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I was warning about the 2008 financial crisis before it happened which was the case in fact I was warning about it very vocally leading up to that crisis well I can assure everybody today that the crisis that's coming is going to be far worse than anything that was experienced in 2008 but it's going to be of a different nature and there's going to be a different outcome of course the cause is the same it's the Federal Reserve and monetary policy and to a lesser but also important extent uh government fiscal policy which is helping to drive the Reckless monetary policy but I think the way it's going to play out in the financial markets is going to be a lot different I think the important consideration this time around is going to be inflation and I think inflation is the primary factor that everybody should take into consideration when trying to formulate an investment strategy especially one that is going to uh you know do well in the coming decade and you have to think of inflation not just as a monetary phenomena and not just as the effect that inflation is going to have on prices and not just consumer prices but and asset prices inflation is really a tax I mean that's basically what it boils down to and you have to understand this because governments really have two ways of paying for their expenditures the most honest way is through current taxation now obviously that could be unpopular for the people who are paying the taxes right nobody likes to send money to the US government and so when politicians are constantly running for re-election they don't want to have to tell the voters how much all these government programs cost another way that government can do it which is really the first way just delayed is by borrowing the money and I'm talking about borrowing it legitimately from a private lender who is willing to take money and loan it to the US government by buying a US treasury bond from the government now when governments do this they're just delaying the taxation into the future because whatever money the government borrows today must be repaid tomorrow and where is the government going to get the money to repay the bond holders well from the taxpayers of the future but in the meantime the taxpayers of today have to pay the interest on the money that's been borrowed so in other words when government pays for its spending programs by borrowing the taxpayers are actually on the hook for an even greater cost because not only do they pay back the principal but they have to pay all the interest it's just like if you go out if you want to buy a new uh let's say television set if you just buy it uh it's cheaper than using a credit card and then paying your monthly your minimum payments every month because by the time you pay off uh the television said maybe you've paid two or three times the actual cost because of all the interest that you've paid over the years well that's the same thing when you pay for government programs with debt by the time you repay the debt the government programs were a lot more expensive than if you had just paid for them uh with current taxation see now the government has to resort to a new method of Finance because it is now impossible for the government to borrow money from private sources because it can't afford to pay a high enough interest rate to private lenders to make this a viable transaction and that is because of the enormity of the debt that we currently have right the US government has borrowed so much money to try to delay the Day of Reckoning for so long and kick the can down the road as we've gone deeper and deeper into debt now that we have a national debt that's approaching $30 trillion there is no way that the US Government Can finance that that I mean repaying the debt is completely impossible I mean not with money that has any real purchasing power but at this point the principle of the debt is just so enormous that even if the government was forced to pay a normal rate of interest it could not actually make those payments the US debt crisis could ignite a long-term rally in Gold since March 2020 the US added another $8 trillion in debt and gold is up 50% buying gold and silver is a offensive strategy when you don't trust elected officials in Washington DC having your best interest at heart so what's happening now is that the government is financing its expenditures through inflation and the way that process works is the government issues debt and then it's the Federal Reserve that buys that debt but when the Federal Reserve buys the debt it has to expand the money supply to do it see when the US government borrows from a private lender it's taking money from one person and loaning it to another it doesn't increase the money supply and the person who is loaning the money to the government can't also spend that money because they've loaned it to the government and now the government gives it to somebody else to spend but when the Federal Reserve monetizes that debt and prints new money then it's all new spending in the economy because the government hasn't taken money away from anybody but it's giving new money to other people and another way to think about it is when the government taxes you to pay for its spending it literally takes your money right your money just comes right out of your paycheck if it's an income tax government takes your money and then they give that money to somebody else and now somebody else spends the money that you earn you can't spend it because the government took it and gave it to somebody else so your standard of living your purchasing power is diminished because you have less money to spend but when the government doesn't raise your taxes if it just prints money and then gives it to that same individual to spend your purchasing power at least in dollar terms hasn't been diminished but now you have another guy or gal who has given all this cash that can now go out and spend it and so what happens is that person competes with you to buy stuff and prices are Bid higher and so the result of that type of Taxation is that prices go up everything becomes more expensive so instead of the government taking your money the government takes the purchasing power of your money and that's a tax and you know if you look at what's happening now especially since the beginning of the pandemic government debt and money printing is off the charts I mean we've never experienced anything like this in fact I think about half of the money that the government is now spending is being printed by the Federal Reserve so it's not really borrow and spend anymore it's print and spend and right now nobody seems to think that this is a problem people seem to think that we've stumbled on uh the equivalent of a mon monetary Fountain of Youth people like to call it modern monetary Theory which is we can have whatever we want as long as Government prints the money to pay for it that there's no limit that government is free as long as they print money now of course why didn't we realize this in the past I mean why have we been paying taxes all these years if all we had to do is print money after all the printing press has been around for hundreds of years uh and so if we could have whatever we want by the magic of uh government printing money what's the point of all of us having to pay taxes the reality is is this is a fantasy that is going to end in disaster see there's a big difference between earning money and just having the government printed see when people are productive when they have a job and they go to work and their labor is used to increase the supply of goods or services available to the public right you have a job you do work and your work either AIDS in the production of a good that people want or need or you're helping to provide a service that people need and in exchange for that help you earn money and now you could use that money to help buy the goods and services that you yourself help to produce and the more productive you are well the more you earn and therefore the greater share of what Society produces you are able to enjoy yourself but when the government just prints money and gives it to you when you have all these unemployed people who are sitting at home just getting a check from the government they produced nothing they added no goods or services to the economy yet they can consume goods and services in the same proportions as if somebody had actually done work and actually been uh you know productive member of society so what does this do all this does is drive up prices because if your work adds to the goods and services and now you're consuming the goods and services you help create that's fine but if now you start consuming goods and services yet you didn't help create any of those goods and services you just have more money chasing a diminished supply of goods and services and prices are going to go up and they are going to go up like never before and the irony of all of this is that the Federal Reserve has been promising Americans more inflation well that's one promise that they're going to deliver on in fact they're going to deliver on it beyond their wildest expectations and contrary to what everybody is saying inflation is not a good thing inflation is not desirable higher inflation is not making progress what people want is a lower cost of living when prices go down that's progress and that's capitalism that's how capitalism works when you have real capitalism businesses become more productive they become more efficient they develop economies of scale and as they do that the cost of production comes down and as the cost of production goes down demand goes up because as prices go down more more people can afford to buy more stuff and it's falling prices that have historically driven a rising standard of living well the government has interrupted that benevolent process through inflation and a lot of the times you know inflation doesn't simply make prices go up inflation also prevents prices from going down and a decline in a price would have been a windfall for the consumer when the consumer is denied that windfall by government it's still a tax the government is still taking your purchasing power because the goods and services that you want to consume are more expensive as a result of the government inflation now of course a lot of the inflation that government has been creating since the 2008 financial crisis a lot of that inflation has temporarily moved into asset prices that's the stock market the bond market the real estate market the market for Collectibles or other other things that are you know in short supply and so when inflation pushes up asset prices people don't complain because the people that own those assets of course feel much richer now if you don't own those assets it obviously it's problematic if you want to buy it for example if housing prices keep going up and you don't own a house and you want to buy one the fact that prices keep going up that's not a good thing now the way the government has offset that is by keeping interest rates artificially low so that people can afford to overpay for houses as the prices keep going up but again all all of that helps distort the economy and fuel the bubble but beneath the surface consumer prices have been rising the last thing the government wants is for the public to realize how much inflation there is they certainly don't want Bond investors to realize that the key to sustaining the bubble economy the key to sustaining massive and unsustainable government deficits in the short run is artificially low interest rates and the fed's only justification for keeping interest rates artifici low is the Preposterous idea that there's not enough inflation so this is all a ruse because the government is trying to justify a reckless monetary policy that is designed to protect the government not the economy or not the people but we're about to suffer the consequences of all this inflation in a way that's far greater than what I even imagined and a lot of that too has to do with what's happened during the pandemic which is obviously not an event that I had built into my forecast but nonetheless is simply accelerating everything that I have been forecasting and will make it worse because a lot of people their initial response to the pandemic was oh this is deflationary right this means people are not going to have demand for things because they're staying at home well that's true a lot of people stayed at home and so they didn't buy as much you know airline tickets or stay in hotels but they had no problem shopping on Amazon and and so it wasn't that demand stopped during the pandemic it just uh transferred money that consumers weren't spending uh traveling they simply spent it on on other things government produces nothing government lives off the productivity of the private sector well if the private sector is thriving then the government can take some of those resources but when the private sector is struggling with pressures like the pandemic government needs to be smaller government needs to cut back and free up those resources back to the private sector so it could use them when it needs them instead we did the opposite we compounded the problems by increasing the toll exacted by government and so we have more debt than ever before more money creation than ever before and we have created an economy that is more dependent on debt and money printing than ever before that is why inflation is about to go through the roof and again think about it as a tax the government is about to take most of what you have not through tax now they're going to increase taxes there's no question that the Biden Administration is going to raise taxes and if you think otherwise you're delusional but the main tax that is going to hit everybody is going to be inflation especially if you're poor or middle class and you're working and all you have is your wages and those wages are going to be dramatically diminished in value because of inflation but probably more important to this audience if you are a saver if you are retired or if you are nearing retirement you are about to be decimated your entire life's savings is about to be taxed Away by inflation the dollar is going to be destroyed that's why the US dollar is already falling despite the fact that all the experts predicted it would rise and now it's poised for a much bigger loss so what do you do how do you invest in the era of inflation well go back to the first decade of this century and that will give you a Playbook you can also go back to the 197 7s and see what performed well uh during that decade but what we're about to experience is going to be so much worse but if you go back to that time period and again you don't have to go back to the 70s just go back to 2000 and 2010 decade and that's when the Fed was printing all the money to uh kind of stimulate the economy after the.com Bubble Burst and uh what they did to try to you know push up housing prices and then how they reacted uh immediately to the bursting of the housing bubble what did well the dollar fell Dr atically from 2000 to 2010 dollar Index was about 120 and it went down to about 70 oil prices went from about $20 a barrel to 150 gold went from under 300 to, 1900 silver went from $4 an ounce to $50 an ounce Emerging Markets just killed it uh they were up 4 500% while the US Stock Market went down first decade of the century the S&P went down in value uh and of course the real value of US Stocks was down even more if you measured them in foreign currencies or if you measured them in the price of gold well the dollar is going to be a lot weaker now uh than it was then I think metal prices gold prices other commodity prices are going to be much stronger in this decade than they were then and so I think the relative gains that investors will enjoy by investing in overseas markets uh will be even greater than the big gains that they enjoyed in the first decade of this century and if you go back to the 1970s what were the good Investments of the 1970s when we had stagflation this time it's going to be worse stagnation and worse inflation what happened the Deutch Mark triple the Yen triple the Swiss frank triple gold went from $35 an ounce to $850 oil went from $3 a barrel to $30 a barrel I mean it was huge increases in commodity prices as the dollar collapsed the only reason the dollar stopped falling in 1980 was because we had Ronald Reagan coming in and we had Paul vuler allowing short-term interest rates to rise to to 20% that's how broke we are today compared to 1980 1980 we were still the world's biggest creditor Nation now we're the world's biggest debtor back in 1980 we still had trade surpluses now we have massive trade deficits so this is going to be a massive change I think the dollar is going to not just decline but collapse I think the next Crisis is not just a financial crisis but a dollar crisis and so the most important thing that you could do now is to completely divest of US dollar assets you got get out of us Bonds in particular Bond holders are going to be the biggest losers as the dollar collapses because all bonds are are promises to be paid dollars in the future and as little as dollars buy now they're going to buy a lot less in the future US stocks are way overpriced uh and their earnings are predominantly in dollars sure you have multinationals that are earning foreign currencies uh but a lot of their earnings come from the US and those earnings are a going to decline and B are going to be worth less but of course taxes are going up so whatever American companies end up earning there'll be less of it available for their American shareholders because of higher corporate taxes it's going to be foreign markets emerging markets in particular that are going to benefit dramatically from the declining dollar because a lot of their debts are in dollars and basically their debts get wiped out as the dollar declines and that is rocket fuel for their economies so these Emerging Markets are going to Boom Investments that are linked to Commodities are going to do extremely well you need to own physical gold as a safe haven as a store of value don't get conned into Bitcoin Bitcoin is a bubble Bitcoin isn't a safe haven it's not a store of value you can't store what you don't have when you own gold what you're doing is storing the future use of gold as a metal people need gold they'll always need Gold Jewelers need gold computer chip manufacturers the Aerospace industry Dentistry gold is the most useful the most valuable metal on the planet and it doesn't Decay but gold is to preserve your wealth you're not going to get rich owning physical gold you'll avoid going broke but if you really want to get rich or you know get a lot richer gold stocks I believe have enormous potential I think some of these stocks can go up 10 times 20 times 50 times so I think a lot of money is going to be made in Gold stocks of course there's a lot more risk in Gold stocks I mean you know no pain no gain right you can't get big returns unless you're willing to take big risks but I think the upside potential is enormous compared to the downside risk so if you are a risk taker I think these risks make a lot of sense
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