bonds down to zero, you bypass all of that.
UBS and Credit Suisse are still owned by their existing ownership, and the Swiss National Bank still has their transmission system for their monetary policy, and the Fed still is able to defend one of its primary dealers for U.S. Treasuries in the European market.
The kicker to this, as to why this fits into everything I've been saying, is because, as they complained about it, the European Central Bank and the European Banking Commission were not consulted in this deal whatsoever.
The Fed, Swiss National Bank, Credit Suisse, and UBS were involved, and I have it on not good authority, but I have my suspicions that the Bundesbank was involved as well, in Germany.
And the fact that none of these people talked to the EU about this, So then for...
That's fascinating, Tom.
So then for Powell to inflict as much pain on the Davos crowd here, if he can't raise rates, he could at least hold them where they are as long as possible.
And that seems to be consistent with their plan.
Go ahead.
Yeah, and then at the same time, allow, as Daniel D. Martino Booth keeps saying, let QT chunk away in the background, selling off U.S. Treasuries, selling off mortgage-backed securities wherever it's possible, and shrinking the balance sheet.
You shrink the balance sheet, you shrink...
The credit markets, you shrink the leverage out of the system.
And the Fed, you know, it's not going to be easy to get out of this.
It's clear this is what their plan is.
And I caution everybody when I talk about this to say that, look, I'm not saying that the Fed is doing anything here that they wouldn't do in order to survive themselves.
They are under existential threat.
Okay?
It's just that simple from outside forces.
Who clearly want to change over the way we handle capital and how we do capital formation.
Are we ideologically going to use commercial banking and private risk assessment to affect the formation of new capital?
Or are we going to put it in the hands of central planners and the central banks and thereby the central governments through central bank digital currency and all that that entails?
Well, that's the fundamental fight here.
And I think that it's very clear that Wall Street doesn't want to give up this power and they never have.
And they're going to fight the old colonial European powers who are broke.
So I'm getting a picture of two giant Godzillas fighting, and we the people, buildings are falling on us, and there's rubble smashing our cars, and we're trying to escape the Godzilla feet, the giant feet that are stomping around, because we're just trying to keep our small business going or whatever.
But there's definitely some fallout that's happening from this.
Sure.
Aren't we also seeing a lot of faith loss in the domestic banking system because the outflows out of the U.S. banks have been tremendous since SVB collapse, and even I think last week was $26 billion in outflows from the banks.
Now, maybe some of that went into Treasuries.
Sure.
Probably some did, yeah.
It did.
A lot of people are opening up Treasury Direct accounts.
Okay, yeah, makes sense.
I had Oakley on the podcast, on the Gold Coats and Guns podcast a few weeks ago, and he's like, yeah, I'm...
I'm in variable rate U.S. Treasuries.
I don't know when Powell's going to stop raising rates.
And I know a lot of people.
I've talked to a lot of people, and they're all doing the same thing.
But this is also part of the transition period.
This is what has to happen.
You have to create a virtuous cycle at this point for demand for U.S. Treasuries.
At the same time, the Europeans are desperate for collateral.
And the Fed has something they put in place in July of 2021 called FIMA, F-I-M-A. Which is basically a foreign repo facility.
Because the U.S. domestic banks will not accept European sovereign debt as repo collateral in the private transactions, the only recourse to get U.S. treasuries is to go to the Fed.
The Fed opened up this facility two years ago on purpose.
And interestingly enough, Martin Armstrong was talking about this.
He said, look, go look at what happened with FIMA during Silicon Valley Bank and Credit Suisse.
And certainly it was during Credit Suisse.
They tapped FIMA for $60 billion worth of U.S. Treasuries.
Previously, during COVID, I think it was $1.4 billion.
But really, FIMA didn't really come into existence in its current form until late July of 2021 at the July 28th, 2021 meeting.
So this is a big thing.
So a lot of the inversion we're seeing in the U.S. yield curve is coming from the European...
Central Bank and the European banking system buying U.S. Treasuries to get collateral to shore up the offshore dollar markets and their U.S. dollar liabilities.
And they're actually buying the stuff that the Chinese are selling and the Japanese have been selling and other central banks have been selling to defend their currencies as the dollar rises and as rates rise.
And it's very clear if you map the TIC report, The Treasury International Capital Report.
And you break it down by region in the world.
And I've done this.
I've broken it down by Eurozone, rest of the world, and Asia-Pacific.
And you can see it as clear as day.
Asia-Pacific has been selling, the Europeans have been buying, and the rest of the world is kind of neutral.
And so this was going on all throughout 2022 and up until the last...
And in Q4, there was just net buying in 2022.
Now, we don't have the latest numbers for Q1 Because the Treasury International Capital Report, the TIC report is three months in arrears.
So we won't see what happened in Silicon Valley Bank and around Credit Suisse in those numbers until like June.
Right, right.
So, but I suspect that when we get those numbers in June, it's going to bear out that the, you'll see like Bermuda and the Caymans and Belgium, which is where Euroclear is, and a variety of other, you know, Eurozone markers will show you know, Eurozone markers will show net buying of treasuries.
And that's part of the reason why the inversion on the U.S. yield curve has persisted.
And some of it is that there's a recession, you know, there's going to be a credit deflationary induced recession on the horizon as well.
I just don't think it's going to happen in 2023.
Oh, really?
I think it's going to happen in 2024.
Oh, really?
Okay.
All right.
Well, so many questions from that.
So let me ask you this.
Sure.
In addition to people taking deposits and putting them into treasuries, we've also seen – this is a crypto question – so we've also seen Bitcoin, I think, just hit 30,000 today.
Yeah.
So it's recovered quite a lot from where it was.
The theory is that some people are choosing to look at crypto more seriously now that there's been – a lot of the fallout, the FTX fallout has kind of – You know, burned out the underbrush of fraudsters and hucksters and whatever.
Not that they ever completely go away.
But what's your take on crypto right now as an alternative?
Are more people looking at it at the moment?
Or what do you think?
I just think that there's no liquidity in Bitcoin.
I think there are people...
I think that, you know, whatever net buying is, is there.
And there's just a directional trade because all the leverage...
From all of these Ponzi schemes that were, we call DeFi for three years, is gone.
The Fed blew up, Terra Luna, and you know, FTX, all of this stuff.
And so it's all gone.
And then if you look at, if you go look at a weekly chart of Bitcoin, and I'm not going to pull it up here, but you go look at a weekly chart of Bitcoin, there's about an eight or nine week period where Bitcoin didn't move.
Like, you know, it didn't move $1,000 a week.
And, you know, Bitcoin usually moves $5,000 to $6,000 low to high on a weekly basis.
So we were looking at Almost historic levels of a lack of volatility in Bitcoin.
The last time we saw anything like that was right before Bitcoin broke out in November of 2019.
In the six or eight weeks, maybe even 13 weeks, I think, if I remember correctly, Bitcoin was trading in a very tight band, $8,800.
And then, boom, it started to move.
And then once it closed above $14,000 on a quarterly closing basis, I told everybody to go along, and it shot up to $68,000.
And then on the way back down, once I saw this historic level of lack of volatility, then the question becomes at that point is, are we getting set up for the next Slammy?
Is the next big stablecoin going to get blown up by the Fed?
Or have we rung out all of the leverage within the crypto markets or the Bitcoin market to be explicit?
I also talked to some people who were much closer to That watched the on-chain statistics in Bitcoin carefully.
And they all pointed the same thing, which is that a lot of Bitcoins were taken off the exchanges and put into cold storage.
So that means there's no liquidity.
Therefore, if there's no liquidity, there's no leverage within the futures markets.
And so any buying whatsoever under those circumstances is going to see the thing pop.
And that's in many ways what we've seen.
And then it ran right up to $28,000, which was technically...
There's some overhead resistance at 28 grand, and then we've moved back into the 30s, which is actually really quite impressive as well.
So I just don't know that it's much more than that, which is also good because now we're getting back into real price discovery in Bitcoin.
Well, exactly.
But my follow-up question there is, so getting to the Fed and Jay Powell, so he's at war with the Davos crowd, as you mentioned, but then it seems like the Fed also is at war with domestic crypto that they don't control.
I mean, would you agree or disagree with that statement?
Because the Fed now, interim system, and so on, doesn't the Fed ultimately want to control digital currency in the United States?
Well, what they want and what they need is a better back-end than they currently have.
For payment layers and interbank payments.
And that's what Fed now really is.
I don't know that the Fed is really hostile to Bitcoin.
Okay?
Powell's made it abundantly clear that he hates stablecoins.
Right.
Stablecoins to him are just synthetic dollars, which they're basically just Eurodollars.
And he's at war with...
And then they're easily leveraged Eurodollars against magic beans.
Not even against, you know, freaking Euros or British Pound.
Right.
No, like Tether.
They're just literal Eurodollars...
You know, created and collateralized by magic beans.
This is just, this is insane.
That all needs to go away.
But as far as Bitcoin's concerned, the Fed, for the most part, has been very clear they consider it a commodity.
So very similar to gold.
They don't like the idea of Bitcoin and gold, you know, making their dollar look bad.
But I think at a certain point, the Fed has to choose, you know, like the ECB has to choose.
And I'll explain what I mean by this in a minute.
I've been saying for a long time now that Christine Lagarde is trying to maintain credit spreads between European Like between German and Italian debt and between German and U.S. debt.
And she can defend those credit spreads in order to keep interest rate swap arrangements and carry trades and all the rest of it from blowing up on her and then blowing up her banking system.
Well, she can choose between maintaining credit spreads or she can defend the euro, but she can't do both at the same time.
Because in order to defend credit spreads, you've got to sell the euro.
And if you want to defend the euro, then you've got to let the credit spreads go.
And if you watch U.S.-German credit spreads, they have tightened dramatically over the last...
So, by the same token, if the Fed wants to shore up the American banking system and wring out some of this excessive leverage, they're gonna have to allow people to escape and they can't really defend the gold price the way they have in the past.
The dollar versus gold and the dollar versus Bitcoin in the past.
They're gonna have to let those go as well.
Same kind of problem that the Fed is running into, which is why I don't see the Fed really upset with the gold at $2,000 in the cash market.
Silver back at 25.
Not that I really think that silver is much of a monetary metal at this point.
But the same thing, I don't think they really care about Bitcoin too much.
As long as there's no excessive leverage building within the crypto market, certainly within the Bitcoin market, I don't think they care.
And to be honest with you, there's so much leverage that's been taken out of the gold markets as well.
Like, you know, the amount of paper gold trading on the COMEX and the LBMA, much, much lower than it was even two or three years ago.
So, you know, I At the end of the day, I think that there's a lot of, you know, there's trade-offs for everybody.
And if they want to defend one thing, they're going to have to let something else go.
And so the years of being able to manipulate all the prices all the time goes away at 5% interest rates as opposed to 0%.
Good point.
Yeah, that's a really great way to describe it.
Now, you mentioned Christine Lagarde of the ECB, and I'm sure you saw this video where she thought she was talking to Zelensky.
It was a fake Zelensky interview, which was really hilarious because I thought the real Zelensky was also a fake Zelensky, but whatever.
It's like fake clown Zelensky time.
But she admitted in that interview that they wanted to use the digital currency, the digital euro, to control people.
And she expressed fear that they might not have enough control over smaller transactions.
I think she said 300, 400 euros.
But anything over that, definitely they would exert control over people.
This is a fairly frank admission, but it shows that the whole model of the socialist system in Europe is one of totalitarian control over your finances, doesn't it?
Absolutely.
They absolutely want to do away with the classic supply and demand elasticity curve.
They just want to flatten it and tell you what the demand for these things will be and what the demand for those things will be and what the prices will be.
Lagarde is a totalitarian.
She was put in power.
To do what she's doing.
She's made it abundantly clear that she hates Bitcoin, specifically.
Doesn't really have much of a problem with stablecoins.
What a shock.
But she hates Bitcoin because Bitcoin represents an escape hatch.
And she said this explicitly.
Bitcoin is an escape hatch.
And if there's an escape hatch, then people will use it.
And we need to have control over these things.
Because their plan, Mike, especially if you go back to Credit Suisse.
And I read an article about this over at the blog.
Trying to explain what was happening with Credit Suisse.
And I came to the realization that the whole AT1 cocoa bond market was a means by which Davos was going to take control of the entire commercial banking system in Europe through these bonds by once there's a full-on banking crisis and all the market caps of all the European banks get halved or are dropped by 75, 80%.
The value, relatively speaking, of all those $275 billion in cocoa bonds, now, relative to, say, today's valuations, would rise in value to a trillion dollars or a trillion and a half.
And all of a sudden, again, like I explained with Credit Suisse and UBS, they become the owners of these banks.
Now, once they've got control of those banks and sold effectively as owners, now you can roll up these central banks because now the central banks...
And the member central banks, and they own the commercial banks, now they can turn the member central banks into adjuncts of the ECB. And they can roll the whole thing up into one big mess underneath where the member central banks, like in Germany and France and the rest of them, they become the new commercial banks.
The old commercial banks are gone.
They become the new commercial banks.
They deal directly with the ECB, with the digital euro.
They default on all the debt, right?
Because remember, these AT1 bonds are perpetual bonds.
Okay, so where have you heard the term perpetual bonds before, except for George Soros, who has been screaming for years that the way out for Europe is to issue perpetual bonds, is to default on all the debt and issue perpetual bonds to the current bondholders.
And then So effectively saying you're not going to get your capital back, but we're going to pay you in perpetuity.
So that's what these AT1 bonds are, except they're conditionally convertible into equity.
It's like a Trojan horse into the Great Reset.
Right.
It's absolutely what it is.
And then ultimately, then all of this stuff happens.
And then once the commercial bank, they own the commercial banks, then they can turn to the central banks and go, okay, now we're going to...
Default on all the national central debt and issue perpetual debt through the Bundesbank and all the rest of them.
This is fascinating because you're describing the pathway to a global one-world currency that eventually becomes a digital one-world currency, or at least that's their attempt.
That's their attempt, yeah.
Yeah, that's their attempt.
And they want that for the United States, and the Fed is saying no.
Exactly, right.
This is really critical.
But what about the BIS and how they want to position themselves, I believe, as the kind of middleman between the digital currencies of different countries?
Isn't the BIS actually where the one world currency wants to be kind of controlled?
They want to go between them and the IMF, sure.
Then they want to transfer all of that away from...
from the ECB, the Fed, the PBOC, and all the rest of them, and they just transfer it all up to the IMF and the BIS. - Yeah, they don't want the Fed to exist at all. - It's been banging on this point for years that that was always the point.
Now, here's the problem.
The problem is that everybody east of the International North-South Transport Corridor is not on board with this.
The Russians, the Chinese, the Iranians, the Indians, now the Saudi Arabians, even though they're west.
They're not on board with this.
70% of the world's population is governed by people who don't want to be involved in this.
ASEAN just came out the other day and said, we're going to start moving all of our trade settlement into Chinese yuan.
By the way, the Chinese yuan, I've been studying this for about 12 years now, the PBOC, the People's Bank of China, does not target the U.S. dollar Onshore yuan exchange rate.
That is not how they manage the yuan.
They manage it through the rear, the real effective exchange rate of the yuan versus all of their trading partners.
They've been doing this for years, so they care as much about the dollar as the Singapore dollar, the Malaysian ringgit, the Thai baht, the Australian dollar, the Vietnamese dong, all of them.
That's what they care about.
And they're managing the currency versus that.
But we always focus on things in terms of dollars.
We don't understand any of this stuff.
So understanding that they've been targeting all this and working from that perspective for years.
So this is all in play here.
It's all already happening.
And there's not much Davos can do about it other than bomb them back to the Stone Age using the US military.
Which is running out of munitions in the meantime, right?
Well, you know, I'm not even going to say one way or the other whether we have the ability to or to not fight this war that they clearly want to have for us.
I don't know, okay?
And I'm not cucking out here.
What I'm saying is don't believe everything you hear because so much of everything we hear is disinformation.
That may be correct, okay?
It may not be, okay?
How much of that is real and how much of it is planted?
I don't know.
What I know is that they're planning on doing this and they're planning on trying to take us to war by the end of the year, I think.
And what I see, they're planning on it.
Now, whether they're doing that in order to...
There's a number of ways you can look at why they would be doing this.
If Davos is trying to destroy the United States, what better way to do so than to get us involved in a war with Russia and China and lose?
Right, exactly.
So there's a number of different ways this could be looked at as to why they're doing what they're doing.
But don't discount any of what's actually happening.
They think they can win.
They think they could not win.
I don't know.
What I know is that...
Everybody is making these moves as if they have a winning move in the future.
And that when you look at their whiteboard of their flowchart of how this plays out, of what moves they're going to make and when, they still believe that winning is at the bottom of the whiteboard.
And that should scare you because that's the way they're acting.
Okay, so on your whiteboard then, do you think the ECB survives this?
That's a good question.
I don't.
In my heart of hearts, I hope it doesn't.
If I take these off and I put on my rose-colored glasses, my anti-communist glasses, I go, please no, these people are the problem.
And the Russians and the Chinese and the Iranians, we can negotiate a way out of this with these people.
But the old colonialist powers in Europe, there ain't no negotiating with these people.
And we've already had two world wars because of them.
And we have a thousand years of European history of them fighting wars amongst themselves for roughly the same reasons.
And they've been undermining US foreign policy and US domestic policy through the ownership of the US banking system for most of America's history.
And we're now in the weird transition period where we, for the first time in American history...
Have control over our debt indexing rate, over the price of our own currency in foreign exchange markets, i.e.
SOFR versus LIBOR. Right.
And that transition is kicking in when?
June 30th, LIBOR goes away, and SOFR, and everything that's not currently been rewritten to be in any contracts or debt or whatever that hasn't been explicitly rewritten by the lawyers to get all this stuff done from LIBOR to SOFR, The transition, there's a whole roadmap of how they're going to deal with that.
I've seen the documents and I've seen the roadmap and how they'll deal with this.
It's going to be an exciting summer, that's for sure.
Oh, absolutely.
Okay, so last question for you then, and then I want to give you a chance to plug your newsletter and anything else you want to mention.
So for someone who doesn't follow this data like you do, this is a lot to take in.
And I think a typical viewer may be just trying to ask the question, so how do I navigate this and not lose everything?
It's kind of the number one question.
Do you have any words of wisdom for that?
It's actually really quite simple.
We don't call it gold goats and guns for nothing.
I want to get like flip about it.
It's pretty obvious.
It's tangible assets.
Martin Armstrong has been banging issue on the table at Khrushchev for the last 10 years that we're moving into a period of tangible assets are going to rule versus ephemeral assets or intangible assets.
Debt has ruled the world for the last however long you want to call the cycle since Nixon closed the gold window in 71.
Well, the remodetization effect of everybody moving the ground, what you're seeing in gold, Bitcoin, U.S. Treasuries, the Dow versus other stock markets and whatnot, you're seeing just people moving into tangible assets, okay?
So what should you be doing?
Well, you should be shoring up your personal balance sheet.
What's the Fed trying to do?
Shrink its balance sheet of all this toxic overvalued debt that it can't sell because it can't sell it at par without booking a loss, but it can roll it off its balance sheet And just not, you know, and just not roll it over.
And then let it, you know, sunset.
And then the money, of course, that was backed by it, sunsets as well.
So it's the same thing here.
Get out of debt, if you can.
Shore up your skill set so that you don't lose your job.
Right?
If you have excess capital, you're looking at putting your Right.
Right.
think the euro is going to 60 cents, I wouldn't keep very many of them.
So you want to be in gold, Bitcoin, in your local currency, in just enough local currency, and held somewhat outside the banking system in order for you to function.
Yeah.
But if you're worried about, you know, the kind of, you're worried about them canceling the currency and then forcing you to bring your stuff in, like, you know, bring them in and change them out, well, got news for you.
I got Bitcoin, I got gold.
I got these things.
I got to convert them into those things.
The other things I need first and then I can convert into the new currency.
You win for the most part.
They're not going to let you out of the system without making you take a haircut.
They're not going to try and tax you into debt slavery.
They're going to do all of this stuff.
And what you have to do is minimize your counterparty risk.
Because it's counterparty risk that everybody is facing the other guy not being able to pay.
And so just minimize your counterparty risk as best as possible.
Shore up your local community as best you can.
Shore up your skill set as best you can.
And protect yourself.
Right now, you should be worried about...
And that's what we're seeing in the banking system.
People are worried.
I get patrons asking me all the time, what bank should I move my money out of because I'm worried my bank is going to fail?
Well, I don't know.
I don't actually honestly believe your bank is going to fail here in the United States.
I think some of the banks are going to fail.
I think we're overbanked in the United States.
But I don't know without looking at the Texas ratio of a particular bank.
And...
It's time to do the due diligence and shore yourself up.
Yeah, and gold, goats, and guns all have no counterparty risk.
That's a good rule of thumb.
Okay, your newsletter, how often do you put the newsletter out?
The newsletter out is a monthly retail investor-focused newsletter.
It has a portfolio, which has done very well over the years, and it's built around the ideas of these things, income, industry, defense, gold, goats, and guns.
And we put that out once a month.
It's all original material.
My partner, Dexter White, writes one article.
I write the rest of it.
And we try and, you know, thematically push us forward in time is what we're going to see.
The Patreon, I take care of my patrons anywhere from three to five times a week with private blog posts, private podcasts, market reports, bespoke chart reads on people.
I'm, you know, fairly accomplished technical analyst as well.
So You know, and we just do the thing.
And then we have a very active community that we all talk amongst ourselves with.
Okay, and I see it's, like, ridiculously affordable.
If they go to your website, tomluongo.me, click on the newsletter.
You can select a membership level here, and it's just a few dollars.
It's crazy.
Yeah, well, you know, the prices were set when nobody knew who the hell I was.
What was I going to do?
Charge them premium money for something else?
And we're at the point now where it's just fine.
The goal here is not...
Making money is a consequence of doing good work, right?
I've always believed it.
And if you do good work, people will reward you.
And the crowdfunding model is very real.
And I firmly believe in it.
And we're very thankful every day for our patrons because I learn more from them than I learn from my own research.
Because you have a...
And an energized and inspired community that you riff off of every day.
And it's a pleasure to go to work, which for me is that I wake up in my pajamas in the morning, I pull up a cup of coffee, and I sit in front of the computer, and I go, and they bring me the world.
They're phenomenal.
I can't say enough about them.
Well, that's wonderful.
You have an amazing community, and you have an amazing grasp, too, I think, of what's going on globally.
I really encourage people to tune in to your message.
And I want to thank you for taking the time to join us today, Tom.
It's always a pleasure to speak with you.
Thank you, Mike.
As always, it was great.
Thank you very much.
Thank you, and take care.
And as always, for those of you watching, you may repost this interview anywhere you'd like.
Go ahead and do so.
Just give a link to tomluongo.me.
And thank you for watching today.
I'm Mike Adams, the founder of brighttown.com, the free speech platform that you're also free to use.
So thanks for watching.
Everybody, get prepared.
Take care.
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