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June 13, 2025 - Ron Paul Liberty Report
32:05
Into the Abyss: Surviving the Post-Bubble World -- Interview with Graham Summers

In this powerful conversation, we sit down with author and financial strategist Graham Summers to discuss his new book, Into the Abyss: Life After the Bubble. With markets stretched to the brink and economic uncertainty looming, Summers offers a sobering but necessary look at what comes next.

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Ripples in the Financial System 00:06:24
Hello, everybody, and thank you for tuning in to the Liberty Report.
With us today, we have a special guest.
Many people will know his name, but many more will recognize the title of a book he wrote a few years ago, and he's still writing books, and that's Graham Summers.
He's been involved in the financial business and understanding.
He has great knowledge about the Federal Reserve, and I think he probably has no more desire to promote the Federal Reserve than I do.
So, we'll be talking about all those things.
But, Graham, welcome to the program.
Glad you're with us.
Oh, it's a pleasure to be here.
Thank you, Dr. Paul.
Very good.
You know, I mentioned already the everything bubble.
That was in 2017, and it's an easy title.
I thought it was really great.
And now you have a new book coming out, Into the Abyss.
So, in a way, you're going to be talking about the mess we have created by excessive government, excessive monetary policy, and all those creatures that we have to deal with.
So, why don't you tell our audience a little bit about your book, Into the Abyss?
Oh, absolutely.
So, the idea of Into the Abyss is it's the sequel to the Everything Bubble.
The Everything Bubble is a term I coined back in 2014.
The idea was that if the government prints so much debt and that debt is the senior most asset in our financial system, then technically, if that debt goes into a bubble, then everything will become a bubble because the yields on that debt represent the risk-free rate of return against which every asset, whether it's stocks, real estate, oil, you name it, are priced.
So, if those bonds are in a bubble, which they were following the great financial crisis, and they still are to this day, then technically, kind of everything's in a bubble because the baseline or the foundation of the financial system has a skewed sort of risk perspective.
It's not a real sense of risk, it's an artificial sense of risk.
And a lot of people were asking me when I published that book in 2017, well, what's to come?
How do we know when this thing bursts?
And at the time, I said, Well, I don't really know because it could be another great financial crisis type situation, or maybe the Federal Reserve or policymakers choose to sort of just print money and try to inflate the debts away.
And then, when COVID hit and they shut down the economy, and collectively the Fed and the federal government pumped about $11 trillion into the financial system in the span of about 20 months, it became very clear.
You know, the way I think of it is normally during a crisis, you'll get maybe a page or two of the playbook from policymakers.
But because COVID was such a rapid, such a violent situation, you know, we shut down the economy and the entire financial system was melting down in the span of about six weeks, it forced policymakers to reveal their entire playbook for how they really think about things.
And what it told us was that at the end of the day, the only real solution they have to anything is to print money and either funnel it into the financial system or use it to buy different assets, trying to sort of put a floor under those assets so they won't continue to fall.
And that's why I titled the second book, Into the Abyss, because the idea is we sort of plunged into the abyss.
We crossed the Rubicon, we went into this completely insane realm that we actually are still in to this day, although people have sort of just moved on from it.
You know, I find it always interesting when I meet people like yourself who is very much engaged in finances or economic policy or academics when it comes to money issues.
But I'm always anxious to know when that individual had the enlightenment.
Was it when he was 12 years old or when he went to college or just what?
Just how long has it been with you that you knew this was a big deal, the money issue?
Sure.
So I started out as an analyst at a research firm in Baltimore, Maryland.
I worked there about five years.
And at that time, I was primarily engaged in just stock market analysis, you know, which companies are going to go up, which companies are going to go down, why?
And there was, of course, a component of the economy and economics in that.
But we didn't really get into sort of the big picture understanding of the financial system so much.
And I left that company to start my own company in 2008, which looking back was not the best time to do that.
But once I was out on my own and I was having to sort of manage all of my new firm strategy, I suddenly had to have a much bigger picture perspective on things.
And it was an interesting time because I was out on my own.
I was running my own firm.
I was managing my own clients' accounts.
And it was very clear to me that something was very much amiss.
We were starting to see sort of ripples in the financial system.
But if you'll recall, at the time, all the CEOs for the large Wall Street firms were out saying our balance sheets are rock solid.
There's no real concern.
Subprime is contained, is the famous line Ben Bernanke, the then Fed chairman, made.
And so that was really a trial by fire for me where I really grew into a much better understanding of these sort of critical issues.
And what really concerned me at the time was the derivatives market.
So I actually, in April of 2008, was telling clients openly, I believe a crisis is coming.
I believe we're going to have a crash.
And that ended up being what made my name for myself because I was going up against a lot of much more famous, much more renowned people who were saying, no, everything's fine.
You know, yes, Bear Stearns failed, but everything's going to be okay.
And then AIG failed.
You know, Fannie and Freddie had to be partially nationalized.
And then Lehman Brothers failed, and everything just, you know, came undone.
And so that was really for me the experience that changed everything was starting to run my own firm, no longer being an analyst, but actually being a chief market strategist, having to have my head wrapped around everything.
And when the great financial crisis hit, it readily became apparent that was the first sort of systemic or taste of systemic fear we'd had in decades.
And that really shaped my understanding of things and how to sort of manage people going forward.
You know, you may have come across the information that way back in my younger days, I ran for president.
Cuts and Foreign Aid Efficiency 00:12:27
You know, I did that a couple times.
You know, 07, 08, there was a lot of talk about what was coming, and I had my opportunity to give them my two cents worth.
But I remember one time the people who were organizing and somebody had announced what we were going to talk about on this occasion and what we were going to talk about next time.
They say, you know, tonight we're going to deal with foreign policy.
This is where the quiz is, what's your foreign policy is all about, which implied in what they indicated with other nights, it'll be economic policy.
Now, the one thing frustrating to me is, can you really talk about economic policy without paying a little bit of attention to the foreign policy?
No.
No, especially not since the Gulf War and since we've, I mean, we spent $6 trillion in that war, right?
That's a big reason why we have so much debt.
Yes, and that is always a problem.
And right now, debt is the problem.
Now, Musk made a real effort.
And there were times when I heard Trump making an effort.
But it doesn't seem like we're getting very far on this.
Tell me what you think is going to be like in a year.
I know, not to make a prediction, but do you think the spending is going to be cut?
Do you think we'll ever see any significant cuts?
We hear about it, but sometimes their numbers aren't, they're fictitious.
They increase something by 20 billion, and then they cut two out, and they say, oh, we just got $2 billion, and we saved that money.
So it's really hard to understand what they're doing because the rhetoric is much designed to distort and deceive the people.
No, that's exactly correct.
So when the Trump administration came in for their second term, I think I, myself, and a lot of people were feeling pretty positive about things because they were saying all the right things.
President Trump very clearly had, given the trials and tribulations he'd suffered on the campaign trail, had really just decided he didn't care what people think of what he wants to do from a political perspective.
And then he brought in Elon Musk, who's an individual who probably cares even less what people think of him.
And they were talking about balancing the budget and they were talking about reducing spending.
They were going to cut spending by a trillion dollars, so on and so forth.
That was very exciting to me because it was the sort of things people like yourself and myself have been wanting to see for years.
And then it kind of started to go off the rails.
Every single time Doge, the Department of Government Efficiency, would sort of implement large-scale cuts, some judge would appear and freeze it and stop it.
And we started to see sort of lawfare kind of eating away at that progress they were making.
And that was a little disheartening, but it still seemed as though Musk was a true believer and it still seemed like Doge was going to make a difference.
And then the trade war was announced on April 2nd with the sort of Liberation Day.
And we had a very interesting thing where the financial system just revolted.
We had one of the worst, most rapid declines in stocks in the last 75 years.
We erased, I believe, it was $11 trillion in wealth in the span of about two weeks' time.
And the bond market began to revolt.
You know, the bond market began to sort of react poorly to what was happening from a trade perspective.
And that was actually, not many people know this, but between April 8th and April 9th, that overnight bond market session, the bond market started to react very badly.
And that was actually what precipitated Donald Trump coming out the next day on Truth Social and announcing that he was going to do a 90-day pause on the tariffs.
And that was actually what settled everything and allowed the stock market to start climbing again.
And so whatever President Trump really thinks about this or Elon Musk, you know, at the end of the day, the bond market sort of intervened and forced their hand.
And unfortunately, by the look of things, it's taken us back to exactly where things were before the election, which is just spending out of control, deficits equal to 6% or now 4% of GDP.
The big, beautiful bill, which is going through Congress, which there's some good things in it, but it's going to increase the deficit.
It's going to increase debt.
I mean, it's really become a situation where I don't, I'm in the same camp as you.
I don't think that there really is the wherewithal from anybody in Washington to reach a consensus on cutting spending.
I think people are more than happy to pay lip service to it, but I don't think people have the actual fortitude to make it happen.
Right.
You know, I often use the term that markets really are powerful.
And I think you indicated there that they can make all these plans and schedules, but then they have to adjust because something happened in the bond market.
And so we have a terribly regulated system, but the whole thing is the regulators don't know any better.
A lot of people would ask me, what would you do with interest rates if somebody puts you in charge of the Federal Reserve?
I said, I'd resign.
I said, I don't know what the interest rate should be.
And they don't even know either.
This is this argument between Trump and Powell.
I find it rather silly, but dangerous, you know, because nobody, neither one of them really understand, you know, how it works.
So markets are very powerful.
What happened just this last 24, 48 hours with what's going on overseas?
You know, interest rates are all over the place, but gold soaring and oil.
I've been sort of keeping an eye on oil for a couple months.
I wondered why I was down the $50 because I got involved in education from the Austrian school back in the 50s and 60s.
And then in the 70s is when I got a little more active.
And the 70s, all I remember is to me the biggest day that I witnessed personally, because I was sitting and watching television when Richard Nixon announced the closing of the gold standard.
And I said to myself, inflation is coming.
And here, just look at what's happening here recently.
So the inflation did come, but it is something that, you know, the people don't want to give it up.
The incentive.
Leonard Reed was a favorite of mine from the Foundation of Economic Education.
He said something once to me.
He said, oh, all these people who talk to you and say that they're with us, he said, but he says, no, they say, do this, this, and this.
But every one of them had a but.
And that's that's the way I saw that so often.
We heard so much talk here in the last year.
And some of it I think was beneficial.
This exposure of what we found out about USAID, I think that's good information, but it hasn't resulted in a dramatic change in habits.
No, I would agree with you on that.
I think the greatest thing that Doge has accomplished was sort of revealing just the abject fraud, waste, and abuse.
I think I forget who it was, but someone announced earlier this week they found out that only about 12 cents of every dollar in aid was actually going to help people and the rest was just being used to pay salaries and sort of fly people around and that kind of thing.
And Doge was very useful for revealing just how wasteful this stuff is.
But ultimately, from a math perspective, it's not that significant.
Even if you take Doge at its word that they've cut $150 billion in spending, well, I mean, the U.S. spends almost $7 trillion a year.
So it's really a drop in the bucket.
And that's not to sort of poo-poo it or put it down.
I think what they're attempting to do is admirable, but it's just they're not really going to put much of a dent in anything unless you're doing much larger cuts.
But the problem with that is that if you start doing much, much larger cuts, you're going to have an impact on the economy because the economy is now just so addicted to government spending.
A big reason why Biden was able to get us through four years without a recession was because they were just spending just obscene amounts of money, and the economy continues to grow with all that money being pumped into it.
And I'm with you on everything.
I wish to goodness that they'd actually do some serious cuts, that they'd actually reduce the size of the government, that they'd get rid of some of this waste.
But this big, beautiful bill has made it very clear it's unlikely.
Well, you know, the eight to ten years, the decade following the closing of the gold wind, which was 1971, there were two things.
The Arab nations, Saudi Arabia, you know, rigged the prices and they did run up the prices and it was big.
Oil not too long before that was two and three dollars.
And, you know, it soared.
And that, of course, affected the whole system.
So it was oil going up and gold going up.
But, you know, lately, oil has not been going up until suddenly oil is going up.
And for various reasons, like back to foreign policy.
It's the foreign policy that we can't duck all responsibilities of us participating in what's going around in the world by saying, well, we don't send the troops in to do this.
We just help them along.
But I think that obligation that we have to make the world safe for democracy has been a long time lost.
And it sounds like a good slogan, but I think it leads the American people into thinking that this is a moral obligation on our part that we have this responsibility and we as individuals do to help people, but we don't have the responsibility to get into all these international organizations and this globalist approach.
And then we come along with, oh, the solution is, why don't we just really reignite the wonderful thing about tariffs?
That ought to solve our problems.
So I'm sure you have a couple words to say about tariffs.
Well, the tariff situation is a strange one because, you know, a tariff is essentially a focused tax on something.
And the Trump administration has done a decent job of presenting this idea in a way that doesn't necessarily completely match up with the reality.
I mean, at the end of the day, when he's saying that China is going to pay the tariffs, that's factually incorrect.
You know, what happens is China makes something, that thing is shipped over to the United States.
So let's say it's a coffee machine for, say, I don't know, $20.
So China makes a coffee machine, it's shipped over to our country, and let's say there's a 10% tariff.
Well, the organization that pays that $2, that 10% of that $20, is going to be Walmart or the importer.
It's not China.
The goal of tariffs is ultimately to, I think, to get onshoring, to get importers to choose to do more work with domestic manufacturing and to get companies to onshore factories and industrial capacity.
But the idea that somehow you're going to produce a huge amount of money from this is not, the math isn't there either.
They brought in, I think, $22 billion in May, which was supposed to be a tremendous success.
But again, that same month, our deficit was something like $200 billion.
So it's, you know, they're doing admirable things.
And in some ways, you know, I'm trying to, in my mind, I think we'll give them time.
They've only been in office three, four months.
You know, let's see how this plays out.
But thus far, the math isn't really putting much of a dent in things.
I mean, it's good for talking points, but mathematically, it's not really significant.
Yes.
You know, the idea of trying to understand what they're doing and who's telling the truth, that is a big problem because there's a lot of demagogues that pass out all this false information.
And one approach that I had was I thought we needed more exposure like we got on, well, we've got it to a degree on COVID.
Why Bitcoin Resists Devaluation 00:06:57
We finally learned more about that.
But USAID, that's an exposure.
But we don't get it anyplace else.
Right now, there's an argument again, of course, I emphasize it, just knowing what the Fed's doing, because I think that would enlighten.
They say, why do you concentrate on that?
Why don't you just say, you know, get rid of it if it's not doing its trick?
Well, that's a bigger job than exposing it.
And then when the people knew or get to know what the Fed's doing, maybe they would come up with that idea.
And how about right now there's an effort growing, which I think is just great.
And that is, do we really own the gold?
What is all this talk about Fort Knox?
And I tried when we had the gold commission to get people to, we had a commission of, I think it was 17 people, and 15 of them voted not to audit the gold.
And there were two of us that said, we ought to at least count it, find out.
But now there's a lot of people that are knowledgeable and have studied this.
They say, you know, nobody knows who owns that gold and how many times the transactions occur.
So that makes it more difficult.
So once again, I would think that we have to go to the market because one of the best things that's happened as far as the gold and precious metals goes is the re-legalization of gold in 1975.
After 42 years, we weren't even allowed as Americans to own gold.
So this becomes a market.
So there is a market number.
But like what did Roosevelt do?
First thing he did was close that market down and not be embarrassed by that.
So I think exposure is what we need.
And I think that's why a lot of people like what you do.
You expose what is coming and what's going on and try to understand it because you have a precise reason for that because you're dealing with investments and protection.
But they have to be educated as to why certain things should be done and why you should anticipate and not believe all the innuendos and the distortions we hear from the government.
No, that's exactly right.
And, you know, the reality is a lot of this stuff is really kind of kept quiet or not really talked about.
Like, for instance, if you talk to most people about what's a great investment long term, they always say, well, stocks, stocks are where you should put your money.
But the reality is, if you compare the performance of the SP 500 to the performance of gold since 1967, gold's actually outperformed stocks almost the entire time.
And not many people know that.
And why am I picking 1967, 1968?
Well, that's because up until that point, gold was completely pegged to currencies.
But in 1967, France severed its ties from the gold standard.
And gradually other countries did too, culminating in the United States in 1971, as you noted.
And at that point, gold became a free-floating asset.
But up until that point, it was pegged.
It couldn't really rally.
And what's interesting is gold has actually done better than stocks as a whole.
Now, there are individual companies that have done fantastically well that have produced tremendous returns above that of gold.
But the SP 500 as a whole hasn't.
And another thing that I actually was looking into the other day that was very interesting to me was that since 2008, which I think was a very sort of critical year for our financial system, that was the year where the great financial crisis unfolded and policymakers decided, you know, the way we're going to deal with this is we're going to prop up the too big to fail financial institutions.
We're not going to let debts clear.
We're going to create another bubble, this time in bonds.
Well, since that year, the U.S. dollar has lost 34% of its purchasing power.
And that made me start thinking, well, how much of the return from the stock market since 2008?
Everyone says, oh, stocks are up, you know, 400 or 500% since 2008.
Well, how much of that is actually real wealth creation?
And how much is simply because stocks are denominated in U.S. dollars, which have lost so much purchasing power during that time?
And if you actually price the stock market in gold, it's really gone nowhere for over a decade.
Now, I'm not saying that stocks should be priced in gold necessarily, but the point is if you're denominating stocks in the dollar and the dollar is losing purchasing power every year, then it makes you wonder, well, how much of this is real growth and how much of this is just the denominator shrinking all the time.
You know, A lot of people see you, and I do as well, that you have a good understanding of bubbles and how they occur, and there's malinvestment, and the market demands that they be corrected.
You know, they said, who caused the collapse?
And they're looking for one incident.
But the cause of the collapse, of course, was the mismanagement of the monetary system.
But I keep thinking about it, and I would claim that I don't have the full understanding of this, but I think about the cryptos and whether they participate in the bubble.
Bitcoin, you know, has gained a lot from its beginning.
And people go back and forth on it.
And you read about it in ordinary financial papers.
And that is, is it acting like a stock?
Or is it more like a bond?
Is it going to respond to that?
Or is it like a currency?
To me, the question is: is there a lot of price increases with crypto as a participant in the bubble?
Or is it truly the answer to protecting against it like gold might be?
I think crypto is a little bit of both.
I think if you're talking about Bitcoin, which is there's a limited amount of it, you know, they can't just print more of it overnight, then there's definitely an argument to be made that it's similar to gold or it's similar to an asset that can't be rapidly devalued.
But some of the other cryptocurrencies where you've got these people that just invent something and then they can issue it at will, I mean, and there's nothing backing it.
That's something else entirely.
So when you talk about crypto, it's sort of critical to note which specific coin you're describing.
Bitcoin has become kind of, in fact, the Trump administration refers to it almost as digital gold.
David Sachs, who's the crypto star for the government, has called it crypto has called it digital gold in the sense that it's got a finite supply.
It has to be produced.
It can't just be printed or created overnight.
So crypto, in some ways, for some people, is going to offer some decent value, but in other ways, some of these other coins are just, I don't want to call them scams, but they're potentially very dangerous.
Taxing Personal Property 00:05:07
You could buy something and then the person behind it could create a whole bunch more of it and devalue it overnight and you lose tremendous amounts of wealth very rapidly that way.
You know, there's one argument that floats around and used by various people who have an agenda, and that is they don't want to vote for a tax cut because if you do, you know, the people are going to have more money.
And that means it'll be inflationary.
And they argue that that is the case.
Your deficits are going to go up, which is true, which might put some pressure on the Fed, you know, if the debt goes up.
But I think that's a fallacy because the real problem is you should, from a libertarian viewpoint, we always want to cut taxes to the size of government.
So what we need to do is say that the problem is spending, the special interests, you know, the military-industrial complex, the pharmaceutical industry, and all the corruption that goes on and all the waste and stuff that we see.
That's where the problem is.
Oh, no, it's because you're going to give a tax cut out there.
So some people, I think less so now than they used to would buy into that.
Oh, I have to be against a tax cut because there's half a truth there.
But the truth is, it's a spending problem.
That's exactly right.
And in every situation like that, it's always a relative explanation.
The question is: well, who deserves to have that money?
If you earned it, should you keep it or should the government take more of it away?
And our tax system, you're taxed on everything.
You're taxed on things you own, with personal property.
You're taxed on your income with income tax.
You're taxed when you buy things with sales tax.
I mean, we have got plenty of taxes, and that still doesn't like reduce, you know, we still are running a deficit.
We've run a deficit almost every year for the last 30 years.
And the issue, really, as you put it, is spending.
And the reason that the government gets away with that spending is the bond markets allow them to.
You know, if you ever fully had the bond market revolt, like it did with Greece briefly in 2011, 2012, if you ever had that happen with the United States, well, that would change things pretty quick.
And we had a little bit of a revolt in early April of this year, which is actually why the Trump administration pivoted so aggressively from their, you know, sort of all-out trade war they were trying to manifest to saying, well, we're going to do a pause.
We're going to start being a lot more careful.
You know, it's going to be a case-by-case situation.
So I'm right there with you.
It's the spending.
Well, you know, nobody wants to get rid of the spending.
You know, I think your point, whose money is it, really, that's an important point, because a lot of people assume, matter of fact, the whole system is devised by saying this government owns all of it.
And you can't spend anything unless you get permission from the government.
And this is one of my arguments about tariffs, you know, because there's too much mischief.
There's too much protectionism for particular companies that might have more influence.
So I think that is a problem where I think the individual, I argue the case that, you know, if a poor person struggles and can buy tennis shoes in this country and maybe pay $50 for those shoes and have some shoes, but if you put a tariff on it and put a tax on it, the price goes up.
They want to protect it, you know, to protect the manufacturers here.
But I say it's their money.
They should have the right to spend it.
And I argue that there are two things that indicate that self-ownership is neglected.
One is the military draft.
And to witness what has happened throughout our history, you draft up kids that didn't have a say in what war they're going to, and thousands, tens of thousands of them are being killed.
And the other one is the income tax.
The government owns us because you can't spend any of it until the government permits you to do so after a lot of red tape.
That's exactly right.
In my first book, The Everything Bubble, I actually sat down and tried to figure out how many taxes a dollar goes through before it actually ends up in your pocket.
And it's something five or six rounds of taxes before you actually even get access to it.
And then if you save it or invest it, you decide to hand it off to your children or your grandchildren, you know, it's going to be taxed again with the estate tax.
So it's the tax systems, you know, it's always talking about paying your fair share, but I think that's a bit of a false argument in the sense that, you know, what would be a lot more fair is if the spending was cut and we didn't have to have all these taxes to begin with to cover all that spending.
Because it's not as if the capital is being well allocated.
And you know that's the case because as soon as Elon Musk came in with Doge, you saw all the shrieking and the gnashing of teeth and the wailing about the stuff he was uncovering because he was finding out just how much fraud, waste, and abuse there was.
The big problem is the big problem is who decides what is the fair share.
Now, if everybody was given the chance to make the decision of what a fair share is, that'd be a little bit different.
Who Decides Fair Share? 00:00:58
Well, we'll have to wind down right now, Graham, but I want to thank you very much for joining in and give you a last minute to promote your book and urge people to expand in their knowledge about investments and gold and precious metals and benefit from your experiences.
Oh, thank you so much.
So my name is Graham Summers.
I'm a chief market strategist for Phoenix Capital Research.
We're an independent investment research firm in Charlottesville, Virginia, and our goal is to provide our clients with access to the best strategies and ideas they can get a hold of to manage their wealth and to grow their portfolio so that they can outpace inflation and do well.
I've written two books, The Everything Bubble and Into the Abyss.
They're both on Amazon.
They're very easy to find.
I'm on Twitter, or excuse me, X now.
It's not Twitter anymore.
And social media, so I'm happy to help anybody in any way I can.
Very good.
Once again, Graham, I appreciate very much you coming on, and I appreciate our audience and our viewers for turning in.
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