Latest / Financial Survival Network / Fiat Collapse Fuels Gold’s Bull Run - John Rubino #6335

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Fiat Collapse Fuels Gold’s Bull Run - John Rubino #6335 · Financial Survival Network

0:00
Speaker 1: This is the landscape of a currency reset. You know
0:03
Speaker 1: when when the FIAD currency system ends and we go
0:07
Speaker 1: to something new, like a gold standard or something else,
0:10
Speaker 1: you know, some kind of sound money where the government
0:12
Speaker 1: doesn't have the ability to borrow unlimited amounts and just
0:15
Speaker 1: print the difference. Then we have to live within our needs,
0:18
Speaker 1: which means government spending has to be cut by a
0:21
Speaker 1: third to a half in most of these big countries.
0:24
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0:51
Speaker 3: Welcome you are listening to and watching the Financial Survival Network.
0:56
Speaker 3: I'm your host, Carrie Letz. John Robino is back with us. John. Hey, first,
1:03
Speaker 3: go to John Substack. It's Rabino dot substack dot com.
1:08
Speaker 3: John was really ahead of the curve here getting onto substack.
1:13
Speaker 3: I recently made the transition. I don't think about my
1:16
Speaker 3: website anymore. I don't think about sponsors for it. I
1:20
Speaker 3: don't think about when it breaks, what do I do
1:23
Speaker 3: to make it go back up? I don't care about
1:25
Speaker 3: any of that stuff, so I highly recommend it. And John,
1:30
Speaker 3: you told me something pre call that shocked me that
1:33
Speaker 3: in Vietnam they're selling metal on every street corner and
1:38
Speaker 3: none of the booths have silver.
1:41
Speaker 1: Hey carry, Yeah, let's take a step back and look
1:45
Speaker 1: at the precious metals market in general, because that's why
1:47
Speaker 1: the Vietnam thing matters. Because gold just touched it's all
1:54
Speaker 1: time inflation adjusted high, so it's never been higher no
1:58
Speaker 1: matter how you measure it. So this is a rock
2:01
Speaker 1: and bull market. And then silver is very close to
2:04
Speaker 1: its nominal all time high fifty dollars an ounce, so
2:08
Speaker 1: you know, it's really getting up there. And so a
2:09
Speaker 1: lot of people are asking, Okay, is this the end
2:12
Speaker 1: of this bull market? Are we going to bounce back
2:14
Speaker 1: off the resistance there and go into a big correction
2:17
Speaker 1: and are we going to get round tripped on our
2:20
Speaker 1: stacks and stuff? And I think the answer in this
2:23
Speaker 1: case is no. The longer term trend is in place
2:28
Speaker 1: because those previous precious metals bull markets were kind of
2:33
Speaker 1: about the business cycle of the time. You know, what
2:35
Speaker 1: was going on in the nineteen seventies and how high
2:39
Speaker 1: would inflation go and stuff like that, and the inflation
2:42
Speaker 1: was transitorian back then, and so gold and silver went
2:46
Speaker 1: back down. This time around, gold and silver are rising
2:51
Speaker 1: because the fiat currency experiment is ending, which is a
2:56
Speaker 1: much bigger deal. That is secular, that's epically secular. You
3:00
Speaker 1: know that that is a whole new world being born
3:04
Speaker 1: right now in finance, and we're nowhere near the peak
3:09
Speaker 1: of that process because you know, the fiat currencies of
3:12
Speaker 1: the world are still out there functioning, but they're they're
3:16
Speaker 1: they're starting to deteriorate in an unstable, kind of hard
3:21
Speaker 1: to predict way now where it's not smooth, and that's
3:25
Speaker 1: what's spooking everybody. You know, the dollar is losing its value.
3:28
Speaker 1: It's down by a ten percent in terms of real
3:33
Speaker 1: things that you have to buy with gold, you know,
3:37
Speaker 1: and that's just one year's deterioration, and it's continuing now.
3:41
Speaker 1: What that means is that we probably have further to
3:44
Speaker 1: go in the will market for precious metals right now.
3:47
Speaker 1: You know, the long term trend is massively up, but
3:49
Speaker 1: even the short term trend is looking pretty interesting. And
3:52
Speaker 1: one of the ways you know that is like you said, Vietnam,
3:56
Speaker 1: they're a society that owns a lot of gold, and
3:59
Speaker 1: the government makes it easy by allowing stores just to
4:02
Speaker 1: sell precious metals with minimal regulation. And so any story
4:06
Speaker 1: you go into on the street in Vietnam might be
4:09
Speaker 1: selling you gold and silver coins or bars, and right
4:13
Speaker 1: now they're out of silver. You know, they've sold so
4:16
Speaker 1: much silver that the supply can't keep up with demand.
4:20
Speaker 1: And so a lot of these places are just out
4:22
Speaker 1: of stock on the most popular silver coins and bars.
4:26
Speaker 1: And that's the kind of thing that usually presages a
4:32
Speaker 1: kind of parabolic spite driven by panic buying, because if
4:36
Speaker 1: you want silver, you got to pay way up for
4:38
Speaker 1: it now to get it right if you can't just
4:39
Speaker 1: walk into a store and buy it. And so that's
4:41
Speaker 1: the kind of sign that we're in the intermediate stages
4:47
Speaker 1: of the boom market and we haven't really had our
4:49
Speaker 1: parabolic spike yet. So I think if you're stacking, continue
4:54
Speaker 1: to stack. Don't go crazy out there, but continue to
4:58
Speaker 1: add to your pile of gold and silk and dollar
5:01
Speaker 1: crust average or whatever did you do. Just keep on
5:03
Speaker 1: doing it because the wind is still at your back
5:08
Speaker 1: and we've got a ways to go before the resistance
5:12
Speaker 1: starts pointing towards you know, a big correction or anything.
5:15
Speaker 1: I don't see anything like that right this minute.
5:17
Speaker 3: I couldn't agree with him more. Look, it was just
5:20
Speaker 3: a month ago, two months ago, I was buying a
5:23
Speaker 3: silverette underspot. You know, nobody likes these Kennedy forty percent
5:29
Speaker 3: half dollars. But in the meantime, I bought a bag
5:32
Speaker 3: of them, one thousand dollars face value bag way back
5:36
Speaker 3: in was it like two thousand and ten or nine,
5:41
Speaker 3: after silver had crashed, when we had the great financial collapse,
5:48
Speaker 3: you know, but we don't know from great financial collapses
5:51
Speaker 3: in this swirld. But but now, like people, I bought
5:55
Speaker 3: it for underspot under Milt, under melt value, you know,
6:00
Speaker 3: a fifty cent piece that's forty percent silver. And now
6:05
Speaker 3: those things are worth like six times what I paid
6:08
Speaker 3: for them, even though there may be going for a
6:11
Speaker 3: little underspot under milt or at milt, whereas ninety percent
6:17
Speaker 3: might be going for a few percent above. But my
6:21
Speaker 3: feeling is that when silver really gets tight, people aren't
6:25
Speaker 3: going to care if the coin is forty percent or
6:28
Speaker 3: ninety percent. They're just going to want it, and I
6:30
Speaker 3: think Vietnam could very well be the precursor to that. John. Yeah.
6:36
Speaker 1: Yeah. When the supply of something dries up but its
6:42
Speaker 1: prices is still rising so people fear missing out on it,
6:46
Speaker 1: you get the potential for some really wild moves. And
6:50
Speaker 1: I think silver is such a First of all, it's
6:53
Speaker 1: a small market relative to a lot of other financial assets,
6:56
Speaker 1: so there just isn't that much silver out there. It's
6:59
Speaker 1: kind of thinly traded because a lot of people, you know,
7:01
Speaker 1: especially stackers these days, you know, we don't trade or
7:04
Speaker 1: we just buy it and put it away. So it's
7:07
Speaker 1: taken off the market, and it's in deficit right now
7:11
Speaker 1: as far as industrial demand goes. In other words, the
7:14
Speaker 1: world's silver mines aren't producing enough silver to satisfy the
7:18
Speaker 1: demand from solar panel makers and ev makers and the
7:22
Speaker 1: military industrial complex around the world making missiles that have
7:25
Speaker 1: silber in them, and that is vaporized when the missiles
7:29
Speaker 1: blow up, you know, So we're not producing enough news
7:34
Speaker 1: silver to satisfy the demand, and the existing stock piles
7:38
Speaker 1: of silver out there are being depleted rapidly. So one
7:42
Speaker 1: way this plays out, or one way this is revealed,
7:45
Speaker 1: might be a default on a metals exchange like COMEX,
7:49
Speaker 1: where you've got you've got a futures contract that allows
7:55
Speaker 1: you to demand delivery of x amount of silver. You
7:58
Speaker 1: take it in and say, okay, I'll take my and
8:00
Speaker 1: they'll say sorry, we're going to have to give you cash.
8:03
Speaker 1: And that's so you still get paid back, but it's
8:06
Speaker 1: a default because they admitted they don't have enough silver
8:10
Speaker 1: to cover the contracts, and that'll cause people just to panic.
8:13
Speaker 1: If that happens, God that that will be amazing, because
8:17
Speaker 1: you know, the industrial guys who need silver to produce
8:21
Speaker 1: the expensive stuff they produce, they don't really have an
8:25
Speaker 1: option of just sitting back and thinking, all right, I'll
8:27
Speaker 1: wait till it goes down twenty dollars an ounce, because
8:30
Speaker 1: maybe then you know, they can't make their cars or
8:32
Speaker 1: whatever or right on be able to supply the missiles
8:36
Speaker 1: to defense that they promised that. So you can't let
8:38
Speaker 1: that happen. So you've got to buy the silver at
8:40
Speaker 1: any price, and we're the situation is such that we
8:46
Speaker 1: could see something like that sometime in the balance of
8:48
Speaker 1: this year or next year.
8:50
Speaker 3: I think it's a definite. That's what Keith Neumeyer has
8:55
Speaker 3: been talking about commercial signal fail. That's based what we're
9:00
Speaker 3: talking about, where the paper market kind of just disappears,
9:05
Speaker 3: It vaporizes before your very eyes, and then you're just
9:10
Speaker 3: left with the physical market.
9:12
Speaker 1: Right yeah, I mean if the if the paper guys
9:15
Speaker 1: cannot produce physical then what are they. You know, there's
9:19
Speaker 1: just you know, a bunch of financial dufices playing games
9:24
Speaker 1: with computer code. You know, it's just it's just signals
9:30
Speaker 1: going back and forth. There's no physical reality to any
9:32
Speaker 1: of it.
9:33
Speaker 3: And done that way for a while.
9:36
Speaker 1: Well, I mean, they've been able to manage to to
9:40
Speaker 1: give metal to people who ask for it. There hasn't
9:43
Speaker 1: been a physical default yet. But when that happens, that
9:46
Speaker 1: completely changes the nature of an exchange like comes right.
9:49
Speaker 1: I mean, if they if they don't have to come
9:53
Speaker 1: up with much metal, that's one thing, But if they
9:55
Speaker 1: can't come up with any that's a whole different thing.
9:58
Speaker 1: And it's totally but something like that happens in the
10:01
Speaker 1: not too distant future, and it'll look kind of like
10:04
Speaker 1: the stores in Vietnam where all of a sudden everything's
10:07
Speaker 1: out of stock, you know, and if you want it,
10:10
Speaker 1: you got to pay way up because you can't go
10:13
Speaker 1: through normal channels.
10:15
Speaker 3: Yeah, we've been waiting for this for like years here,
10:19
Speaker 3: you know, and here, sure it's finally finally upon us,
10:24
Speaker 3: and so many of you out there don't even believe
10:27
Speaker 3: it because we thought we'd never see the day because look,
10:32
Speaker 3: they've been controlling the price of silver for sixty plus years.
10:36
Speaker 3: Arguably you could go back to the late eighteen hundreds
10:41
Speaker 3: and the demonetization and William Jennings Bryant and all that,
10:45
Speaker 3: but let's just say from nineteen sixty five when they
10:49
Speaker 3: demonetize silver from the coinage, it's been manipulated from that
10:54
Speaker 3: point forward. That's not a stretch. And now all of
10:59
Speaker 3: us sudden the game is up, John.
11:03
Speaker 1: Yeah, yeah, well we're close to that. We're close to
11:06
Speaker 1: the point where the old systems don't work anymore. And see,
11:10
Speaker 1: you you know, you ideally would like to be fully
11:14
Speaker 1: invested by then, but if you're not, you still don't
11:19
Speaker 1: want to jump in with both feet because precious metals,
11:22
Speaker 1: like a lot of markets these days, are very ball
11:24
Speaker 1: little and you can get burned. So you know, the
11:27
Speaker 1: time to have finished our buying would have been like
11:30
Speaker 1: twenty twenty three. But still, well, whatever you've got you
11:35
Speaker 1: should hold.
11:37
Speaker 3: I was just buying it for fun on eBay, just
11:41
Speaker 3: to show people you could buy for less than spot,
11:44
Speaker 3: because I'd wait till a Friday where silver went up
11:48
Speaker 3: a dollar and then nobody, most of the sellers on
11:53
Speaker 3: there were not adjusting their prices, so I would get
11:58
Speaker 3: it at the pre you know, they'd be up there
12:01
Speaker 3: for three or four days, silver went up to three
12:04
Speaker 3: dollars an ounce, and they didn't adjust their prices, just
12:08
Speaker 3: you know, just to prove, just to prove that it
12:11
Speaker 3: could be done.
12:13
Speaker 1: And yeah, a career actually, you know, just going on
12:18
Speaker 1: eBay and it's exploiting the who aren't in attention.
12:22
Speaker 3: Yeah, totally arbitraging it. And it was simple, you know,
12:28
Speaker 3: like you just knew, like you looked on you could
12:36
Speaker 3: pretty much figure out the melt value per dollar of
12:43
Speaker 3: you know, of silver, and ninety percent was like at
12:46
Speaker 3: twenty six, and forty percent was like at at twelve. Say,
12:55
Speaker 3: I don't remember the exact numbers, but it was. It
12:58
Speaker 3: was crazy and you know, like it just totally worked.
13:03
Speaker 3: Now it could have easily not worked as well. You know,
13:07
Speaker 3: I'm not the perfect at this game. And the cycles
13:12
Speaker 3: they can really whipsaw you and you can really wind
13:16
Speaker 3: up getting burned. But I felt like at this point, John,
13:19
Speaker 3: you know, I wasn't betting the ranch on it. It
13:22
Speaker 3: was more just like a fun activity, you know, and
13:27
Speaker 3: it worked, so you can't beat that, right.
13:32
Speaker 1: What else I noticed was a couple of years ago,
13:34
Speaker 1: a lot of friends wanted to sell their silver, yeah,
13:38
Speaker 1: and they were willing to sell it at spot. I
13:40
Speaker 1: bought a monster box off of a friend of siber
13:43
Speaker 1: Eels at Spot, which is pretty hard to do in
13:47
Speaker 1: a normal market, and three or four other people sold
13:50
Speaker 1: me some silver then too, So I think there was
13:53
Speaker 1: exhaustion at the same time things were just getting started,
13:55
Speaker 1: there was exhaustion out there on the part of people
13:58
Speaker 1: who had bought soon over in you know, two thousand
14:03
Speaker 1: and two or something like that, and just been holding
14:05
Speaker 1: it all this time. And then you know, it went
14:07
Speaker 1: up for a while and then it went back down
14:08
Speaker 1: and it's so boring, I need to get my cash out.
14:11
Speaker 1: And that's kind of a sign of the mark up
14:15
Speaker 1: a bottomn when people are just willing to go all right,
14:18
Speaker 1: just take it away. I thought it was going to be,
14:20
Speaker 1: you know, better than this, and it wasn't so And yeah,
14:24
Speaker 1: so that was you know, it was kind of a
14:26
Speaker 1: lucky break, yeah that around people like that, but it
14:30
Speaker 1: was also a sign that something like today was going
14:32
Speaker 1: to happen, you know, where where you get this long,
14:36
Speaker 1: long upswing that then everybody wants to join and then
14:40
Speaker 1: it really takes off. So you know, we're up big
14:42
Speaker 1: today and both gold and silver. Yeah, well we were exactly.
14:46
Speaker 3: But yeah, every raid they've tried to bring it, you know,
14:50
Speaker 3: whether we're tinfoil conspiracy, but just just assume that they
14:54
Speaker 3: do raids and you'll see in the access market in
14:58
Speaker 3: the early hour they slam it which is thinly traded
15:03
Speaker 3: in Asia, and they slam it down a dollar and
15:06
Speaker 3: then by the afternoon it's it's erased all its losses
15:11
Speaker 3: and is up or is only down like five or
15:14
Speaker 3: ten cents. And then they'll time that hitting the silver stocks,
15:22
Speaker 3: they'll hit the sil the ETFs and the sil j
15:28
Speaker 3: but it has no lasting effect. So that's uh, that's
15:32
Speaker 3: pretty indicative I think of what's really going on here,
15:36
Speaker 3: you know, and yeah, this is.
15:40
Speaker 1: This is completely different trading patterns than it used to
15:42
Speaker 1: because it used to be there at like four o'clock
15:44
Speaker 1: in the morning, somebody would just smash gold to silver
15:49
Speaker 1: in the futures markets, but then it would they would
15:51
Speaker 1: stay down for most of the day. That smash would
15:54
Speaker 1: have spooked people and they didn't jump right back in.
15:57
Speaker 1: But now you see the smash and then you see
16:00
Speaker 1: a gradual increase in the price from there, and it
16:02
Speaker 1: goes up, and it goes up, and it ends the
16:04
Speaker 1: day up, even though somebody came in with a lot
16:08
Speaker 1: of money in the futures market trying to knock gold
16:10
Speaker 1: and silver down. So yeah, that's a bull market behavior.
16:14
Speaker 3: Who would do such a thing, selling inn selling losses,
16:19
Speaker 3: making notes in trades by design?
16:22
Speaker 1: Why was it any JP Morgan Chase. Yeah, maybe JP
16:26
Speaker 1: Morgan is just finally loaded up on enough silver that
16:29
Speaker 1: they're ready to let it rip.
16:31
Speaker 3: So that kind of What about the reports that the
16:35
Speaker 3: gold is pouring into the United States from Europe? I
16:39
Speaker 3: don't know if you've heard that. We hadn't talked in
16:41
Speaker 3: a while, but supposedly vest amounts of bars are coming here,
16:46
Speaker 3: like tons and tons.
16:48
Speaker 1: Well, a lot of that stuff is terrorf related. They
16:50
Speaker 1: just don't know, you know, how how it's going to
16:53
Speaker 1: be to move metal around, and they want to get
16:55
Speaker 1: ahead of it because maybe Trump's going to slap a
16:59
Speaker 1: fifty percent terror on it from you know, starting next
17:02
Speaker 1: month or something like that, and so that's part of it.
17:04
Speaker 1: The other part is that Europe is a mess. Europe
17:08
Speaker 1: is almost over as the continent that we once knew,
17:11
Speaker 1: you know, And if you look at France, that was
17:14
Speaker 1: on our list of things to talk about. So now
17:16
Speaker 1: we could we could segue over there, because here's France's story. They,
17:21
Speaker 1: you know, were a fairly rich country by basically any
17:24
Speaker 1: measure twenty years ago or so, and they set themselves
17:26
Speaker 1: up with really generous a social safety net and retirement
17:31
Speaker 1: plans and things like that, where you retire at a
17:33
Speaker 1: young age and you make basically a nice living off
17:37
Speaker 1: of the government. And the lines just crossed. It used
17:40
Speaker 1: to be that the average person would make more during
17:44
Speaker 1: their working lifetime than when in retirement. But the line
17:48
Speaker 1: just crossed where the average retiree now is set up
17:50
Speaker 1: to make more during his thirty years of retirement than
17:54
Speaker 1: the average person makes during their working lifetime. So they
17:57
Speaker 1: basically set up a completely unsuc sustainable welfare system. So
18:02
Speaker 1: they did that, and that requires massive increases in government spending.
18:07
Speaker 1: So they let their deficits go up way beyond the
18:10
Speaker 1: rules and the master treaty that define the European Union
18:14
Speaker 1: and the euro It was supposed to be that you
18:17
Speaker 1: were limited to a three percent of GDP deficit. Well,
18:21
Speaker 1: France just moved through that. So they're racking up massive
18:24
Speaker 1: debts and their interest rates are going up because the
18:27
Speaker 1: blonde market doesn't trust them anymore. So the cost of
18:31
Speaker 1: the debt is going up basically twice because the amount
18:34
Speaker 1: of debt is going up and the interest on that
18:36
Speaker 1: debt is going up, and France is basically and broke,
18:40
Speaker 1: and so they can't keep a government in place because
18:44
Speaker 1: the only thing a government can do now, if it's rational,
18:47
Speaker 1: is try to scale back spending to prevent the fiscal
18:51
Speaker 1: and monetary train from going off a cliff. And as
18:57
Speaker 1: soon as they do that, all the French people hit
18:59
Speaker 1: the streets and they get the government thrown out of office.
19:03
Speaker 1: And that just happened where the most recent prime minister
19:07
Speaker 1: was in power for like sixteen days and then he
19:09
Speaker 1: had to quit. So France cannot fix its problems. It's
19:14
Speaker 1: going broke in an accelerating rate. And it's one of
19:19
Speaker 1: the so called success stories in the Eurozone because Normany
19:24
Speaker 1: is a catastrophe for other reasons. You know, they just
19:27
Speaker 1: destroyed their energy economy and that industrialize them. Now, while
19:32
Speaker 1: that's happening, while these countries are engineering financial crises, their
19:39
Speaker 1: open borders are letting so many people from so many
19:42
Speaker 1: other cultures in that a lot of different parts of
19:44
Speaker 1: Europe are becoming caliphates almost, you know, that are ruled
19:51
Speaker 1: under very different rules than used to prevail in it,
19:54
Speaker 1: like a liberal democratic, quasi capitalist society, which is what
19:57
Speaker 1: we used to think of as Europe. So they've i
20:00
Speaker 1: got a civil war on one hand, or maybe two
20:02
Speaker 1: different civil wars, one the different cultures fighting each other,
20:05
Speaker 1: the other the government fighting people who are demanding ever
20:09
Speaker 1: increasing amounts of social spending. And you know, there's no
20:13
Speaker 1: way the euro as a coherent reserve currency survives something
20:18
Speaker 1: like that. So that's the next decade for Europe. They
20:20
Speaker 1: are a catastrophe waiting to happen. And you know, it
20:24
Speaker 1: could be that a lot of Europeans are shipping their
20:26
Speaker 1: gold to the US because of that. They're looking for
20:29
Speaker 1: a safe haven for storage of wealth and they're choosing
20:33
Speaker 1: the US, although we're not exactly the most stable system
20:38
Speaker 1: that you're ever going to see either. So but I
20:40
Speaker 1: guess relative to Europe were okay. But you know, I
20:44
Speaker 1: don't know where you hide, really, if you're extremely rich
20:46
Speaker 1: and you're trying to protect half a billion dollars worth
20:51
Speaker 1: of gold, you know, I wouldn't know where to tell
20:54
Speaker 1: you to put it.
20:55
Speaker 3: Right now, I guess it comes to the US just
20:59
Speaker 3: like it did before World War Two, right.
21:03
Speaker 1: Well, yeah, and that was a time when the US
21:07
Speaker 1: was in relatively good shape and the rest of the
21:08
Speaker 1: world was a mess. So there's you know, that's kind
21:10
Speaker 1: of an analog. But the US is a mess too.
21:13
Speaker 1: I mean, we we've got the same We've got the
21:15
Speaker 1: kind of French problem going where we're borrowing insane amounts
21:18
Speaker 1: of money and the interest on that debt is going
21:19
Speaker 1: through the roof, and there's nothing we can do to
21:21
Speaker 1: stop it because if we try to cut spending, then
21:25
Speaker 1: whoever does that gets kicked out of office almost instantly.
21:28
Speaker 1: And you know, the military budget is a trillion dollars.
21:32
Speaker 1: So we have problems that are similar to France's. Their
21:36
Speaker 1: big problem is the social spending. Our big problem is
21:40
Speaker 1: the combination of the military industrial complex and social spending.
21:45
Speaker 1: But either way, the currencies of countries like that can't
21:50
Speaker 1: survive for long because the value of the currency starts
21:54
Speaker 1: to fall, and then you have a choice of do
21:56
Speaker 1: you raise interest rates to protect the currency, which blows
22:00
Speaker 1: up your financial system, or do you just let it fall,
22:03
Speaker 1: which blows up your financial system. And multiple countries in
22:07
Speaker 1: the world are there right now. They are at that
22:10
Speaker 1: decision point, and the US is not far from far behind.
22:13
Speaker 1: So that's when I say the fiat currency experiment is ending.
22:16
Speaker 1: That's basically what I mean. It's that this idea that
22:20
Speaker 1: everybody has an unlimited printing press and they manage their
22:23
Speaker 1: economies via creation of money out of thin air. That
22:27
Speaker 1: whole thing is ending. And it's a phenomenally good thing
22:30
Speaker 1: for gold and silver to take us back to where
22:32
Speaker 1: we started, you know, and that kind of an environment.
22:35
Speaker 1: Everybody wants real money, and they will throw unlimited amounts
22:38
Speaker 1: of fake money, that is, fiat currencies at the real
22:42
Speaker 1: money to get as much as they think they need.
22:44
Speaker 1: And those are the things that are coming right now.
22:48
Speaker 3: The Minski moment is here. Yes, Hey, so what about
22:52
Speaker 3: the government shutdown? Like nobody's even noticing it, right? You
22:56
Speaker 3: noticed it was shut down? Well, you know, The government
23:00
Speaker 3: shuts down all the time in the US. We have
23:02
Speaker 3: that debt limit law, and that's always the lever that
23:07
Speaker 3: they use when they're negotiating. We're going to shut down
23:09
Speaker 3: the government unless you give us whatever we want. And
23:13
Speaker 3: so the government shuts down for a little while and
23:15
Speaker 3: then there's outrage, and then they cut the deal and
23:18
Speaker 3: the government goes back online. What might be different about
23:22
Speaker 3: at this time, though, is that a lot of people
23:25
Speaker 3: around Trump love the idea of a government shutdown because
23:29
Speaker 3: that lets them fire government workers with immunity. You know,
23:33
Speaker 3: you can't take them to court when they're laying off
23:36
Speaker 3: workers during a shutdown, but because you can legitimately say, hey,
23:39
Speaker 3: well I don't have money to pay these guys, what
23:41
Speaker 3: am I supposed to do? And so these guys get
23:43
Speaker 3: to go in and clean house in a bunch of
23:45
Speaker 3: government agencies now, and they actually are are kind of
23:49
Speaker 3: enjoying that. So it could be that there isn't the
23:54
Speaker 3: there isn't the urgency to cut a deal this time
23:57
Speaker 3: around that there once was. You know, we could end
23:59
Speaker 3: up with the Democrats begging trunk from the government by
24:05
Speaker 3: by accepting their latest proposal of surrender, you know, because
24:09
Speaker 3: they don't want a million government employees to be laid off.
24:14
Speaker 3: That's a horrifying idea for the Democrat or their voter base. Yeah,
24:19
Speaker 3: But for the Republicans, it's like, well, so what, you know,
24:22
Speaker 3: they aren't going to vote for us anyhow, So who
24:25
Speaker 3: cares whether they can feed their children or not?
24:28
Speaker 1: So we'll see here.
24:29
Speaker 3: Yeah, Well, the whole government government work is a form
24:34
Speaker 3: of welfare, is kind of coming to an end now.
24:38
Speaker 3: I think that's what we're seeing, and they're willing to
24:42
Speaker 3: let it happen. And you know, the government union lobby
24:48
Speaker 3: is not what it used to be. I think they've
24:50
Speaker 3: laid off three hundred thousand, fired three hundred thousand government
24:56
Speaker 3: employees so far federal government, and another one hundred thousand
25:01
Speaker 3: are putting in their retirement papers now as we speak.
25:05
Speaker 3: So we got all these buildings in downtown Washington, d C.
25:11
Speaker 3: Maybe they can turn them into deportation centers or something. Well,
25:17
Speaker 3: this is the landscape of a currency reset, you know,
25:21
Speaker 3: when when the field currency system ends and we go
25:25
Speaker 3: to something new, like a gold standard or something else.
25:28
Speaker 3: You know, some kind of sound money where the government
25:31
Speaker 3: doesn't have the ability to borrow unlimited amounts and just
25:33
Speaker 3: print the difference. Then we have to live within our needs,
25:36
Speaker 3: which means government spending has to be cut by a
25:39
Speaker 3: third to a half in most of these big countries,
25:42
Speaker 3: which is we can't have all those government employees, so.
25:45
Speaker 1: They're going to get fired. Regardless. Even if the government
25:50
Speaker 1: starts back up tomorrow and everybody's rehired and everything, we
25:53
Speaker 1: still have the currency reset, which is going to involve
25:56
Speaker 1: a massive decrease in government spending and employment. So this
26:02
Speaker 1: is coming regardless, and we don't know what the form
26:06
Speaker 1: what we'll take, but it could be a government shut
26:09
Speaker 1: down over the budget or it could be a currency reset.
26:12
Speaker 1: Either way, one third of federal government employees are looking
26:17
Speaker 1: for private sector work within the next few years.
26:20
Speaker 3: That's virtually baked in the cake, you know, has to be.
26:24
Speaker 3: So what about AI here, like AI the Big Savior?
26:29
Speaker 3: You see bumps in the road for it. Huh.
26:32
Speaker 1: Well, I wouldn't presume to have any idea what AI
26:36
Speaker 1: is going to do in the next five years, because
26:38
Speaker 1: it's doing amazing stuff right now. But you also have
26:40
Speaker 1: people talking about the limitations of it and that you
26:44
Speaker 1: literally can't make it much smarter than it is right now.
26:48
Speaker 1: Because you hit kind of an event horizon where to
26:53
Speaker 1: make it anything like mistake free, it takes more money
26:58
Speaker 1: than there is on right now. You know, you just
27:01
Speaker 1: you can't get it beyond a certain point. But the
27:05
Speaker 1: point it's at right now is pretty astounding. It's doing
27:07
Speaker 1: a lot, you know, it's taking a lot of college
27:10
Speaker 1: or computer programming jobs, so that that avenue to job
27:14
Speaker 1: security isn't there anymore. You can't just go learn the
27:17
Speaker 1: code and then know you're going to work forever. And
27:19
Speaker 1: it's doing a lot of other stuff, very interesting stuff.
27:21
Speaker 1: But there's a business practice out there that is really
27:24
Speaker 1: scary in the short run, and that is kind of
27:27
Speaker 1: vendor financing right now, where say Nvidia, which is the
27:33
Speaker 1: big chip maker in AI, invests a bunch of money
27:37
Speaker 1: in open Ai, which is building a lot of AI
27:43
Speaker 1: server farms data centers, and so then in order to
27:49
Speaker 1: build more data centers, then open ai comes around and
27:52
Speaker 1: buys computer chips off of Nvidia. So Nvidia is in
27:55
Speaker 1: effect financing its own it's buying its own products, right
28:00
Speaker 1: And businesses do that every once in a while. That's
28:02
Speaker 1: kind of a common thing. You give a loan to
28:04
Speaker 1: your customer so they can buy your stuff. You then
28:09
Speaker 1: record that as sales and profits, and the debt gets
28:14
Speaker 1: shuffled over to the balance sheet where nobody's looking. And
28:18
Speaker 1: that works as long as your customer can pay back
28:21
Speaker 1: the money that you've lent them. And where you're getting
28:23
Speaker 1: into trouble it's where the customer goes bankrupt and then
28:26
Speaker 1: all this debt that you thought was going to be
28:29
Speaker 1: just paid back via profits and cash flow has to
28:33
Speaker 1: be paid back some other way, and so you risk
28:37
Speaker 1: going bankrupt too. So that's happening now in AI. And
28:43
Speaker 1: you know, they've got so much money coming in from outside,
28:46
Speaker 1: it seems reasonable. You know, if your equity market cap
28:51
Speaker 1: is four and a half trillion dollars, you can throw
28:53
Speaker 1: one hundred million dollars at vendor financing. It's a drock
28:57
Speaker 1: in the bucket. But that's that's what that's what it's
29:01
Speaker 1: like in really good times. But as soon as time
29:02
Speaker 1: gets times get hard, those loans become really onerous liabilities
29:08
Speaker 1: of the lender, and so we'll see, you know, it's
29:12
Speaker 1: a dangerous thing that's happening. And equities, especially tech stocks,
29:18
Speaker 1: are as richly valued as they've ever been in human history.
29:23
Speaker 1: So based on historical measures evaluation. We're due for at
29:28
Speaker 1: least a correction and probably a really nasty bear market.
29:33
Speaker 1: And if we do get an equities downturn, then all
29:37
Speaker 1: this vendor financing is going to become front page news.
29:39
Speaker 1: You know, people are going to be wondering how that
29:41
Speaker 1: was allowed to happen, and that won't be good for
29:44
Speaker 1: stock prices when it happens.
29:46
Speaker 3: Yeah, that's for sure. You know. The one thing about
29:48
Speaker 3: the AI is like the big companies using it, Like
29:54
Speaker 3: you get open Ai, which is strictly just an AI company,
29:58
Speaker 3: but obviously x which is using it at a grock,
30:03
Speaker 3: and then you have Google with Gemini, Microsoft with Copilot,
30:09
Speaker 3: and Meta with Facebook whatever the heck they call theirs,
30:13
Speaker 3: and even Amazon is getting into the act. For them,
30:16
Speaker 3: they're not AI first companies, so they're probably sustainable. But
30:23
Speaker 3: for companies that are just like Claude, there's there's a
30:27
Speaker 3: zillion just pure AI companies. How do they survive? Why
30:32
Speaker 3: is there is any better than chat GPT? Well, interesting
30:36
Speaker 3: times ahead. I guess we will get together again shortly,
30:41
Speaker 3: and probably I expect the next time we talk John
30:44
Speaker 3: that there will be either a massive fight to keep
30:48
Speaker 3: silver under fifty dollars because that is the line in
30:54
Speaker 3: the sand, and maybe gold will be over four thousand.
30:58
Speaker 3: That I think is a layout up, but at some
31:01
Speaker 3: point we didn't talk about it. The gold silver ratios
31:05
Speaker 3: gota compress. Especially if gold is you can buy all
31:10
Speaker 3: the gold you want as long as you're willing to
31:11
Speaker 3: pay for it, but you can't buy silver because it's
31:15
Speaker 3: just not there, regardless how much you're willing to buy. Anyways,
31:19
Speaker 3: make sure you go over to johnsite Rabino dot substack
31:22
Speaker 3: dot com and our site which just go to Financial
31:27
Speaker 3: Survival Network dot com. It'll take you to our substack. John.
31:31
Speaker 3: We will talk to you again soon. Be well.
31:33
Speaker 1: Thanks Carry you too, talk to you soon.
31:35
Speaker 2: Thanks for listening to carry Letz's Financial Survival Network, your
31:39
Speaker 2: solution to today's trying times. For the latest, go to
31:43
Speaker 2: Financial Survivalnetwork dot com. Financial Survival Network
31:48
Speaker 1: Now more than ever