Latest / Financial Survival Network / National Debt, Central Bank Digital Currencies and Cryptocurrency with Robert Kientz #5981

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National Debt, Central Bank Digital Currencies and Cryptocurrency with Robert Kientz #5981 · Financial Survival Network

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You know the pressure to dedollarize, and you know the World Goal Council coming
0:04
out with that survey late last year of all the central banks and the Central
0:08
Bank saying we're dropping dollar reserves and moving to other forms. So dollar reserves
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should come down the next five years to about forty forty five percent. Other
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currencies will emerge. I think gold is taken center stage. There's a lot
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of talking about gold in the financial system, a lot to talk about the
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Central bank, digital currencies and what that changeover is going to look like.
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and welcome. You are listening to and watching the Financial Survival Network.
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I'm your ost Carrie Lutz. Hey here, we're almost midway through January.
1:02
Lots of stuff going on, for sure, and we're touching base with Robert
1:08
Heights to get to his view on what twenty twenty four looks like. So
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far, Robert, what do you think, what are you seeing for this
1:19
year? Well, I think, you know, being a gold silver guy,
1:22
there's a lot of standing on the sidelines that people with their money waiting
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to see what's going to happen this year. I think people are waiting to
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see this that FED really going to cut interest rates like they've hinted at,
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is inflation going to spart back up? We've had some inflation sort of peek
1:34
back into you know, the numbers. We're starting to hear layoffs have a
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I know people at work at City for example, and I don't know if
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this has hit the airwaves yet, but City's just announced twenty thousand layoffs to
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try to save two billion dollars over the next couple of years of the restructuring.
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And I think also had a recent do with Bannamick, so that's part
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of the restructuring too. And I think the banks. I think what we're
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going to see is the banks start to come under pressure. They're you know
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a lot of been what I've been reporting on the last several weeks has been
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the bank unrealized losses on assets is the highest has been in a very long
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time. Banks have had about almost a trellion dollars of commercial deposit money come
2:14
out. A lot of that's moved into money markets for the repo market,
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but there seems to be a little bit less liquidity in this If you look
2:22
at everything, there's less liquidity in the system, and that tends to affect
2:23
banks. I guess is what I'm getting at with the repo market, the
2:27
reverse repost coming down because interest rates are higher. With the amount of commercial
2:30
deposit money being taken out, with some of the underperforming assets, particularly debt
2:35
based assets, mortgage assets, student loan assets, I think the banks are
2:39
going to come under a lot of pressure. And I think that's probably going
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to be the story again this spring, just like it was last spring.
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We're going to see some more issues in the banking systems. Yeah, well,
2:47
we've never really stopped seeing them since this latest round. You looked at
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the emergency fund, which was quote unquote temporary, looks like it's becoming more
2:58
and more permanent. And the balance there, the collateral goes up every single
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week. That's not a sign of the healthy sector, is it. No,
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it's not. And you know it makes sense. We're in a debt
3:12
based system, so As you get a little bit longer into that system,
3:15
especially you go fourteen fifteen years between our sessions, Eventually what happens is debt
3:20
debt, and debt pressure builds up in the system. And I think when
3:23
you look at inflation, it really tied the hands of the banking system because
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inflation forced the FED basically to kick up its lending rate, and then also
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on top of that offer all of these other programs like the bank term Funding
3:37
program, getting involved more involved in the repo market to try to inject some
3:40
liquidity in there. I think what the FED is trying to do, along
3:44
with the FDI see the Treasury to some extent, it's trying to sort of
3:46
stabilize the banking system as we hit some rough patches. But I just don't
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know, depending on how the economy does this year, I don't know how
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how long the banks can go out there being some additional probably banking players,
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and I don't know to what extent or size we're going to see them that
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they're going to come under pressure. They're holding a bunch of debt that's underperforming
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right now, and the increased interest rate is not working in their favor.
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They're not able to offer, for example, increased interest rates to their commercial
4:11
depositors. So what we're seeing is an interest rate gap and people are hunting
4:15
for return and so that's that's costing challenges. So with the banks, I
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think it's caused banks and even any of these like pension funds, become a
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little bit more risk on with their methodologies for investing. And I you know,
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it'll be interesting this year to see how a lot of that turns out
4:30
in the financial sector. You know, how healthy was some of that investing
4:33
in the last few years hunting for a return? How did the commercial deposit
4:38
flight affect the bank's balance sheets. Is there enough bad debt between mortgage,
4:43
credit card debt, student loan debt, that and maybe even some you know,
4:46
foreign investments that's going to cause the banks to come under cash crunches.
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How much would the government have to get involved? I think that's probably going
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to be the story at least of the first half of the year. I
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would have imagine, Hey, and if you look at China, you're seeing
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unaddressed bank failures. They're like all over the place. People couldnt get their
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money out of banks that shut down. They don't even attempt to like show
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they're in control. You know, a lot different there than here for sure.
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Yeah. I think one of the advantages China has is they built up
5:20
that belt, their initiative in the bricks rate and all of those things,
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and so their economy is not doing particularly well by the way, I mean,
5:27
the real estate market over in China is an absolute mess. But they
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do have some advantages. They're not the world reserve currency. They it was
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an advantage. I think it's becoming an advantage. The dollars coming under a
5:40
lot of pressure and you know, the pressure to dedollarize, and you know
5:44
the World Goal Council coming out with that survey late last year of all the
5:47
central banks and the Central Bank saying we're dropping dollar reserves and moving to other
5:51
forms. So dollar reserves should come down the next five years to about forty
5:55
forty five percent. Other currencies will emerge. I think gold is taking centers
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to There's a lot of talking about gold in the financial system, a lot
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to talk about the central bank, digital currencies and what that changeover is going
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to look like. The BIS has a huge amount of information on their website
6:11
available by all the projects they've been running to implement the CBDCs, the FED
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isn't well. Even though the FED has said publicly we're not involved in this,
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their name is actually on some of those BIS projects and they're testing cross
6:24
border payments and things like that. So I think, Harry, what we're
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really seeing is sort of this realization that the existing system is sort of fading
6:31
away a bit, and then there needs to be a new system, a
6:34
new sword of Bretton Woods, if you will. And this time, however,
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I think the rest of the world's kind of taken into their own hands
6:41
and saying, let's help develop this system proactively rather than waiting for that other
6:46
shoot to drop with the dollar. And so I think the central bank digital
6:48
currency regime is sort of the response of the world to say, we don't
6:53
want one dominant currency, we want all of the currencies to trade around,
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but we also want more control over aggregate money supple and so I think that
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system has been engineered sensibly to sort of solve some problems with the dollar system,
7:06
which it looks like it maybe that's way out and a lot of what
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we see in our economy as a result of the you know, the trouble
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with the dollar, in the debt system. Sure. Yeah, well there's
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fun all over. But you know, these transitions don't just happen like so
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easily, right. It takes time, and it takes a lot of volatility,
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a lot of uncertainty, a lot of crashes. Right. Yeah,
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So but it looks like everything's crashing all at once here. Yeah. I
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think the three big pillars of our economy, you know, real estate,
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bonds, and stocks are all to some extent coming under pressure. Last year,
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The Dow, Jones and the Russell probably suffered the most. The smpn
7:46
ASTEC were okay to head end your rallies. But you know, part of
7:48
this, the manufacturing set of economy is completely cratered at this point. Yeah,
7:55
there is, you know, but within that, some people are repatriating
8:00
manufacturing or they're moving it from China to Mexico. So there is some move
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to bring some manufacturing back to North America, but it's not nice enough to
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recover, you know, what we had lost. The service economy is sort
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of holding served, but you can start to see pressure in that part of
8:13
the economy, and it looks as though the commedy is just weaken It looks
8:18
like we're going to typical recessionary phase. The real the big question is really
8:22
what is the Fed? How do they react if we're going to go through
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a multi stage inflationary recession like we went through in the seventies. Will how
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the FED responds and when they respond that really is going to determine. I
8:35
think how much pain we all sort of see here in terms of inflation,
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interest rates, and if the Fed, you know, if the FED can
8:41
ease, they will, but if inflation goes up, they're between a rock
8:45
and our place. You can't ease into inflation because you have to worry about
8:48
runaway inflation. You have to worry about easing into the economy that's already maybe
8:52
chugging too hard and needs to have a reset and needs to have you know,
8:56
some loss and some bankruptcies and things to clean things up. So I
9:00
think it's really hard for the Fed to try to cut rates. I think
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they're gonna be fighting increased inflation. They're gonna be stuck between a rock and
9:05
a hard place. But depending upon the timing of their moves, really is
9:07
how these other markets are going to react if we're still in a tightening or
9:13
even if we stay where we are, you know, with interest rates hovering
9:16
around treasuries four to five percent, you know, the federal funds rate over
9:20
five percent. It's gonna make it a challenging for growth. So they're going
9:22
to want to ease, but if we have inflation, it's gonna be difficult
9:24
to ease. So this year I think, like I agree with what you
9:26
said, We're gonna have a lot of turbulence. We're gonna have a lot
9:28
of wild swings that people try to figure out positioning and people try to figure
9:33
out they're hunting for return, where do I go in the market. You've
9:35
seen it in the gold market. Gold a few weeks ago hit a new
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all time high of like twenty one to sixty and it was on the Sunday
9:41
night open and and then the next few days it got slammed down by one
9:45
hundred and thirty hundred and forty dollars. So you're starting to see volatility in
9:48
that. I said, why because gold is a safe haven, So some
9:50
people are considering moving into it. Some of the market's not buying into it,
9:54
And I think that's what we're gonna see. But maybe five or six
9:56
threat months into the year, we'll kind of know how all the different asset
10:00
classes are going to do this year, But the really intertes thing will be,
10:03
you know, in the fall going into the election. In two thousand
10:05
and eight, we had an election and the economy didn't do too so well
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there, So will our coming hold up through the election. I don't know.
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It might, but there were so many problems in it that I think,
10:16
you know, the governmental powers of be are going to have a hard
10:18
time sort of managing that and making sure that they can keep that strong economy
10:20
heading it. Not to mention, the deficit's like totally out of control,
10:26
right, yeah, the dev I mean under Biden, you know, to
10:28
be fair, it's it's been bad since President Reagan. I mean it started
10:31
with President Reagan never present thereafter is added to the debt, right, It's
10:33
been that No president is or Congress has been immune from this. But the
10:39
amount of debt that we have now under this administration is just debilitating because I
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don't know how you recover from it. I don't how do you recover from
10:48
thirty four three, and how do you recover from the deficits at running?
10:50
And now we want to spend more on foreign wars. Yeah, at a
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time in which we probably need, if anything, to retract and get more
10:58
biscally responsible. Yeah, well, you make an excellent case for gold and
11:01
the loss of faith in the government. You know, Armstrong often says it's
11:07
not inflation that causes precious metals prices to increase, it's loss of faith in
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the system, in the government. We're certainly seeing that now, Yes,
11:16
we are. We're seeing a lot of you know, I think culture and
11:20
politically. What happens economically usually filters into culture and politics, and we're seeing,
11:24
you know, more pushback on the political system. Culturally, we're going
11:30
through a lot of changes. I think if you just generation generationally for a
11:35
second, the Baby Boomers and the wartime, the siland generations still have most
11:39
of the wealth in the country. My generation's doing okay. Gen X,
11:41
we're okay, But the Millennials and the gen Zers are not. You know,
11:46
the millennials are now getting into their mid to late thirties, so they're
11:50
not seeing the purchasing power and the wealth generation previous generations have. So part
11:54
of what I think this economic cycle is going to tell us is how do
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the new generation is fair? But how do the existing assets fair? If
12:03
you're sitting there and you're you're a little bit older and you've you know,
12:05
got your pension, your four one K, your real estate. Are your
12:09
asset value is going to hold up? Or is there going to be some
12:11
sort of well transfer you know, to other asset classes and who you know
12:16
is going to capitalize on that? Is it going to be the bitcoins of
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the world. Is it going to be gold and silver? Is there going
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to do? Raise that point? So bitcoin? Right, we got these
12:26
spot ETFs. Who knows if the you know, you've got to be so
12:31
skeptical at this point, even though it violates every law. But they could
12:35
be, you know, showing numbers that have no relation to what's really taking
12:39
place there. They could be buying buying these things, but they're buying them
12:43
through some other coin, stable coin, whatever, And how do you there's
12:50
there's so little transparency in the system now as it is with these ETFs.
12:54
And actually it's an et P. I don't know what the difference is,
12:58
but they're call it. They're not calling it an UTF, they're calling it
13:01
an et PHI, which sticks the fund. It's a project, maybe a
13:07
product, a change traded product. Right, are types of securities that track
13:15
underlying securities an index or other financial instruments, so they track it, so
13:22
they're not necessarily buying and holding this stuff, they're tracking it. It seems
13:26
to me it's a recipe for major manipulation in the crypto markets. Yeah,
13:31
a lot of the derivative complex, whether it be you know, I talked
13:35
about COMEX and the commodity markets all the time because I'm a goal guy.
13:37
But if you look at the entire derivative complex, it's a lever and the
13:41
system, and if you have enough money with that lever, you can move
13:45
the system around, so you can actually move pricing around. You can move
13:48
you know, pricing and availability of assets. Do you have enough power,
13:52
you can pick winners. And if you don't have enough power, you're probably
13:54
to patsy at the poker table or are you're probably losing your money. Yeah,
13:58
well we see this in the commodity markets all the time. The management,
14:01
the big financial houses, they have all the money in society, but
14:03
they get taken advantage of by the billion banks all the time who have the
14:07
information. And because the pockets up to this point of the managed money and
14:15
the financial houses had been deep, they could afford to lose money on some
14:18
of these derivative traits. But as things tighten up, I think what we're
14:22
seeing is there is a there's a bit of mistrust and anger and frustration brewing
14:26
at the system itself because the system, being the way that it is set
14:31
up, the way that it is, really is set to benefit the ones
14:33
that manage the monetary flows, and a lot of people who aren't benefiting from
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that are starting to say, wait a minute, we have issues with this.
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So you know, you've had the manipulation charge against one of the big
14:43
banks, JP Morgan, a nine or twenty million they had to pay for
14:46
manipulating treasuries and gold. You know, what's to say that the banks or
14:50
other financial houses aren't going to manipulate you know, bitcoin? And the key
14:54
question I have is I understand people that support bitcoin wanting the ETPs because it
15:00
will bring institutional investment and it may help stabilize They think it may help stabilize
15:05
those assets. But the problem is, wasn't bitcoin supposed to be this decentralized,
15:09
defied right decentralized finance, But are we putting it into the same centralized
15:15
scheme that everything else is. So I don't know what to think about that
15:18
in terms of whether I know it's going to bring money into bitcoin, but
15:22
is it going to make it maybe perhaps more manipulated and more unstable? Is
15:28
you know it's a they're even corrupting the blockchain here, Yeah, right,
15:33
even they said they couldn't do it. But all you have to do is
15:37
change the laws and financialized stuff, and I think you can pretty much control
15:39
anything. And I think that's going to be a surprise to some people.
15:41
Show you something that hasn't been financialized in Yeah, credit card receivables, you
15:48
know that they sell them off of all these things, and the banks had
15:54
just become arbitrageers basically, right, Yeah, arbitrager is and money changer,
16:00
so make money on the transactions. And yeah, also provide a lot of
16:03
the insurance. Well, the funny thing about the banks is they provide this
16:07
consulting and the money. So if you think about it, they do the
16:10
research reports to tell people what to get into. They handle all the money
16:14
for all the things that people are getting into. They move the prices around
16:18
on the things that people are getting into. So that should be your first
16:22
clue is anytime you try to ETF or ETP something, who's you know who's
16:29
going to benefit from that. It's always going to be the financial complex.
16:32
Yeah, I couldn't agree with you more. It's just it's like through the
16:36
looking glass here everything is so distorted and so you know, just volatile corrupted
16:47
all of that. So, hey, where we got two thousand gold now,
16:51
but we don't have a fifty dollars silver. What's ahead for the coming
16:56
year? Well, I think you'll notice, like in the way that you'll
16:59
know if the market believes in the gold story. A couple of confirming signals
17:03
are one silver in the mining stops. Silver briefly responded over twenty five but
17:11
didn't stick because I don't think gold's march up to a new all time high
17:17
was particularly There wasn't story around it, so it happened, but it kind
17:21
of happened quietly. It wasn't like people were paying attention. There was one
17:23
big event. It's not like credit sweeze the faulted and gold shot up.
17:27
It was just a flow, steady climb. So you know, the market
17:30
is self sent in. You know, gold very quietly had an all time
17:33
high. But you know, why would I want gold so silver? I
17:37
don't think silver is going to move about twenty five and into thirty and into
17:42
forty, until we have gold sitting in a new all time high about twenty
17:45
one fifty sixty and staying there for some length of time, maybe having monthly
17:49
clothes, or maybe there's enough news in the news cycle that people start really
17:55
thinking about gold in their own portfolios. But it's interesting, in the fourth
17:59
quarter of last year, we did have a little bit of recovering mining stocks
18:00
for the first time in years since really twenty twenty have the mining stocks started
18:06
to gain some momentum, And a lot of that's because the gold ones are
18:10
making money. Because gold at two thousand dollars, almost every projects making money.
18:14
Silver not so much. So you still have a lot of the juniors
18:17
and the smaller ones not making money, but the established companies are doing well,
18:21
so you see the gold mining industis indosses start to move. So I
18:25
think we've got interest in the gold space anywhere from getting an out of the
18:30
ground to buying the final product. But there has to be that story as
18:33
to why gold and silver really need to hit their last age, and I
18:37
think we're moving into the last age of this gold and silver cycle that started
18:41
around two thousand around the tech crash, you know, and gold has beaten
18:45
most of the stock market over the last twenty three years in terms of true
18:48
Yeah, it's above it by twenty three. Were saying that last by Look,
18:52
so it's priced in more of the risk of the system than the rest
18:56
of the investments have. But I think if that story around twenty twenty five
19:00
is more volatility, like we've been talking about some bank issues, inflation leading
19:03
up to the presidential election, any certain cultural and certain political geopolitical uncertainty around
19:08
what's going on in our country with riots or what's going on overseas with wars,
19:12
I think that will booye you know the case for gold, and I
19:15
think that's probably gonna happen twenty twenty four. I think gold for twenty twenty
19:18
four and silver are going to do very very well just because of that volatility.
19:22
And I think people are going to start rotating into those asset classes.
19:26
Yeah, I think you're correct. I agree with you, But we've been
19:29
waiting for this for quite a long time, and once it finally starts happening,
19:33
it's hard to believe that it's actually happening. But I agree with you.
19:37
I think it is happening here. Yeah, I think it is,
19:41
and we'll it'd just be interesting to see, Kerry, how far that rabbit
19:42
hole will go. You know the FED salg about soft landing. I don't
19:45
think you can have a soft landing. But how hard will the landing be?
19:48
I don't know, that's really the question I have. But I think
19:52
twenty twenty four is going to give us those clues. If twenty twenty four
19:55
is really volatile, and we do see more bank failures and the US continues
20:00
to spend without any sort of restraint, then I think you could say the
20:04
last have of twenty twenty four twenty twenty five are gonna be very interesting.
20:07
Interesting may live in interesting times, as the Chinese are so fond of saying,
20:14
Hey, Rob, it's been great having you on here. Just to
20:17
tell us where we find you, how we connect with you on the web.
20:18
Yeah, So I run the website www dot Goldsilverpros dot com. That's
20:23
an online bullion shop as well as a blog, and we have social media
20:27
on YouTube and Twitter as well. You can find us there. We do
20:30
videos every week and we basically we're a research channel. We put a lot
20:33
of research out around macroeconomics and the economic cycle, investing and in golden silver.
20:38
So you can find us just anywhere popular social media. All right,
20:42
very cool. Hey, got a question from Robert or myself, Shoot me
20:45
an email kl at kerrie lets dot com. You'll find the link right to
20:51
a site in the show. That's this interview on Financial Survival Network dot com.
20:55
And please take advantage of a free newsletter, send it out weekly,
21:00
sometimes a little more. Robert, it's always great having you on and we
21:03
will talk to you again real soon. Thanks so much, Gerry appreciate it.
21:06
Thanks for listening to Carrie Lenz's Financial Survival Network, your solution to today's
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