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Investors are FLEEING the Big Banks… They Know What’s Coming Next · Man in America Podcast

• 1:33
  Seth Holehouse: Ladies and gentlemen, welcome to Man in America. I'm your host, Seth Holehouse. So we've been tracking the process of what's happening with the banking industry, with the dollar, with bricks, and there's something it's funny because I never imagined before getting into this show and doing Man in America that I'd be so interesting and interested in these situations, global economics, and looking at what's happening with the dollar and the banking system. But the more that I've learned about, the more I realize is that it's actually it's the money supply that underlies everything. It's the money that gives the elites control over us.
• 2:09
  It's the fiat, the Babylonian money magic money system that is the foundation of the slave world that we live in. And so tracking the collapse and the plans of the financial system to me is one of the most important topics to focus on. And so there's been a lot of recent information that's come out, lately about bank, banks closing down, not bank failures, but bank, you know, branches closing down, layoffs, and a lot of really, really concerning economic data that's come out about, you know, delinquencies on auto loans and house loans and inflation. So a lot of this is mixing together. And so joining us today is Kirk Elliott, my good friend, for an economic update and looking at what's happening with the economy right now, what's happening with the dollar, what's it gonna look like heading into 2024.
• 3:02
  So folks enjoy this economic update with Doctor. Kirk Elliott. Kirk, it's always good to have you on. Thanks for joining us today.
• 3:11
  Dr. Kirk Elliot: Of course, it's so great to be with you as usual.
• 3:15
  Seth Holehouse: So, there's, as usual, a lot going on. And I know that when we saw Silicon Valley Bank and some of the other banks that were collapsing earlier this year, and then they came out and they assured us that the banking industry is fine, it's safe again. I think that most people, especially these days, whenever the government comes out and says, hey, don't worry about it. It's fine. It's safe and effective.
• 3:40
  Whatever they tell us, we know they're usually lying. And so you sent me a couple different reports of whether it's layoffs and some money leaving the banking system that are honestly alarming. And I think that are really kind of foreshadowing what's to come. So let me go and just pull up this this first one that you sent, which is about the Wells Fargo, and this big new wave of layoffs coming. So before we jump into this, how big of a bank is Wells Fargo?
• 4:11
  So like if Wells Fargo has massive layoffs, what does that mean?
• 4:16
  Dr. Kirk Elliot: Well, they're they're top five in North America. So you'd have JPMorgan Chase, Bank of America, Citibank, and then actually Wells Fargo, they'd be top four and then US Bank after that. So they're massive. I mean, absolutely massive. So when you think about the problems that they're going through because I get these comments all the time saying, Kirk, boy, the banking sector, we should maybe invest in their stocks.
• 4:43
  Right? Because as interest rates go up, they're gonna be so much more profitable. Well, you know, intuitively, that kind of makes sense until you go the next step, which is people are tapped out. Right? People that there were living kinda hand to mouth in America right now.
• 5:00
  One to miss you know, one to two missed paychecks away from having to file for bankruptcy is the norm. So when interest rates go up, what happens is there's tons of default. Right? People just stop paying their loans because they can't pay for it anymore. So so rising interest rates do impact banks profitability when people have a lot of disposable and discretionary income.
• 5:25
  Right? Because, yeah, so interest rates go up. We still have money left at the end of the month. We can go out and go out to eat, go to movies, whatever. But but when people are just strapped every single month and rates continue to go up, it actually has the opposite impact on banks than than prior to people being tapped out because people just simply stop paying their loans.
• 5:47
  And what's the first thing that they stop paying? It would be like credit card payments. You know, the last one of those bills that people would ever default on would be like mortgages because they don't to get evicted, right? They don't want to get booted out of their home foreclosed on. So like your credit cards, your home equity lines of credit, your car payments, personal loans, things like that usually go first.
• 6:14
  You know, it's just like, just let them go. Houses last. But what we're seeing right now is with adjustable rate mortgages coming due, right? And over the last twelve months, mortgage interest rates have more than doubled, literally more than doubled. So over the last twelve months, when somebody said, man, I've got this great arm, it's like at three and a half percent or 3%, and now that's coming in at seven, it's like, woof, my payments just doubled.
• 6:42
  Right? So so people are foreclosing, which puts downward pressure on stocks, on banks, and they're just simply having to lay lay people off. Like this article about Wells Fargo, top four bank in North America, laying off tens of thousands of people. In fact, earlier this year, they actually laid off their entire mortgage division. They just shut it down.
• 7:05
  It's like, no more mortgages. We're getting out for a while until this mortgage mess kind of clears itself up. But this isn't just specific to Wells Fargo's mortgage division. This is the bank as a whole is laying off what I think they've laid off 40,000 people in the last two years alone, which is a lot, but they're laying off thousands of people at a shot now.
• 7:29
  Seth Holehouse: One thing I want to throw out there that I was actually pulling up while you were talking. Here's a stat you're about delinquency. So most people have, if they're gonna have, they're gonna own my credit card, you have your house loan and your auto loan. So here what they're saying, is that auto loan delinquency rates are now at their highest level since 02/2008. So what it says here, it says that, from for quarter two, Q2 twenty twenty three, the auto loan delinquency rate in The US jumped to 7.3%, up from 6.9 in Q1.
• 8:02
  Moody's said the auto loan delinquencies will hit 10% in 2024, right? So this is the already it's the highest since 02/2008. And here's the they've got a graph kind of looking at that. But this you mentioned it with the housing, but like what's the what's the the bigger picture? What's the bigger thing that's happening here?
• 8:24
  Because if someone is people need their houses, they need their cars, right? So if almost 10% of auto loans have become delinquent, which means that those cars are probably going to be seized or they're going have a repo man coming, you know, it's like, okay, you stop paying your car bill. So that's why it's easy to get a car loan, right? It's because they'll just come take it back if you don't pay for it. Right.
• 8:47
  So what's this telling us?
• 8:50
  Dr. Kirk Elliot: Well, this is telling us that Americans are getting squeezed, right? Just squeezed out of buying anything. But if you start to connect these dots, let's say you were a banker, I were a banker and I were making decisions and you knew that one out of every 10 people that you gave a loan to was just not going to pay it back. Right. So what is that going to make you do?
• 9:12
  It's like,
• 9:12
  Seth Holehouse: all right,
• 9:12
  Dr. Kirk Elliot: let's phase. Well, first thing that you do rather than raise rates would be let's actually just jack up the lowest credit score that we'll take, right? So if you wanna get a loan, they'll say, okay, no loans less than 800 credit score, FICO score. Because at least that way, you know, you're getting the cream of the crop, the best of the best, right? The people who aren't going to default.
• 9:37
  Well, then after you've done that, if it still doesn't shore things up, you start to jack up interest rates to make yourself more profitable, right? So you're gonna make it harder for people with good credit to get a loan, and you're gonna make it more expensive for people with bad credit to get a loan. I mean, that's that's net capital outflow that's gonna start leaving that bank because people just aren't getting really good credit scores right now. I mean, here's the thing, for example, this was a couple of years ago. Well, is maybe more than a couple of years ago, maybe five years ago.
• 10:17
  The last loan that I had was my student loan. It was the last thing that I had to pay off. So I paid the dumb thing off. What happened to my credit score? When I paid it off, I had zero debt left, right?
• 10:31
  Nothing. I didn't owe anybody a dime. My credit score went from like 839 to like 710. I was like, what? Wait a second.
• 10:42
  I paid everything off. I'm a better credit risk now. But the banks don't look at it that way. It's like, well, you have no credit actually. So so here's where those credit scores are kind of dumb and silly to begin with.
• 10:56
  Right? It's like, we don't want you to have too much credit. We don't want you to have too little. We just want you to be an economic slave to us and dependent on your credit score and somewhere there in the middle. Right?
• 11:07
  That's how the credit scoring system works. But but here's where only people with amazing credit are gonna be able to get loans at a decent rate. Everyone else, their their rates are gonna start jacking up. That means not many people are gonna be able to get loans. That's gonna put even more of a liquidity crunch on the banks moving forward.
• 11:28
  And the people who need loans the most and when you think about it, people with great credit, a lot of times business owners, they need an inventory loans, loans for expansion of their companies or whatever. Well, they're not going to get it unless they have the cream of the crop. Then people who really need money to live on to survive, just to get through month to month, a line of credit, a personal loan, something, anything just to make ends meet to get through until they maybe find another job or whatever. Well, they're not gonna get anything. See, this is where it's forced the current markets have forced banks to actually go down these two paths, which are both paths to almost banking extinction.
• 12:12
  Seth Holehouse: Which is just kind of crazy because we think of the banking industry as almost this thing that just is always there. It's like, oh, okay, it's the bank, it's always gonna be there. And what's also interesting is this whole discussion on inflation, which I saw, I was reading an article by Peter Schiff recently about how inflation's, he expects it to go wild in 2024, and it made a good point in saying that, you you look at the cost of a product, right, like we're seeing now record high gas prices coming back, But even just things that like, if I look at things I'm buying now, say even like a case for my laptop, that may would have been $20 in the past, it's all of a sudden $45. I'm seeing that all over the place where I I kind of do a double take because I haven't checked the price on things in quite some time and like, wait, why is that so expensive? But one of the points that Peter Schiff was making is that, you know, a company has its its costs, right?
• 13:09
  Well, money is a cost. Most businesses, especially bigger businesses operate on money that's being lent by the banks, right? Against their receivables or whatever the relationship is. So as money gets more expensive, just the raw product of this money, they're gonna have to increase the price of what they're selling. And so but then the price what they're selling is then gonna be more expensive to the consumer, but the consumer can no longer get that new credit card to, you know, to kind of keep going and gas is now up and it just seems like it's really a downward spiral but something else in the article that you you sent me though was about the actual bank closures.
• 13:46
  So they're laying people off so that you're they're saying is that in the past six months, over a thousand bank branch is closed. And so this is in the beginning, past six months over 200 for PNC, one hundred eighty five US Bank, one hundred sixty for Wells Fargo, fifty four for JPMorgan. And this is a tweet from someone that the conclusion that this person is coming to is liquidity crisis incoming in all caps. So what's that mean?
• 14:15
  Dr. Kirk Elliot: I would I would actually adjust conclusion to actually be worse than the liquidity crisis. I would say you play this out. Let's just say you and your wife are sitting there at the dinner table and you you've got problems. Right? You've got economic problems.
• 14:30
  You're you're Should we file for bankruptcy? We just don't have enough money, right? What do you do? The first thing you do is start slashing your expenses. It's like, okay, let's cut this out.
• 14:41
  Let's not go out to eat. Let's, you know, get get away from our our big cell phone bill. Let's let's go to a smaller plan. Let's get rid of all the the cable or satellite that we have and go down to the smallest plan or get rid of it altogether. Right?
• 14:55
  You start to cut back is the point. Because it's not like, well, we could go get a second or third or fourth job each. Right? So usually there's not much you can do on the revenue side unless you add another job. So people will cut expenses.
• 15:12
  See, what hits the news when it comes to banks is actually a failure. Like when Silicon Valley Bank went under, when First Republic went under, when Credit Suisse went under, right? So what we're seeing here, though, is not bank failures. This is why it hasn't hit the news yet. What we're seeing is the precursor to going bankrupt.
• 15:32
  They're cutting expenses because these are all banks where they're just shutting down branches. They're getting rid of their expenses so they can continue to make ends meet. To me, that's worse than the liquidity crunch. This is like these banks, if they didn't close down branches, are probably going to file for bankruptcy. See, that's always where it comes prior to the worst of all case scenarios is.
• 15:55
  So I wouldn't be surprised if you see one of these banks over the next six to twelve months actually go under. Right? Because what they're doing right now and these aren't small. Right? These aren't these aren't like, oh, we closed a branch.
• 16:10
  Some of them closed over 200 branches, right? I mean, this is big, big time cost reduction, cost savings. And so it hasn't hit the news yet, but but it's much wider than what that that little, you know, post is showing because what's the top of that post? 1,144 banks. There's not even close to that on that list.
• 16:32
  These are just a smattering of some big ones. Right? But this is widespread throughout the entire country. There's 1,144 branches that have shut their doors, like literally shut their doors, they're cutting expenses to make sure that they can stay in business another couple days, right? That's what that number tells me.
• 16:54
  Seth Holehouse: Now, what about the money leaving the banks? This is something I need you to explain to me because as that article continues, we have a different graph to look at as well. It goes in and talks about how almost 1,000,000,000,000 in assets sold not purchased across these four massive banks, Citadel, JPMorgan, Wells Fargo, Wells Fargo, and BOA. So what does that mean that almost a trillion dollars in assets sold not purchased?
• 17:25
  Dr. Kirk Elliot: So that's just in this part of the same article. This is just the last six months as well, right, since Silicon Valley Bank went under. So what that tells us is Citadel Securities, forty five billion dollars of funds have left that fund rather than gone in. So it would be a positive if people are investing. They're growing their asset base.
• 17:49
  No. It's not that. It's the opposite. This is money leaving the system. JPMorgan, I mean, look at that.
• 17:56
  300 and plus billion. Wells Fargo, hun hun you know, 80 something billion. Bank of America, hundreds of billions. I mean, just those four. A trillion dollars in just those four of money that's left the system.
• 18:13
  So if it's left the system, those are deposits leaving. That's people having to take money out to live on or or it's the fed pulling money out of the system so that capital isn't there to lend out. Right? Because these are all big. These are all Federal Reserve banks, and they're they might be just be pulling capital out of the system in preparation for a digital currency because you can't have paper currency and digital money, you know, running concurrently with you know, parallel to each other.
• 18:43
  You've gotta get rid of one for the other one to be able to give room for the other one to be born. Right? So so this, I think, is a double edged sword. Part of it is probably just the fed pulling money out of circulation to get rid of paper currency altogether. And the other one is actually people just having to withdraw money so they can live on, so they can pay their bills.
• 19:04
  And it's not being redeposited back because it's simply just not there. So this to me shows capital crunch. This shows me a liquidity crisis more than the previous example did because this is actually M2 money supply. This is M2, which is checking accounts, savings accounts, money markets that are in a bank, it's the highly liquid stuff. Right?
• 19:30
  That's all leaving the building. It's gone. These banks are shrinking in size. That's that reeks of a capitalization issue where they don't have enough money, especially when you've got defaults now hitting of loans across the board. There's money net basically withdrawals rather than net deposits.
• 19:49
  This is a sign of of massive danger, thin ice moving ahead.
• 19:55
  Seth Holehouse: And so do you think that so a lot actually, I'll pull back because I have question about it in comparison to something else that I wanna pull up. So we hear this saying almost a trillion in assets sold and not purchased. So let's just say that hypothetically that I've got, you know, a million dollars with Citadel securities, and they're managing that money for me. And they might let's just say they have that hundred thousand dollar or so that million dollars they have it invested in Apple stock or whatever it is through the right. And so what this means in this particular instance is that I call them up and I say, Okay, sell my position in Apple, and I pull all that money out, right.
• 20:32
  So it's kind of like it's it's the deposits and the checking and the money, but also the assets. So the people this is people pulling their money out of this system. Whereas so we also have let's see this right here. Also coming off of Twitter. This is from the Kobasey.
• 20:53
  Is it Kobasey? I'm not sure how to pronounce that. The Kobasey letter, which says Yeah. Since the Fed started actually, okay, this might be just slightly before that terms of numbers, it's almost a trillion dollars again. So since the Fed started raising interest rates in March 2022, a record $862,000,000,000 in bank deposits have been withdrawn.
• 21:14
  The previous record was 70,000,000,000 in the two thousand and eight financial crisis. That means that 12 times the deposits leaving the banks in 02/2008 have been withdrawn in the last one and a half years, All while the regional bank crisis led to the second and third largest bank collapses in US history. So here's a graph, and I apologize for the audio listeners only, but this so that green line is showing the change in bank deposits from peak and it's going back to 1973 and you can see highlighted and they kind of show those those gray lines, I think are showing the different financial crisis is where you see that a financial crisis is always kicked off or in the middle of it, you have money leaving the banking system, you can see that within. But then the decline that happened in 2023, it's like the whole thing just fell off of a cliff. I mean, that to me is like, that's a that's bad news, right?
• 22:16
  Dr. Kirk Elliot: Well, it is. To me, that chart for all those who can't actually see it because it's audio only, it looks like a side view of the Grand Canyon. Right? It's like this flat top. It's pretty static for the last forty years.
• 22:28
  It's just kind of mainlining. It's just kind of this there and you have blips every once in a while. And then it truly is an order of magnitude just falling off a cliff. Right? So higher rates are changing the world.
• 22:43
  Yeah. Higher rates are changing the world. This is money leaving the system. Why? Because people need money to live on.
• 22:51
  Right? They're pulling out they don't have excess money actually to actually start having a savings account and things of that nature, excess in your checking account. This is net withdrawals where there's more money coming out than is going in. Well, when you add that to banks, investments aren't doing very good, right, because they invest in the same thing we do. They own a ton of commercial real estate, residential real estate companies, stocks, bonds, mutual funds, it's like, oh, especially bonds.
• 23:25
  So bonds, the value of those bonds comes down as interest rates rise. That portfolio is just just falling to the bottom of the ocean. Right? Real estate is tanking. Commercial real estate's even worse than residential real estate because it precedes collapses in commercial real estate always precede collapses in residential real estate because that's the ones that have the jobs.
• 23:48
  Right? So so you're seeing all of this starting to happen at the same time. No wonder you've got people leaving the banks, taking money out, plus the investments that the banks actually have themselves. It's a double whammy. That's why I think banking failures right underneath our nose.
• 24:07
  I think we're going to see just like CDC and World Health Organization are talking about COVID two point zero. It's going to be worse than the first one, right? We have to be aggressive on fighting it. You know, it's coming. Travel restrictions, shelter in place, masks, blah, blah, blah.
• 24:25
  Unless you're Dionne Sanders at the University of Colorado saying, hey, see you. If you actually have mask mandates, not going to comply, just so you know. And what are they gonna do at that point? You know, number one, you know, most highest rated college program in football for TV wise, I mean, it's all the excitement. It's all the rage, and the university is bringing in a ton of money.
• 24:48
  And and finally, you've got the coach that's like, well, we're going to say no to these mask mandates. Right? So what happens is in all of this, you start to see revolt. You start to see new ways of surviving and thriving. Because if you have banks that are on the poise, you know, right on the precipice of failure, falling off that cliff, what are you gonna do, Seth, in your own mind?
• 25:15
  Right? Just like every viewer out here, it's like, is my bank next? Is is my bank on that list? Should should we actually minimize our cash position? Let's start pulling some out.
• 25:26
  See, it's a snowball effect that starts to happen. Just like it's the snowball effect, and I know I use this illustration of college football because I live in Colorado, and we're glad that CU has finally a winning program. But here's why. Perception is reality. So college football changed its rules where now college players can make money based on advertising, based on their name.
• 25:51
  Right? So, like, the the quarterback of CU now drives a Maybach, made 3,800,000, right, in college. So what's that going to mean moving forward? Are you gonna wanna go to some small cool school where your coach isn't doesn't have the PR that that Deion Sanders does? It's like, no.
• 26:12
  I bet next year is gonna be the highest recruiting year ever, the best players ever, because they've got this coach that's in the limelight all the time, and they all wanna make money. So when you've got these stories of of bank failures, it's perception is reality. People are gonna say, oh, I'm going to I got to get out. I've got to get I've got to go into something good. And now you're seeing the AI frenzy start to kind of hit the skids a little bit.
• 26:39
  Right? It's like, is this a bubble that's about to burst? People are going to start to pull out. Here's where these banks' malinvestment when added to the actually withdrawal of funds from those account, I think banking crisis two point o is gonna be infinitely worse than what we saw in March.
• 26:59
  Seth Holehouse: So one question I'd love to hear your thoughts on is, so I interviewed Cliff High recently, who's I'm not sure if you follow Cliff, but he's he's a genius. He has some wild ideas, but he's a genius. And I love talking to him and following a lot of what he talks about. And we were talking on this and I mentioned, I may have even brought up that exact chart that we I showed you, this one, which showed, actually I think, no, I lost the place, it's like I'll go back to it. But the chart that showed the money leaving the banking system and talked about how nearly a trillion dollars had left.
• 27:31
  And he made a really good point, he said, look, you know, of paraphrasing, like every dollar that you put into a bank, so let's just say that was a trillion dollars that left, Every single one of those dollars, okay, we look at the reserve requirements. So that $1 might actually be turning into a hundred dollars or a thousand dollars within the banking systems, but then you get into it, okay, that's at the fractional reserve level, but then you get into the derivatives, right? So the money coming off of that, so it's almost like in the same way that they've taken our money and they've taken a dollar in the bank and turned it into, you know, probably $10,000 worth of derivatives and all kinds of crazy Babylonian money That's the point that he made. He goes, it's not just a trillion dollars has left the bank, that's a trillion dollars they can't use their system to turn into 10,000,000,000,000, 30 trillion, a hundred trillion, etc. Right?
• 28:28
  Because he's he's like, it's way more significant than people think.
• 28:33
  Dr. Kirk Elliot: It yeah. So when you look at the amount of debt, like the total national debt of The United States is like 32,000,000,000,000, that's dollar for dollar, right? That's money that we actually went in debt with. But banks highly leveraged derivatives debt. To make it real simple, just say derivatives debt, it's like leveraged to debt.
• 28:54
  It's leveraged at about 20 to one on average, right? So which means for every Let's say you were betting that the stock market was gonna go up and it's leveraged 20 to one, but the stock market actually goes down 5%. So if it's leveraged 20 to one and it went down 5%, you just lost a % of everything you put in, right? It's five times 20 is a hundred. So if it goes down 10%, right?
• 29:23
  And it's like, dude, you leverage 20 to one, you just lost 200% of what you got put in. You have a margin call, right? Well, at some point, how much derivatives debt do we have globally? It's hard to measure it because it's so much, but it's somewhere between 3 and 7 quadrillion dollars. It's more than q.
• 29:45
  Well, that's way more. That's like a thousand trillion is a quadrillion. I mean, that's a lot. Right? So that's our total derivatives exposure globally is 3 to seven quadrillion.
• 29:54
  I tell you what, when that bubble burst, there is no bailout in the history of the world that could actually bail that out. That's a that's a system that can't be bailed out. It's like complete collapse of an entire monetary system, which is why I think the banks now are actually betting against central banks and betting against the US dollar, which has all this debt, looking more towards BRICS nations, looking towards central bank digital currency as a way to hopefully fix this stuff. So when you there was to me, I think the worst there's two really bad things that are gonna hit the banking sector and The US economy moving forward. Number one, it's a housing collapse for the reasons we just discussed.
• 30:39
  Number two, inflation's not dead. True. Inflation is not dead. We're we're going to see a reemergence of it probably within months because Biden basically got rid of our strategic oil reserve. So he's been spending it using it.
• 30:57
  Right? So we haven't had to buy oil for a while to fulfill that for a long time. Well, now it's almost empty because he's he's used it all. So now what? Now Saudi Arabia, I think, is is conducting economic warfare one zero one in a brilliant way.
• 31:13
  It's like Trump playing chess. Right? That's them. It's like, okay. Always thinking seven moves ahead versus Biden playing chess, not even playing chess.
• 31:23
  He's playing checkers. Right? It's like wrong game. Right? So so it's like Saudi Arabia, when they realize we have to replenish our strategic oil reserves and they what are they doing?
• 31:33
  They're cutting supply, which is gonna cause the price to go through the roof. So almost everything that we use in this country is has petroleum based products in it still. Right? So what's gonna happen? Inflation is gonna rear its ugly head.
• 31:48
  It's gonna go through the roof. And that's gonna be really bad for us because we're not oil independent. We're dependent on The Middle East for our oil. And when OPEC cuts production, the prices go through the roof. What's bad for us is really good for the BRICS nations.
• 32:05
  Why the BRICS nations? Because they just added six of the nine largest oil producers in the world into their consortium of of countries. Right? So so when we're talking about economic bad news, devastating to America moving forward because our petrodollar status is gone. Our reserve
• 32:23
  Seth Holehouse: currency Fearmongering. Because there's people that will say, oh, this is fearmongering and say the banking system is gonna collapse. I mean, this is this is what I think of as just taking a sober look at the facts. And the thankfully, we're not trying to decipher some, you know, kind of wild theory that you can't really base in reality. Mean, this is numbers that you know, money and charts and numbers, it's one of the easiest things to look at without having to pull emotion into it.
• 32:51
  And so when you look at all this together, and I'm gonna be doing a show I think later this week, I'm having John Perez on, a good friend of mine, to talk about real estate because he's on did a lot of, you know, spent a lot of time in real estate, and we just went through the process of selling our house. We just closed on it, which was which was great. I feel like we got just out in the nick of time, And everything that I'm hearing, everything I'm seeing about the housing industry is showing that it's it's hit the peak and it's not it's sharply dropping. Inventory is drying up. No one's selling.
• 33:19
  No one's buying because the interest rates are too high. And so, but when you add all this together, because this is this is the important part, and this is why I think it's I really enjoy having you on is because we're able to take this complex stuff and kind of simplify it down into what does it mean? What does it mean for the average American that is already struggling, already struggling to, you know, pay for gas, pay for childcare, pay for taxes, you know, pay for their their rent, which has gone up or pay for their mortgage, which is, you know, they maybe they bought a house and they're now they're at 6%, right, or 5%. So the average person is looking at this and they're seeing that, okay, these charts of delinquencies going up, these charts of money leaving the system, these indicators of that the bank, you know, the banks are shutting the branches down. Like, are these indicators that you're seeing that are telling you that we're getting ready to, again, I'm not sure what the timeline is, but that basically all this is pointing towards something like 02/2008 into crisis, worse than 02/2008?
• 34:27
  I mean, what what where where is the ship going?
• 34:31
  Dr. Kirk Elliot: I would say worse. It's gonna be like 02/2008, except significantly worse. I mean, that chart that you had shown earlier that because the magnitude of the downturn is so much bigger, there's so much money that's leaving, there's so much more debt now. Right? When you have raising interest rates and so much more debt, that's a multiplier effect.
• 34:55
  Right? That's not an additive effect. That's a multiplying effect. So I think what we're going to see is something infinitely worse than 02/2008 by, I don't know how much worse, just substantially worse, where people after this downturn has done, they're probably not even gonna remember how bad 02/2008 was. It's like a distant memory.
• 35:18
  This one's gonna be nasty. And the only reason I said I don't wanna be a fearmonger. I don't wanna be a prophet of gloom and doom. I would rather everything else were different. Right?
• 35:27
  But but yet it's not. We're not the policymakers coming up with these policies that are actually causing this. We're just reporting on it and offering a solution. Right. So the solution is you get into tangible assets.
• 35:42
  It's not paper that do well during times of inflation. You know, bonds do horrible during times of rising interest rates, which is the mechanism to slow down inflation. You know, most equities don't do good during times of inflation. If it's the inflation that we're seeing by printing money, so you can have a good inflation. A good inflation would be rising prices because the economy can sustain it and everybody's working.
• 36:08
  Right. That's actually means a growing economy. The kind of inflation that we're seeing right now is rising prices due to printing money like there's no tomorrow because Americans aren't funding it because there's wage reduction. So when wages don't keep up keep up with the rising flat prices, that's stagflation. That's what we saw in the late seventies.
• 36:29
  That was, like, terrible. This one's worse than that. So if you had inflationary prices and your wages were keeping up with it, you wouldn't even know the difference. It's just a growing economy. That's not what we have now.
• 36:42
  The the price discrepancy to wage discrepancy is at an all time massive chasm in between the two. And this is why I know that this is gonna be significantly worse than 02/2008. Wages are not even close to keeping up with inflation.
• 37:00
  Seth Holehouse: And that's, guess that's what you're seeing too. It's like why, like I was talking to a buddy, over the weekend who's moving back to his home country in Europe and I thought, I know he loved it, was like, why are you, you know, why are you moving going back? And he goes, look, he goes, my fixed costs every month are $7,000. Heating and cooling, you know, electricity, childcare, you know, just his, you know, property taxes. It's like, those are missed, but the fixed costs every month, $7,000.
• 37:31
  He said, My wife and I both have to work full time just to get by. And that's what's crazy is that, I mean, growing up, it used to be that, let's just say that, you know, someone was making $40,000 a year, that was a healthy salary that you could raise a family off of. But now if you look at a lot of these costs, even someone that's making a hundred thousand dollars a year as a household, you know, obviously, you know, people can downsize and you could be living in a trailer and okay, maybe your fixed costs go down and you can get by, but it's like that's not how it should be in America that the average person is having to live in a trailer to get by, but the the prices just they're just going up. Everything's getting more expensive. And so what is so do you think that how will the government counteract this?
• 38:17
  I mean, you think that they're just going to keep printing more money and as they print more money to try to, you know, kind of, know, inject money into the economy and make it seem like it's healthy, that that's going to further cause inflation to spur? Or what is the solution? Or is there no solution? Is this is the solution that the whole system has to break and something new has to emerge because it's at the end?
• 38:43
  Dr. Kirk Elliot: I think that that ladder, that is the ultimate solution. They're just gonna let it break because you look at the two ways that they can slow down inflation. Number one is jack up interest rates really high. So the cost of borrowing goes up so people can't afford to borrow, and that will ultimately lower demand for things and prices come down. Well, you can't actually lower rates because that would cause more inflation.
• 39:09
  But if you raise rates too high and we have all this debt, it's it's a problem. But but the worst problem is massive price increases, so they're gonna continue to raise rates. The other way that they can slow down inflation is by stopping printing your money. Well, they're not gonna do that. They they simply won't because it's the only thing keeping the economy afloat right now, especially after the BRICS nations rising up are taking demand away from the US dollar as the world's reserve currency and as the petrodollar.
• 39:38
  That means we have to print money to fund all of our expenditures. There's no built in demand. So they're not gonna stop printing money. Actually, they're gonna increase the printing of money, and which means they're gonna have to keep raising rates. To me, there's no there is no solution other than just letting the system break, and it's replaced with something else.
• 39:59
  And so Kirk, that's so cataclysmic. It's like every reserve currency throughout the history of time has gone through this. They never last forever. You know, we've only been the reserve world's reserve currency since 1944. Prior to us, it was a British pound sterling.
• 40:16
  Prior to that, it was like the the Dutch currency. Prior to that, it was like the Portuguese currency. I mean, so you go back in time, there's always been a reserve currency, but they always squandered their time in the sun, flood the markets with too much of that currency, and they have they're forced to change. We're just happened to be alive during that time. It's not that I'm trying to be a prophet of gloom and doom.
• 40:36
  I'm trying to explain reality of how macroeconomics works. We've got too much of our dollars out there floating around. The rest of the world no longer wants it. The only fix is to actually change the system and who the world's reserve currency is. That'll actually kind of fix the system.
• 40:55
  But who does that hurt the most? The people who are the world's reserve currency happens to be us. It'll change our way of life forever, right? Which is why once we understand that, we navigate through it by allocating properly to take advantage of those trends that happens to be on this type of a scenario tangible assets like silver or gold, right? But I would do silver.
• 41:20
  When we're not at this stage, like what we were just normal corrections in the past, you know, the stock market gets overheated, it corrects. We'll buy stocks on the big huge dip like we could have in 02/2009, like we could have in 02/2002 after the tech stocks came down 80%. Right? During Reagan years, during Trump years, the stock market boomed. And if he bought in on those dips, the fundamentals of the market would cause its growth.
• 41:46
  The fundamentals of this market are just fundamentally different. This debt bubble is global. It's not tied to just any one sector. It's not even tied to any one country. It's a complete system monetary change globally.
• 42:03
  And the only way to navigate through that kind of chaos is with gold and silver. It really is. I mean, throughout time, it's always been that safe haven investment. When everything else seems to be failing, people are always going gold or silver. That's why nations have fought over it, why kings and kingdoms have fought over it.
• 42:22
  Right? It's the pathway to peace in your financial portfolio. But it's not the financial peace forever. It's during times of transition, right? At some point, we'll lock in our profits, go back into something else.
• 42:37
  But and maybe that's something else's stocks. Maybe that's something else's bonds or interest rates are sky high. We don't know. What we do know is that there always is an exit. We just don't know what it is until it's in front of us.
• 42:49
  Seth Holehouse: And that's a really important point, because I think most people that watch these interviews obviously know that you are a fan of gold and silver. But the question is, is like, okay, does that create this bias where the only solution you see is gold and silver, right? Because we want this to be a program that's helpful for everybody, regardless of what their position is. And, you know, and like, I've heard some people telling me, say a year ago, you know, people were saying, look, put money into real estate, right? Pull your money out of the system.
• 43:17
  And they're also recommending precious metals, most people will at least have that as part of what they recommend, it's precious metals, but there's the at that time, they're saying, look, put money into real estate, put me into real estate. Well, I what we're now seeing is that real estate prices dropping. Like imagine in 02/2007, someone was like, you know, put your mind into real estate and you're like, oh, okay, great. I'll put half my portfolio into real estate. Look what happened.
• 43:39
  And so, you know, you've been following these these ups and downs and these dips and look now, look, if it was 02/2009, you might come on the show and say, look, right now is the time to buy real estate. It's it's hit rock bottom 02/2010, like put money into real estate, it's only going to go up. So it's not that you necessarily it's more so that you're looking at the broad picture. And just through your own analysis, there's so many different investment vehicles that maybe made sense at different times in history. And because but because the whole system is breaking, and I think the key question everyone should be asking right now is, how can I ensure that I can maintain the current wealth that I have through the break of the system?
• 44:26
  Because a lot of people will lose everything when the financial system breaks. A lot of people lose everything when there's a collapse or a crash. So question is how to make it through. It's really that what you're seeing, just based upon historical data and the markets and the rates and everything is that there's just not a lot of options that you feel confident in even recommending.
• 44:50
  Dr. Kirk Elliot: No, I mean, there I look at the ratio, the ratio between silver and gold, how much silver does it take to buy one ounce of gold. Today, that's 80 something to one. So I'm a % into silver. When we come down 60 to one, that's 25%. We'll make my allocation then to probably be 75% silver, 25% gold.
• 45:09
  When we're at 40 to one, means silver continually outperforming, we're fifty fifty. Right now, there's also times when we'll be a % gold. There's times when we're gonna probably wanna be in equities, right, during that time, like during the Trump years, the first three Trump years stock market was booming. During most of the eighties and nineties, gold and silver made no sense. Gold went from $250 an ounce in 1982 to about $2.58 in 02/2002.
• 45:39
  In twenty years, it went up $8. That's not a good investment. But what boomed during the eighties and nineties? The stock market went through the roof. Right?
• 45:48
  So it's not that I'm against them. And real estate went through the roof because interest rates were in decline. Right? Interest rates went from a peak in 1983 to its low point about eleven months ago. So rates have been coming down for the last almost forty years.
• 46:05
  So that meant real estate should have boomed. See, there's a time and a place for everything, and our goal is to be wise stewards with what God's given us, understand the trends so we can take advantage of them simply so they don't take advantage of us. That's our goal. Certain times in history require certain things to minimize your risk and maximize your return. Right now, because of where we are geopolitically, economically, stocks and bonds make zero sense to me.
• 46:33
  Gold doesn't even make sense because of where we are with the ratio between gold and silver. That's why I'm a % in silver. But it's not gonna take much for silver to outperform 25%, and we start putting gold back into that mix. This is what we start helping people navigate through right place, right time, time to buy, time to sell, time to lock in profits, time to get out completely. Right?
• 46:58
  There's a time and place for everything. This is what we excel at is that relationship piece of that. To me, Seth, the transactions are bookends. You have to buy to get into a trend, you sell to get out of one, But life happens in between those two transactions. That's where we thrive on on letting people understand the why and why we do what we do because that piece starts to melt away the financial anxiety that people have.
• 47:26
  Once you understand why you're doing what you're doing, why you're positioned the way that you are, now you've won because you're in the right place at the right time, and you understand why. That's our goal as a firm.
• 47:37
  Seth Holehouse: What's also crazy is that in this equation, you know, say ten years ago, so you're seeing now with your financial advisor, they might be saying, Okay, well, we've got stocks or real estate or and they're looking just at the financial performance, but we've also got this whole other thing of our financial liberty, and our financial freedom. And the, you know, things like Central Bank Digital Currency or BIS, the Bank of International Settlements with a unified ledger, where say you put all your money into real estate, they've told us they're going to be putting those assets on the blockchain, so they have a unified ledger so they can track it and control it. So that's a whole other aspect of this that I think a lot of modern day financial advisors don't even get is the fact that there's this New World Order plan to enslave us and using currency as one of those tools for enslavement. So like that also, you know, comes into the equation. That's why for me, it's like, well, you know, if you're to the point where you're going and you're digging through my backyard to find my buried silver, it's like society is at a much worse place than I expect we'll get to, right?
• 48:41
  But you know, can I expect they're gonna seize a bank account or seize a 401 or you know, force convert it into central bank digital currency? Absolutely. Right? So, I mean, what do you think about that?
• 48:56
  Dr. Kirk Elliot: I think they will use a collapse like this manufactured or non manufactured, just a regular natural collapse to bring in their change that they want. I mean, is is Rahm Emanuel. Right? Never let a good crisis go to waste. So they're just waiting.
• 49:14
  Nobody would want what they would have, which is a government run digital bank that has the ability to cut you off from buying or selling. I mean, that's not a good selling point. I mean, it's awful. And nobody would say yes to that outside of a big huge crisis where all of a sudden even that makes sense.
• 49:32
  Seth Holehouse: Exactly. Exactly. Well, Kirk, we're at the top of the hour. Just before we sign off, if folks if you want to get a hold of Kirk or his team, we have a URL set up for you just goldwithseth.com or just call (720) 605-3900. If you go to the website, you just scroll down and there's just a form, you plug in your basic information.
• 49:54
  And how Kirk's team works is they set you up with one of his advisors, his wealth advisors, where they talk through things and really understand what's best for you because everyone has unique situations. So again, goldwithseth.com 7 2 0 6 0 5 3 9 0 zero. The information is also in the description. Kirk, it's always fun having you on and it's great because I get so much positive feedback on our interviews. People are just like that it's because I think that you're a regular and actually from now I think my goal is to publish every Wednesday is when this interview always publishes every Wednesday.
• 50:28
  But people love you and I get a lot of positive feedback of people emailing me saying, Look, I called Kirk, I talked to his team, they helped me, they even explained things to my husband who didn't want to listen, they helped the whole process and it's nothing but but positive comments, which is just it's good. That's why I'm comfortable and confident in working with you and having our our relationship.
• 50:51
  Dr. Kirk Elliot: Well, thank you for those kind words. I really appreciate them. And I love my team. I know I'm biased, but I have an amazing team that make me a better person.
• 50:58
  Seth Holehouse: You do. Well, thank you, Kirk. I'll see you again next week.