SURVIVING AND THRIVING DURING THE GLOBAL PANDEMIC OF … · 2020-07-10 · 2 Surviving and Thriving...

SURVIVING AND THRIVING DURING THE GLOBAL

PANDEMIC OF 2020Surviving and Thriving During theGlobal Pandemic of 2020, Part 14

Featuring Jim Rickards

ADDISON WIGGINHOSTED BY:

FEATURING:

JIM RICKARDS

Addison Wiggin is the founder of Agora Financial and the Financial Reserve. He is also the best-selling author of Financial Reckoning Day; Empire of Debt (with Bill Bonner); The Demise of the Dollar; and writer and executive producer of the documentary I.O.U.S.A., shortlisted for an Academy Award.

James G. Rickards is the editor of Strategic Intelligence, Project Prophecy, and Crash Speculator. He is an American lawyer, economist, and investment banker with 40 years of experience working in capital markets on Wall Street. He is also a best-selling author of Currency Wars, The New Case For Gold, and Aftermath.

Addison:

Jim:

Welcome to Surviving and Thriving During the Global Pandemic. This is part 14.

We have with us today Jim Rickards, well known to you all. Jim is the editor of

Strategic Intelligence, and we’ve been working together now for seven or so years.

And Jim has made some of the more prescient forecasts in those seven years that

have helped guide Reserve members, and also those who read through Paradigm

Press. I’d like to welcome Jim. Welcome. You just moved into a new condo, you were

just telling me?

Thank you, it’s great to be with you up here in Portsmouth, New Hampshire, our state

motto is Live Free or Die, so I subscribed to that.

Who Wins the Election… President Trump or Puppet Biden?

https://paradigm.press/publications/awn/

https://paradigm.press/publications/rit/

https://paradigm.press/publications/cwa/

2

Surviving and Thriving During the Global Pandemic of 2020

Yeah. Well, I grew up in New Hampshire. Actually, not far from there, about eight

miles from there. So I know the slogan.

One of the things that we do in Strategic Intelligence is every Monday we send out

what we like to call Five Links, and you comb through the news and you look for

articles while you’re doing your research, and while you’re thinking about the way

things are unfolding during the pandemic, and just in general, the markets. The last

time you were on, we talked a lot about the deficit spending that was going on, the

rise of the national debt, those kinds of things.

But while you’re doing your research, you also come up with a number of interesting

themes that we may or may not want to dive into moving forward. And then we send

those out every Monday, it’s five links and it links directly to the articles, but then you

put it into perspective.

So today’s going to be kind of fun because we’re going to do a virtual Five Links, and

we get to hear from Jim directly, as he puts these different themes into context of

what’s happening in the markets, and with the Strategic Intelligence Portfolio.

So I’m going to just jump right in. I’ve been writing this headline in my head, The

Man who Predicted a Trump Win in 2016 Now Predicts a Biden Win in 2020. Do you

want to characterize that? That was from last Monday’s Five Links.

I wouldn’t go quite that far. I have a model, and it’s a predictive analytic model, and

it’s the one I used in 2016 to predict the Trump victory. And I actually did that on a

network broadcast on three different continents, I was in Australia, Europe, and in

New York. And I happened to be on a book tour at the time, one of my books, The Road to Ruin was just coming out at that time. I was traveling all over the world to

promote the book. but the TV anchors were all, “Jim you’re American, tell us who’s

going to win the election.”

And I said, Trump, I said it categorically, it wasn’t like a wishy-washy thing. I had

a very good reason to believe that it was true. But the context is important because

at the time the polls were giving Hillary Clinton a 92 or 93% probability of winning.

She was ahead in the polls. The betting odds were strongly in her favor. The TV

commentators were united, they were already discussing the Clinton cabinet, et cetera.

So it wasn’t just getting the forecast right, it was doing it in the face of overwhelming

Addison:

Jim:

3


sentiment from polls, politicians, pundits, and others, that this thing was in the bag

for Hillary. But the point I make is that I don’t claim to be smarter than anybody else,

but I do say we have better models. And if you

have bad models or bad polls, you’re going to get

the wrong result every time. But if you have good

models, you can get a pretty good track record.

And that’s what we were using.

And polls are part of it. That’s one of the things I look at, but I use a lot of anecdotal

evidence. And a lot of analysts don’t like anecdotal evidence, they’re like, “Well, you

can’t quantify it, you can’t stick it in an equation.”

But the point I make is, “Yeah, but it’s real people doing real things. What could be

more important if you’re talking about an election?” I actually took a Greyhound bus

from Spokane, Washington to a place called Moses Lake, Washington, which is in

the middle of the desert, east of the Cascade Mountains. And I don’t know too many

people who do what I do, spend three hours on a Greyhound bus, but I found it very

instructive because I could count lawn signs, and go through little towns, and get the

sense of the thing. And a lot else, I don’t need to belabor the point. So there’s a lot

that goes into the models. So right now, this may be disappointing, but I’ve got it at

50/50.

And that sounds kind of wimpy. It’s like, “Oh boy Jim, what good is that, 50/50?” But

in a scientific sense, we use a Bayes’ theorem, and what that means is that there’s a

high degree of uncertainty around it. We actually don’t know who’s going to win the

election. But here’s what we can say, it is going to be close and Biden could win. So

I’m not to the point of saying Biden will win, but I am at the point of saying Biden

could win.

And that’s important because the markets have not discounted that. Markets

supposedly look into the future, get everything right. And future events are reflected

in today’s prices, and you can’t beat the market, and just go along for the ride,

and get it an index fund and all that. That’s all nonsense, everything I just said is

nonsense. If markets try to look into the future, they usually get it wrong. It doesn’t

mean markets are dumb or stupid. It’s a source of information. You should use them

and pay attention to them. But the idea that the markets got this all figured out, it’s

completely wrong.

"If you have bad models or bad polls, you’re going to get the wrong

result every time. But if you have good models, you can get a pretty

good track record."

4


The markets did not see the 2008 financial crisis coming. They did not see the 2020

financial crisis coming. They did not see the 2015 collapse of Chinese equities

coming. Markets as forecasting tools get

it wrong most of the time. It doesn’t mean

markets are dumb. It just means that they don’t

work the way people expect.

But I can tell you categorically that today

markets have not discounted for a Biden

victory. And again, it’s close. So I’m not saying

Biden will win, I’m saying he could win. And if you asked me, “Is that reflected in

market prices?” The answer is no, absolutely not.

The markets have struggled to price in the pandemic, and they have struggled even

more to price in the depression. We’re in a technical recession right now, that’s sort

of been declared. My analysis is, “Yeah, I get it. But we’re actually in a depression.”

Which is a very different thing, much longer lasting, can even be intergenerational.

But the markets are struggling with that. And mostly not understanding what’s going

on, but they’re trying. But they hadn’t even thought about Biden. When we think

about Biden winning, if that’s what happens...

Yeah, that’s what I’d like you to talk about.

You’re talking about higher taxes, the Green New Deal, forgetting everything

that’s going on in China, and kind of sucking up to the Chinese again. And more

regulation, slower economy... you’re talking about really a disaster. And it’s much,

much worse than that. We can drill into it any way you like Addison.

But the prospect of a Biden victory should be

frightening. Not because he’s a little more liberal,

or he’s a Democrat or whatever, we go back and

forth between Democrats and Republicans... But

because his policies had moved so far to the left,

it actually would be the fulfillment of what is, I don’t even think of it as a socialist

revolution, I think there’s kind of a Marxist-Leninist revolution going on, a cultural

revolution going on right now. Biden would be powerless to stop that from getting

worse.

"The markets did not see the 2008 financial crisis coming. They did not see the 2020 financial crisis coming. Markets as forecasting tools get it wrong most of the time. It doesn't mean markets are dumb. It just means that they don't work the way people expect."

Addison:

Jim:

"I think there's kind of a Marxist-Leninist revolution going on, a cultural

revolution going on right now. Biden would be powerless to stop that from

getting worse."

5


And also Biden is mentally incompetent. He’s got some, I’m not a doctor I’ll just

declare that, but I can judge you and behavior, I’ve been around long enough, and

I know other experts who do say the same thing. He clearly cannot form cogent

thoughts. He cannot complete sentences. He doesn’t know where he is a lot of the

time. He gets lost in mid-thought. He gets facts wrong.

Those are not just gaps. I mean we’re, “Oh, you know Joe Biden, he’s always made

gaffes.” Well, he has always made gaffes, these are not gaffes, these are signs of a

serious cognitive decline, which accelerates with time.

Now, whether it’s early-onset Alzheimer’s, or early-stage dementia, or some other

deficiency. Again, I’m not the doctor, but I know that he will be removed if he wins;

he’ll be removed from office within a year under the 25th amendment as incapable

of fulfilling the duties of the presidency. When I say incapable, I don’t mean, “Oh,

gee, we don’t like your policies,” which is what they tried to do with Trump. Trump’s

mentally fit. You can like him or not like him, that’s fine. A lot of people hate him, but

no one thinks he’s mentally incompetent. They just don’t like his policies or his style.

But in Biden, it would actually be a medical issue, and the cabinet could convene

and remove him from office. So that’s important because when you hear the Biden

vice-presidential pick, which we expect in the coming weeks, he’ll certainly do

it before the convention, which is not a convention. The Democrats are having a

virtual convention, which means they’ll stage manage Biden’s appearances on

teleprompter, and with medication, et cetera. So that’ll just cover it up. The media

won’t report it because it’s not in their interest to do so.

So what you’re saying is that whoever they nominate as the vice president, we should

consider to be the president-elect?

Within a year, that’s exactly right. And this is all being very cynically manipulated by

the Obama resistance team.

So when you look at it, again, you have to do a deep dive on this, but how do you

remove a president under the 25th amendment? Well, you need the Cabinet to

vote to start that process. There are a few other steps, but basically it starts with the

Cabinet.

Who’s going to be in the Cabinet? Well, I can make a pretty good estimate. I would

Jim:

Addison:

6


say Sally Yates as Attorney General, Susan Rice as Secretary of State, if she’s not the

VP, she might be the VP, but if she’s not put in handcuffs by John Durham and the

next month... maybe Samantha Power as Secretary of State, you’re going to see all

these people come back, the B team of the Obama Administration is going to be the

A team of the Biden Administration. But the point is, they’re all going to be Obama

loyalists, they’re going to orchestrate the pick of the VP. The VP will be the president,

this will all be done within a year of Biden winning.

So my point is, there’s plenty of time to talk about that, we’re just kind of telling

viewers now, but my point is the market hasn’t thought about any of this. I’m telling

you what’s going to happen if Biden wins. And I’m telling you he might win. But

I’m also telling you the market isn’t ready for any of this. Which means that there’s

a huge opportunity for investors because the gap between the perception and the

reality is as big as I’ve ever seen it.

The story, the sort of mob idea of the Trump Administration is that he’s good on

the economy. And then we have the pandemic, and the economy gets shut down.

How much is that playing into the forecast that Biden would win? And then, if Biden

doesn’t win what can we see differently from Trump? I guess it probably depends on

how the pandemic continues to play out. But he doesn’t seem that concerned about

the massively increasing level of debt, which is a response to a crisis, I understand,

but it’s also something that we’re going to be paying for for a long time.

Yeah, not necessarily. We’ll talk about that, the debt is a very big deal. I agree with

you on that Addison. But I also agree with your first statement, which is that nobody

cares. And let’s talk about that a little bit too.

Here’s the thing with Trump. So you got Trump for three years in office, 2017, 2018,

2019, and then kind of through the first quarter of 2020... and then we have Trump

under the conditions of pandemic; two very different things.

So for the first three years and two months, let’s say, I would describe Trump as

follows. Yeah, he’s vulgar, he’s crude, he’s combative, he calls names, he blames other

people for a lot of what he does, and he has a lot of behavioral traits that people find

offensive even if you support him or like his policies, on the one hand.

On the other hand, he got everything right on policy. He confronted China at a

time when China needed to be confronted. In fact, I would’ve said that should have

Addison:

Jim:

7


happened 20 years ago, but maybe better late than never. He reduced regulation. He

reduced taxes. He got unemployment to 45 year lows, black unemployment, Latino

unemployment... all of those things were at the all time best results, meaning the

unemployment figures were the lowest, or put differently the employment situation

was as good as it’s ever been.

Inflation was under control. Growth was never as good as Trump and Larry Kudlow

were bragging. There’s a lot of happy talk, but it was better than anybody else. I’ll say

that. 2.2% growth is not great by US standards, but it was better than anybody in the

world, except for China. And China is a developing economy, the economics there

are very different.

So I would say Trump behaviorally kind of annoyed, well infuriated his detractors,

and annoyed even his supporters. And I would include myself in that category. But

his policies were spot on. Boy, did he get a lot of things right.

However, in the beginning of March, really late March, early April, 2020, I would

say the wheels fell off. And here’s what happened. I’ve always said, “If you want

to understand Trump, you got to spend time in Queens.” Queens, New York, this

is not Manhattan, this is not the Upper East Side, it’s not even Brooklyn. Brooklyn

people can kind of be a little rough around the edges, but they have enormous

accomplishments, they move on, and they kind of can leave Brooklyn behind.

Queens, you never leave it behind. There’s street fighters. The fighting starts in the

sandbox, and it never stops. And if you knew that about Trump, you would say,

people say, “Oh gee, I like Trump, but I wish he would stop tweeting.” Or, “I like

Trump, but I wish he was name calling.”

I say, “Get over it. The guy is 72, 73 years old”.

And 73-year-old guys don’t change. They don’t change. That’s probably been true

since he was 13, but at 73, I think we can count on it.

So get used to it. If you like his policies, stay with him. If you don’t like his behavior,

get over it, because it’s not going to change. However, all of the things that served

him well in the rough and tumble politics have not served him well in the pandemic.

And I just wrote a book on this, it’s with my publisher, it’ll be coming out in October. I

think it will be the first book that deals with the pandemic and the depression.

8


You’ll have a lot of doctors writing books or whatever, but I sort of tackle both

subjects. But I make the point that the virus doesn’t have any politics. The virus

doesn’t care. The virus wants to kill you. And that’s all the virus knows. It’s not a

Republican. It’s not a Democrat. It’s not red. It’s

not blue. You can politicize the virus if you want

to, but the virus is not political.

And Trump was actually lost dealing with a

crisis that actually wasn’t political. It became

politicized, but when you deal with a pandemic

there’s a different kind of leadership required.

You can’t go around picking fights. Actually, Americans don’t care about anything

right now, except the virus, and unemployment, they care about those two things.

Politics are third, normally an election year politics would be number one, and

Trump would be, again, being Trump, and probably... Well, until January I gave

Trump a 75% probability of winning. I had Trump on his way to 90% chance. I had

Trump as a sure winner. But the thing about the models is you have to update.

You have to be honest with yourself. That’s the hardest part. Just be really tough on

yourself. And you can’t make Trump a 75% favorite now, that’s impossible.

But my point is the things that served Trump well in the political rough and

tumble were really his undoing in a pandemic. Because he never understood, still

doesn’t understand that the pandemic isn’t political. So to see him in the White

House Briefing Room, standing up at the podium, picking fights with Jim Acosta,

or whoever else is in the White House Press Corps, the American people were

extremely let down. They’re like, “Really? We’re worried about dying. Our neighbors

are dying. My wife just got laid off. My husband just got laid off. We can’t pay the rent.

And you’re picking a fight with Acosta again, really?”

And so I would say he started out okay with the taskforce, Pence, Dr. Birx, I’m not a

big fan of Dr. Fauci... but they did a pretty good job. But by March it had degenerated

into this daily shouting match with reporters. And Americans just tuned out. They

said, “Well, we want leadership. You’re down in the gutter. That’s not what we want.”

And that’s when Biden really surged in the polls and Trump’s popularity approval

rating dropped, and his poll rating dropped. And he went from being kind of an-odds

on favorite to win, to being 50/50.

"The virus doesn't have any politics. The virus doesn't care. The virus wants to kill you. And that's all the virus knows. It's not a Republican. It's not a Democrat. It's not red. It's not blue. You can politicize the virus if you want to, but the virus is not political."

9


So then you say, “Well, why wouldn’t you say that Biden’s going to win?” The answer

is that Biden’s got his own issues, which we’ve already talked about, which is he’s in

serious, progressive and accelerating mental decline. And a lot of people who have

switched over to Biden have never heard Biden speak.

They know he’s a Senator from Delaware. They know he was vice president, and he’s

not Trump. So he’s like, “Okay, I hate Trump. So I’m going to vote for Biden.” Really?

Do you know anything about Biden? Have you seen him talk lately?

They won’t let him talk. They literally won’t let him out of his house. And watch the

debates. People say, “Well, you can medicate the situation for two hours in a debate

form.” I don’t know. I don’t know how he’s going to get through the debates.

And there’s a difference in support. Trump’s support has been declining, but it’s rock

solid. He gets around 40%. He doesn’t go a lot lower. It’s not like Jimmy Carter, or

George W. Bush in 2008, where the popularity rating just tanks. He could go from 47

to 40, but he doesn’t go much below 40. So he’s got a smaller base, but it’s rock solid.

Biden has a larger base, but it’s very squishy when you ask, and this gets into the

science of polling, but when you ask people who say, “Oh, I’m supporting Biden...”

Okay, “How passionate, or how ardent is your support on a scale of one to five?”

They’re like, “Two.”

In other words, it’s a very squishy base that could be turned around.

So to me it’s almost as if everything that’s happened before doesn’t count, we’re in

a new horse race with a clean slate, 50/50, three months to go, Trump could pull

this out, but he better shift gears really fast, and Biden could win if he stays in his

basement, but more he gets out the tougher it will be. So it’s just an interesting

dynamic.

It seems to me that the economy is going to continue to play an important role. I

know you’ve written recently about the recovery being slower than many people

expect. I think that’s going to play a role if we can manage to get a recovery that

looks like a recovery in trends then Trump’s numbers probably begin to rise again.

Wouldn’t you say?

Addison:

10


And people expect it. I think that’s going to play a role if we can manage to get a

recovery that looks like a recovery in trends then Trump’s numbers probably begin to

rise again. Wouldn’t you say?

Well, they’ll talk it up, but again, any recovery, however you define it, has to be

put in the context of how severe the drawdown was. Lately, we just saw the June

employment report come out in early July and it showed unemployment dropped

from 13.3% to 11.1%. I could be off by decimal place, but roughly over 13% to a little

bit over 11%. And a lot of jobs are created, I think 4.8 million if I’m not mistaken.

About 4.8 million jobs are created. The White House is shouting, “Hey, we created

almost five million jobs. Unemployment dropped 2%.” And that’s true. Those

statistics are true, but you have to put the 4.8 million jobs in the context of 47 million

Americans who have applied for unemployment benefits. Okay, nice job with the

four million plus jobs, but you still got 36 million to go.

Yeah, there was good job creation in June. No

doubt about it. But the job losses were so severe

in March, April and May that you’re not going

to get back to full employment until 2025. Same

thing with output. Basically, GDP estimates, a

lot of people were saying, “Well, GDP is going to show a bounce back in the third

quarter.” Well, that’s highly likely, but in the second quarter, we’re going to show that

it dropped at a 35% annualized rate. Now 35% more in quarter, you kind of have to

divide by four. That’s in absolute terms, that’s a seven or 8% drop in the economy. But

when you take it down, I’ll use round numbers from, normalize at a 100 and take it

down to 90, okay, that’s a 10% drop. And you go up 5%, which by the way, would be

the highest growth since the early 1980s. You go up 5%, 5% of 90 is 4.5. You’re back to

94.5, but you’re not back to a 100.

In other words, and same thing again, if you had another year of 4% growth, okay,

that gives you another 3.6, but you’re still not back to a 100. We’re not going to get

to the best case, best case I would say, we’re not going to get to 2019 levels of output

until 2023 at the earliest. And we’re not going to get to 2019 full employment until

probably 2025. That’s a depression. Will you see good quarterly, monthly statistics?

The Greatest Blunder in the History of Economics

Addison:

Jim:

"There was good job creation in June. No doubt about it. But the job losses

were so severe in March, April and May that you're not going to get back to full

employment until 2025."

11


Yes, but you’re digging yourself out of a very deep hole and we’re nowhere near out

of the hole. And if you’re unemployed, those numbers don’t mean very much. If your

business is closed permanently, those numbers don’t mean very much. You’re broke.

I would say chalk that up in a Biden’s favor, if the economy is having difficulty

recovering or opening back up in many cases it’s been re-closed in different states.

Yeah, that’s the thing. I have a chapter in my new book on the lockdown, I call it, The Greatest Blunder in the History of Economics. The greatest economic blunder in

the history of the world is another way to put it. We did not have to do the lockdown.

There’s a rule that I think managers and statisticians and others are familiar with, it’s

called the 90/10 rule. You get 90% of the benefit at 10% of the cost. But if you want the

last 10%, that’s 90% of the cost. In other words, we could have gotten almost all the

benefit of the lockdown with social distancing, face masks, washing your hands, okay

maybe cancel some big venue events, like some baseball games or something like

that. Which would have been a relatively low cost. We could have got almost all of the

benefits. But by going for the total lockdown, we destroyed the greatest economy in

the history of the world for very little benefit compared to the alternatives.

And this is, in my book, I knew I have a chapter on the virus and the pandemic and

my editor said, “Jim, you’re the economic analyst. We want a book on the new, great

depression, which is what we call it. And we don’t really want you to talk about

medicine.” But I said, “Yeah, but it’s like writing about the structure in New Orleans

in 2005 without mentioning Hurricane Katrina.” If you want me to write about the

depression, we have to intro with the pandemic because that’s how it started. And

they agreed to that. But I knew I would be criticized. People say, “Well Jim, you’re not

an immunologist, you’re not an epidemiologist, you’re not a virologist why are you

writing about these things?”

My answer is twofold. First of all, I went to Johns Hopkins so I know a little bit about

it. And I’m pretty good at math. Epidemiology is only partly about biology. It’s

mostly about mathematics and getting functions correct and knowing how to do

super linear functions. But more to the point,

we let the immunologists run the economy. So

don’t tell me now an economist can’t talk about

immunology and virology. And I got to the point

where it was torturous. There’s a lot of research,

Addison:

Jim:

"We let the immunologists run the economy. So don't tell me now an economist can't talk about immunology and virology. You’ve been driving my lane for the past 3 months."

12


but I was one footnote per sentence. I was like, I know I’m going to get trashed. I’m

going to put my authorities out there.

But my point being, Trump really bungled the response. The American people were

never going to blame Trump for the pandemic. Trump did not cause the pandemic,

no politician did. The Chinese maybe, but not in the US, so he was never going to

get blamed for the pandemic. And if the economic crisis was a consequence of the

pandemic, he was not going to get blamed for that either. What he was going to

get blamed for was the response function. Okay, you got slammed twice. You got

slammed with a virus and you got slammed with in effect, a new great depression.

How did you handle it? That’s how he will be judged. And he handled it, I would say,

okay. This is kind of a C+, B+ minus report card, maybe C+. But he got a lot of things

right. Cutting off travel to China was right. Cutting off travel from Europe shortly

thereafter was correct. Andrew Cuomo wanted ventilators, Trump got the ventilators.

Everybody wanted masks, Trump got the masks.

By the way, ventilators don’t work. That turns out to be, Andrew Cuomo was on TV

every day screaming, “Ventilators, ventilators, ventilators.” Trump used the Defense

Production Act to mandate companies to make ventilators. They shipped them to

New York. They were never used. New York, never ran out of ICU unit beds, never ran

out of ventilators. It turns out ventilators killed a lot

of people. This shows, I’m not even faulting people

for that, I’m just saying that it shows how little we

know and how many blunders were made. But that

said, Trump blew an opportunity. He could have

been an FDR or maybe some other president who

inspired a great deal of confidence. An Eisenhower or even a Lincoln. And he blew it

because he couldn’t get out of the queen’s sandbox. And he kept picking fights that

people really didn’t care about.

And do you think there’s no time left for that?

There is time. That’s the funny thing about politics. They say a week is a lifetime

and that’s actually true. I ran a Washington office and I was a registered lobbyist

and spent too much time on Capitol Hill. And so I know a little bit about that, but

the point is there is time, but is there temperament? In other words, can Trump

actually... you and I are having a dialogue, we’re putting a message out to our

Addison:

Jim:

"Trump blew an opportunity. He could have been an FDR who

inspired a great deal of confidence. An Eisenhower or even a Lincoln.

And he blew it because he couldn't get out of the queen's sandbox."

13


audience so hopefully it’s helpful. But is this conversation we’re having going on

inside the White House? And if so, is Trump listening?

If he’s not, he’s going to lose. If he’s more of the same he’s going to lose. If he shifts

gears, I would say almost immediately and provides the kind of leadership people

are looking for and it doesn’t mean you can’t pick a fight, but I would pick a fight

with some of the immunologists and the other big mistake he made. I hate to keep

harping on mistakes, but they’re important if you’re trying to figure out who’s going

to win the election. We never had a national lockdown. We had 15, because it was

all done at the state level. Trump has a lot of power. I’m very familiar with the

Emergency Powers of the president of the United States. I’m going to go back to the

1950s when we were trying to figure out how to survive a nuclear attack. And when a

lot of these laws were enacted, but they’ve been on the books ever since.

Trump has the power, he did not use very much of it. Here and there a little bit, but

really not very much at all. Which is okay, it should have been left to the governors.

New York blew it, but South Dakota didn’t. South Dakota never had a lockdown and

they never had much coronavirus. And there were a lot of states in between. The

idea, this is the genius of the federal system. The idea that some states might have

resorted to more drastic measures and other states might have done almost nothing

except say, “Wash your hands,” which is good advice, makes sense. Because there

were different strains of the virus, it spread differently in different places. We have

different population densities, et cetera.

But Trump should have said that on day one. He should have said, “My fellow

Americans, every state’s different, the governors are responsible for this. We’re going

to help them anyway we can. If they need equipment, we’re going to get it to them.

If they need money, we’re going to run it through the Congress. If they need medical

expertise, we’re here 24/7.” He should have said, we needed emergency hospitals,

the Army Corps of Engineers will be onsite tomorrow morning. They did surge those

US Navy hospital ships once in New York and one to Los Angeles. They were never

used very much, but they were there. And that was a good thing. That’s the kind of

stuff Trump should have done, but otherwise should have said, “Hey governors, take

the lead and we’re here to support you.”

I think you have to really know how the federal system works to understand Trump’s

position there. But I always thought he could have articulated it better. That it’s more

Addison:

14


important for the governors to make decisions for their own citizens and then you

localize the response.

Correct. But instead Trump in his usual fad jumped out in front of it. Well, the

minute you jump out in front, you take the blame. And that was a blunder.

All right. I want to move on to another provocative theme that has been gaining

traction. I’ve been reading a lot about the “long March” of Gramsci and also Julius

Evola recently and they’re sort of two sides of the same coin, in my opinion. Antonio

Gramsci was an Italian philosopher in the 1930s and the long March was his idea

that in order to enact a Marxist revolution within the capitalist society, you would

have to infect the universities and the institutions that support democracy and

capitalism with people who have an inherently anti-capitalist point of view.

We’re seeing a lot of that in the streets. A lot of people, Black Lives Matter is certainly

a movement that warrants some attention because of the violence and the desire

for people to be unyoked and live a free life. We can certainly understand that,

but there’s a lot of other elements to those marches that include a sort of Marxist

philosophy. I would say it seems to be the fruition of the long March of Gramsci.

On the other hand, we have guys like Steve Bannon and Aleksandr Dugin in Russia,

who are adherents to a philosophy called Traditionalism with a capital T, that

adheres to kind of a spiritual reawakening, anti-modern point of view, strong borders

and states working together or against each other and a hierarchical society that is

run by a “philosopher king,” to put it in Plato’s words. They’re two sides of the same

point, because they’re collective views of the way society should be organized.

And they connect in the middle and squash out the individual. I happen to be a

libertarian so I believe in individualism and my own right to determine my life. I’m

not very interested in politics other than wondering, who’s going to win the election

and its impact on the economy.

But it seems that this mob ideology has taken to the streets and it has an equal and

opposite counterpart in the Traditionalist camp. Do you have any opinions on the

way that the mob rule of the left seems to be? It’s certainly predominant in the media

width.

I don’t know Steve Bannon personally, seems like a pretty smart guy, but I doubt Jim:

Jim:

Addison:

15


he’s read very much of Julius Evola because if he did, he wouldn’t be mentioning

the name in public. You said that Antonio Gramsci and Julius Evola were, I think

you used the expression two sides of the same coin. I would say they’re the same

side of the same coin and the coin is fascism. And fascism is one of those words, by

the way, Evola was put on trial in Italy in 1951, after World War II, he was forming

a new fascist party in Italy or he was accused of that and was put on trial. And in

his defense, he said, “I am not a fascist. I am a super fascist.” And he was acquitted.

Know where Julius was coming from.

But here’s the point, there are certain words. And of course, George Orwell

predicted this 75 years ago, where when you’re in an ideological movement and

somebody or some group is pursuing an ideology to the exclusion of all other

views, language is the first casualty. People start giving words, new definitions.

This is what Orwell called “Newspeak” in his novel, 1984. And everything becomes

propaganda and things lose their meaning. It makes it hard to have an intelligent

conversation because you’re trying to use words intelligently. I love a good debate.

I’ll take a debate anytime, but I don’t want to waste my time talking to hard shell

ideologues who aren’t listening and don’t care and just want to use the platform to

propagandize, which of course is what Saul Alinsky recommended, for that matter

Gramsci.

My point is words like fascist have lost their meaning. It’s like, if you don’t agree with

someone, you call him a fascist and everybody’s a fascist, et cetera. Fascism has a

very specific meaning as articulated by Benito Mussolini who was the intellectual

father and the political father of 20th century fascism. And his expression was,

“Everything inside the state, nothing outside the state.” That’s an English translation

of the Italian phrase. But the idea is, it’s not that you can’t have Boy Scouts, but they’ll

be fascist Boy Scouts regulated by the state, et cetera. Something like the Nazi youth.

The greatest fascist movement, one of them was communism. And Stalin we hear

about the antifascist, the Antifa. What is Antifa? Antifa is a shortening of antifascist

action, which is a German group organized by Stalin in the 1930s.

It was an antifascist action, Antifa for short. Well, people say, “Well gee, if Stalin

was organizing Antifa, which he did, he must’ve been antifascist so fascists are bad

and does that make communists good?” Stalin was highly cynical. Stalin was the

greatest fascist of the 20th century. Hitler was a little different. Hitler was more of a

totalitarian, I would say almost satanic figure, and you can call him fascist, that’s fine.

16


But Stalin knew he was a fascist and he didn’t want to be associated with Hitler. He

said, “We need to position ourselves, the communists, as antifascists otherwise we’re

going to get lumped in with Hitler and Mussolini and all these other guys we don’t

like. We’re going to say we’re the antifascists.” But again, you’re already moving the

language around to pursue an agenda.

Gramsci is an intellectual. He was a neo-Marxist, but he thought Karl Marx got one

thing wrong. He said, “Karl Marx was right about class warfare. He was right about

the bourgeois and the proletariat. He was right about the exploitation of everyday

workers by those who own the means of production, which were the capitalists.”

Gramsci said, “I agree with Marx on all that.” But where he diverged, Marx said,

“This was all going to be rectified by revolution of the proletariats.” Proletariat rise

up, overthrow the capitalists, seize the means of production and have an ideal

communist society. And we’d all live happily ever after. That never happened.

Something like it happened in Russia, but it was immediately perverted into a

totalitarian system.

So the real Marxist revolution never happened. But with Gramsci’s long road, the

first thing they do is take over the schools. Now we can brainwash entire generations.

And as those generations go out in the world, they’re carrying this intellectual virus,

this ideological virus with them. And then

next we’ll take over government agencies.

This is the so-called deep state. And then we’ll

take over unions and then we’ll take over the

colleges and universities. And then eventually

we’ll take over the political system. That’s

going on right now with AOC. AOC, okay a

Starbucks barista in Queens she’s now a member of Congress heading for reelection.

Give her a little time, she’ll have leadership positions. She’s the organizer of the

squad.

She didn’t come out of nowhere. She got huge financial backing from external

sources. That’s legal. I’m not saying it’s not illegal, but don’t think for a minute, these

are just people rising up off the streets saying, “Hey, I want to run for Congress.”

This is calculated. It’s backed. The district attorney in Philadelphia. See what these

organizations have realized, and they’re Soros backed, but not exclusively Soros. A

lot of sources for the funding, including some from the United States government

"AOC was a Starbucks barista in Queens... she's now a member of Congress. Give her a little time, she'll have leadership positions. She's the organizer of the squad. She didn’t just come out of nowhere."

17


when Obama was directing multi-billion dollar settlements from major banks in the

direction of community organizers, et cetera.

What they do is say, “You know what? You actually don’t need the White House. If

you give me enough District Attorney positions, give me enough Attorney General

positions, give me enough Mayors and the City Council people, give me some Board

of Ed seats, and I’ll turn this country into a communist country before you can blink,”

and that’s what’s going on.

If the DA says, “No bail for anybody,” if the DA says, “We’re letting all the prisoners

loose,” if the DA says, “We’re not going to prosecute people who assault police,”

then guess what? Nobody gets prosecuted. The jails are empty. You don’t need

presidential pardons. Who cares what the Electoral College does? You’ve done it

from the ground up. That was Gramsci’s vision. It’s working. It’s working scarily well.

Gramsci was the ultimate fascist because this is all about state control, they just want

a different kind of state. All Gramsci did, and it’s a big deal, I’m not diminishing it,

Gramsci said, “Instead of doing it from the top down, we’ll do it from the bottom up

and the leaders will never know what hit them. We’ll take over before they know it.”

And this started in the 70s and it’s been going on ever since.

So, the long march through the institutions, but it’s not at a point where it’s too late.

I don’t care if you’re smart enough to get into Harvard or Yale or Columbia, or I’ll

include Johns Hopkins, yeah, good for you. Nice

going, you worked hard. But when you get there,

unless you’re a natural science major and you’re

just going to look at things under a microscope,

you’re going to be indoctrinated. Good luck finding

a history course or a philosophy course or political science course that’s anything

other than ideological indoctrination.

And so it ends up, you’re not uneducated, you’re miseducated, but you don’t

even know it because what have you not been taught? You have not been taught

They took away tools to know you’re being brainwashed… then they brainwashed you.

"Good luck finding a history course or a philosophy course or political

science course that's anything other than ideological indoctrination."

18


critical thinking. You have not been taught reasoning by analogy. When they took

the analogy section off the SATs, which they did on them maybe 10 years ago or

whatever, that told you all you needed to know, because reasoning by analogy is how

you solve hard, hard problems. This is what they teach in law, at least they used to

when I was in law school.

But if you don’t have the answer to a problem, you’re looking at a hard problem,

you don’t have the answer, it’s not right in front of you, it’s not even apparent from

the sources, how do you solve it? Well, there are a couple of ways to do it, but one of

them is to reason by analogy. Find another problem that’s close enough, see what

happened there and then bring it over to your problem and see if that works. That’s

what reasoning by analogy is. They took it off the SATs and stopped teaching it.

Why? Because people could actually... if you had that skill, you could solve problems

and see through the ideological indoctrination. And then, same thing with critical

thinking. So they took away the tools you need to know you’re being brainwashed,

then they brainwashed you. Then they turned you loose in society and now you’re all

over McKinsey and running for office and you’re the DA in Philadelphia.

It’s almost too late. I was thinking about the decline of the Roman Republic, not the

decline and fall of the Roman Empire, that took 1,000 years, but the decline of the

Roman Republic. And everyone says, “Well yeah, Caesar crossed the Rubicon, which

means basically he brought Legionnaires, brought his troops into the city and the

surrounding territory of Rome, which was absolutely prohibited. You could fight

all over Europe, but you couldn’t bring your troops into Rome, but Caesar did. And

then, he became a dictator and then he was assassinated. Then there was a civil war.

And then finally, Augustus became the Octavian, later Augustus became the empire.

Well, that took about 30 years, but the decline of the Roman Republic started really

100 years earlier in the late 2nd century with the assassination of two brothers who

were populous of the time, at least in Roman terms. So, that took about 120 years to

really rot from the inside. And I would say we’re a good 50, 70 years into rotting from

the inside and maybe we will.

But Evola is no different. Saying he was and atheist doesn’t go far enough, he was

actually a Satanist. Let’s call it a cultist. He dabbled in magic. And whatever you

think of magic… when you dabble with it, you lose. Meaning yeah, you can do it...

there is a supernatural world out there, but you better wait for it to come to you with

a good message, that would be God. But if you knock on the door with your own

19


methodology, you’re going to bump into another fellow called Satan and you’ll be

taken over by it, and that’s kind of what happened with Evola.

One of the things that makes these mass movements possible is the Modern

Monetary Theory, which is that the Fed effectively, just to keep it simple, print as

much money as they want. And as long as the US dollar is the reserve currency of

the world. Approximately 80% of debt in the global economy is priced in dollars.

So, as long as the dollar remains the reserve currency of the world, we can get away

with $26 trillion in federal debt or a $5 trillion deficit for a single year. Granted, these

are all in response to the pandemic, but still, that’s a tall order to figure out how to

finance all that debt.

There is another link within the Five Links that caught my attention recently, which

is this idea of The Great Reset. It’s like all of the countries, especially of Western

Europe and the Americans, are in debt. They have these massive debt loads that are

all priced in dollars. The world economic forum recently floated the idea that they

called The Great Reset. And to me, it’s a frightening concept, that all of the central

banks of the world would try to get together and devalue all the currency. I mean, I

can’t even imagine how they could figure out what The Great Reset would look like

on the other side. It sounds like a colossal mistake waiting to happen.

Well, you’re right. I mentioned earlier that in an ideological movement, the plain

meaning of words are the first victim, which is true. So what we have now, is that

there are two definitions of The Great Reset and they’re completely opposite. So, as

if things weren’t confused enough, why don’t

we have an important event and give two

opposite meetings and then let people figure it

out?

So, let’s just go back a little bit. The phrase,

The Great Reset, has been around for a while,

at least 10 years, maybe longer. There’s a book, I think it’s called The Great Reset by

a Dutch writer, Willem Middelkoop. It’s easy to find online. It’s been a bit of a best

seller. And I not only use the expression myself, but I certainly make forecasts and

do analysis that are in line with what is generally described as The Great Reset. And

what it means basically, is that people will lose confidence in the dollar. You will

need to come up with a new monetary standard, a global reserve currency of some

Addison:

Jim:

"What we have now is two definitions of The Great Reset and they're completely opposite. So, as if things weren't confused enough, why don't we have an important event and give two opposite meetings and then let people figure it out?"

20


kind. It could be gold. It could be the special drawing right, the SDR special drawing

right, that’s world money from the IMF. I call it world money. The IMF doesn’t call

it world money, they call it special drawing right because they don’t want anyone to

understand what they’re talking about, but that’s the technical name for it. But you

can think of it as world money.

People don’t realize the IMF has a printing press, the same as the Fed. The Fed

can print dollars. The IMF can print SDRs and hand them out in any quantity, and

they’re not confined to member institutions. The IMF, under their articles, could

print SDRs and give them to the United Nations to pursue a climate change agenda.

That’s actually in the articles of the IMF. And I mention that in my book, The Road to Ruin. So yeah, some kind of crack up of the dollar, followed by, fill in the blank,

some people say Bitcoin, some people say gold, a gold-backed currency, SDRs.

We can be pretty sure it will not be the Chinese Yuan, nobody wants them. It will not

be the Russian Ruble, nobody wants those. I mean, these countries might be able to

form bilateral trading relationships and say, “Hey, you got to take Yuan or whatever.”

That’s fine, but they’re not going to be global reserve currencies. The leading

candidates are the dollar, maybe the euro, the SDR and gold. And SDRs can be

digitized. You can have a crypto-digital SDR. I don’t think much of Bitcoin. I think it’s

a scam or maybe recreational gambling, if you like. But the SDR could be digitized

and there’s some effort along those lines.

So that crackup, followed by a new monetary standard is what people mean when

they say The Great Reset, until very recently. Now, just in the last couple months,

and you’re right, the World Economic Forum, WEF, which is the host of the Davos

Conference... People may not have heard of the

World Economic Forum, but they’ve heard of

Davos, that’s this nice ski resort in Switzerland

where once a year, all the great leaders of the world

gather and they talk about the future of the world.

They’re usually wrong, by the way you. Actually, if you study Davos closely and see

what they’re doing, just go out and do the opposite in your investment portfolio,

you’ll do very well. They get it wrong, but they do try.

So, they’ve decided that this year, the 2021, January 2021 Davos Conference, is going

to be about The Great Reset, but they mean something completely different. This is

"If you study Davos closely and see what they're doing, just go out and

do the opposite in your investment portfolio, you'll do very well."

21


really globalism 2.0. This is an effort by the elites to reboot and rebrand globalism.

Globalism means no borders, no tariffs, global capital flows, no exchange control,

world money, world domination, a world tax system. Again, I talk about all these

things in my book, The Road to Ruin. And I’m guided by, I think we all should be,

Rahm Emanuel’s famous comment in the early days of the Obama administration,

during the depths of the 2008-2009 financial collapse and recession, when he said,

“Never let a good crisis go to waste.” And they didn’t. They passed an $800 billion

stimulus bill in February, 2009.

I mean, $800 billion seems like small change compared to what we’re talking about,

$5 trillion, and you’re right about the $5 trillion. But $800 billion, as Everett Dirksen

said, it used to be real money. But most of that money did not go to shovel-ready

infrastructure. Remember shovel-ready? That was what they were talking about.

All that happy talk. No, it went, actually, a lot of it went to support municipal workers

who were going to be laid off, because the States can’t print money and had budget

deficits, and that was their constituency. A lot of it went to community organizers,

etc.

So Rahm lived up to his trademarks. And now the world elites are saying the same

thing, “Never let a good crisis go to waste.” We have a pandemic, we have a global

depression. We have very strained financial

situations all over the world. Why not use

that to pursue what? Well, Al Gore is going

to be busy... it’s going to be the Green New

Deal on a global basis.

But everything I just mentioned: world money, world taxation, turning corporations

from private enterprise entities that work for the benefit of stockholders into social

welfare conduits that do what they’re told by the government, etc. There’s a long

list of things, but the way to understand it, this is globalism on steroids, rebranded,

rebooted for the post-pandemic age, but they’re calling it The Great Reset. So right

away, when you say Great Reset, you have to say, “Huh, are you talking about the one

where the dollar collapses or are you talking about the one where Al Gore becomes

CEO of the world?” Because that’s what’s going on, number one. So you watch that

agenda closely. They’ll get it wrong, but when powerful people are screwing up, it’s

important to know about that because there’s opportunity there.

"Globalism on steroids. Al Gore is going to be very busy... it's going to be the Green New Deal on a global basis."

22


As far as the currency reset is concerned, here’s what’s actually going on. We can

cut through all the jargon and everything else, I’ll tell you what’s actually going on.

People who talk about the devaluation of the dollar don’t know what they’re talking

about. They compare it to... they use DXY, that’s a dollar index. Bloomberg has a

very popular dollar index. The Federal Reserve, that’s the one I use, they have what’s

called a broad trade-weighted real index. There are a number of indices you can use

and if you look at all of them, the dollar is getting stronger. And they say, “But aha,

the dollar is going to crash.” Well, not really. The dollar is getting stronger.

But when people say the dollar is going to crash, what they mean is it’s going to crash

against the euro. The euro is the biggest component in all these indices. So, you’re

talking about the euro-dollar exchange rate. The euro-dollar exchange rate goes like

this, and then it goes like this, and then it goes like this, and then it goes like this.

Currencies don’t go to zero; stocks go to zero, if the company files for bankruptcy;

bonds can go to zero, if the company files for bankruptcy. Currencies don’t go to

zero. At least, not major world reserve currencies don’t go to zero, they fluctuate. So

yeah, look for turning points. Look for momentum. You can trade them if you’re an

exporter. If you’re a bank currency trader, you really need to know, but they don’t go

too far out of bounds.

The point is, how can the dollar crash... People talk about dollar devaluation. Well,

if you have dollar devaluation, that means the euro is going up. What does that do

for Europe? It kills them. It kills their exports. It creates deflation in Europe. It makes

their debt burden worse. In other words, a declining dollar measured as a cross-rate

to Euro would destroy Europe. Do we want that? No. Do the Europeans want it? No.

So people who talk about one currency going down, never think about the fact that

that means another currency must be going up. And what does it do to that country?

Same thing with Japan.

So, the way I think about all the major currencies, they’re like passengers in a

lifeboat, in the middle of the ocean, where the ship sank. Okay? They got a certain

amount of food, a certain amount of water, not much. Now, you can distinguish

among the passengers. You can say, “Well, this guy is taller or this lady is smarter

or this guy is a better swimmer or whatever,” but they’re all in the same boat. And

there’s no way that one of them is going down without all of them going down. And

it’s mathematically impossible for all major currencies to devalue against each other

at the same time. That’s a mathematical impossibility. If one is devaluing, somebody

23


else has to be going up and they’re bearing the... This is what Currency Wars are all

about, that was my first book. And the currency that’s going up is bearing the burden

of imported deflation and reduced exports and reduced export-related jobs. Not fun

in a world that’s in a depression.

So, how do you actually devalue the dollar, if you don’t want to destroy all the other

economies by making the currency stronger? The answer is gold. Gold is the one

form of money that can’t be printed. All currencies can devalue against gold at the

same time, without any currency going up. What goes up is the dollar price of gold.

So gold is the only form of money, the only measuring tool against which all the

currencies can devalue at the same time. It’s the only one. What does that mean? It

means the dollar price of gold goes up. The euro price of gold goes up. Gold goes up

denominated in every currency in the world.

So, what I’m doing... People say, “Jim, is the dollar devaluing? It’s devaluing?” I say,

“Yeah, fast, but you have to look at gold.” Nobody looks at gold. I mean, yeah, miners

look at gold, gold bugs look at gold, but I look at the dollar price of gold as a cross-

rate, as an exchange rate, the same way you look at the euro price of the dollar or the

dollar price of euros. And when you see gold going from

$1,400 to $1,500 to $1,600 to $1,700 to $1,800, and the

gold people who are now going, “Yay! Gold is going up!”

I say, “No, gold is not going up, the dollar is going down.

You’re witnessing a massive collapse of confidence in the dollar, but you won’t see it

if you look at euros or yen, and you will see it if you look at gold.” And that’s The Great

Reset.

The true Great Reset.. It’s not mine, but it’s the right way to understand it. Nobody

really does and nobody looks at it.

Let’s move on to China. There was an act passed, I believe yesterday, or I’m not sure

it was passed, I think it was presented yesterday to tie America’s or the United States’

military interest directly to Taiwan. It’s called the Taiwan Defense Act, I believe.

And the Chinese, the Communist Party believes that Taiwan is part of the mainland

and they just annexed Hong Kong, that’s done. So we’re funneling our way into a

defense of Taiwan. We’ve been defending Taiwan since the end of World War II. And

there are some islands in the South China Sea that are in dispute right now between

"Yay! Gold is going up!" I say, "No, gold is not going up, the

dollar is going down."

Addison:

Jim:

24


the Philippines, Taiwan and China.

Talk about not letting a good crisis go to waste, it seems like there are, not just within

the Trump administration, but within the military-industrial complex, there are a lot

of people chomping at the bit to heighten tensions between China and Taiwan, and

have the US get right in the middle of it. I don’t have much to say about that because

I’m opposed to military adventurism of that kind, but it is going to play a role, I think,

in the election and also in our ability to manage the economy as we come out of the

pandemic.

The China-US story is maybe the most important story in the world. And we just

spent the better part of an hour talking about the pandemic and the economy and

US politics, and Neo-Marxist ideology and The Great Reset. Those are all important

things, I’m glad we went through them. But you could say that the China-US story is

actually number one. It’s not getting the attention

it deserves.

And you’re right, mainland China, People’s

Republic of China thinks that Taiwan is part

of China; they’ve just got this kind of rogue

government, but it’s really part of China. But

what people miss is that the Taiwanese these think that China is part of Taiwan. In

other words, they both think that they’re the government of the whole thing. Now, I

understand Taiwan is geographically smaller, but it has actually a higher per capita

income and better technology and a pretty good defense posture. So, we’ll see how

that plays out.

Addison:

"The China-US story is maybe the most important story in the world. And we

just spent the better part of an hour talking about the pandemic and the economy and US politics, and Neo-

Marxist ideology and The Great Reset."

Trust Us… We Went to MIT and Harvard

My father was in the 1st Marine Division and after fighting his way through the

Pacific in Peleliu and Okinawa he actually, in addition to other medals, he got a Cold

War medal, because he was in the occupation of China in 1946 in Chancen. As a kid,

that’s how I learned about hyperinflation. Later I studied the Weimar hyperinflation

in early 1920s very closely, but when I was a little seven, eight-year-old kid, my

father used to say to my buddies and I, if we wanted a case of beer, we had to take a

wheelbarrow full of Chinese money, the Yuan down to the depot to get the beer.

Jim:

25


And I said, “Wow, a whole wheelbarrow full of money just for a case of beer.” But that

was really almost as bad as Weimar, just didn’t get as much attention. But the point

is, the United States doesn’t want a war, but the question is, does China want a war?

And Taiwan is a treaty ally, you’re right, there was new legislation passed recently,

and more on the way. But we’ve had defense treaties... Their treaty ally had been for a

very long time, throughout the Cold War.

Now, I would say it should have been obvious 25 years ago, and I said so at the time,

but now it’s obvious even to the globalists, the people who are delusional like Jeffrey

Sachs and some others. The Chinese took off the mask. It was always a mask. The

mask was, “Hey, yeah maybe we’re communists. Maybe we have a few human rights

violations, but trust us we all went to MIT and Harvard. Give us time, let us proceed...

open up your markets. Let’s have cross investment. Let’s have shared technology and

sooner or later we’ll be just like you.”

And people like Jeffrey Sachs and Richard Haass, and Joe Biden for that matter

and Obama and others bought into this. They’re like, “Yeah. Chinese, they’re nasty

around the edges, but give them time, they’ll be just like us.” That was never going to

be true. It wasn’t true. It was a delusion that

worked for the Chinese. They’re like, “Yeah,

well, if you guys want to be fools, we’ll give

you all the rope you need to hang yourself.”

Meanwhile, China lied about everything

they ever did.. They lied about the entrance

criteria for the SDR, in 2016. They lied about the Hong Kong treatment effect in 1997.

They lie about everything, because they’re communists. They just lie. That’s what

communists do. So yes, they are communists.

I had people, I remember 20 years ago, say, “Hey Jim. You’re just imagining things.

Get with the program. Old Marxist’s, and they’re going to die out soon.” I said, “No,

these are 40 year old Marxists who are going to be around for 30 years. And they’re

real Marxists.” But they kept this mask on. They kept this mask of them, “We’ll be just

like you give us time.” What happened in the last year? They took the face mask off...

organ transplants on live victims without anesthetic, whose bodies are cremated,

sound familiar?

Genocide, sterilization, forced abortion. This new law in Hong Kong... By the way,

"They lied about the entrance criteria for the SDR, in 2016. They lied about the Hong Kong treatment effect in 1997. They lie about everything, because they're communists. They just lie. That's what communists do."

26


I’ve been to China many times and I’ve been to Taiwan and Hong Kong, but that’s

not what I’m talking about. I’ve been all over China. I’ve been to Wuhan. I’ve been

out in the countryside. I’ve been all over China. I’m not going back. And the reason

is that China has just passed a new national security law, which puts an end... In its

expression in Hong Kong whatsoever. But it applies across the board and it’s extra

territorial.

And what that means is let’s say you’re an American, so I’m sitting here in

Portsmouth, New Hampshire, I’m active on social media. I write for Agora Financial

and Paradigm Press. I do TV interviews, I do podcasts, I’m doing this presentation

with you. I criticize China all the time. In fact, I just did five minutes ago. And well,

I’m not worried about the Chinese arresting me in New Hampshire. But if I go to

Hong Kong, I compose... They say, “Jim, you have jeopardized the national security

of China by your repeated denunciations of our policies and our internal matters and

the communist party, and you’re on your way to Beijing. You’ll never be heard from

again.” That ability. That’s what the law says.

So why would I want to gamble with that? I wouldn’t. I’ve been to China. Got a nice

slideshow, lots of pictures, but I’m not going back. Not that lone place, I’d be an

easy target. The others will find out the hard way. We’re in a new Cold War. We are

decoupling... executive orders in the next couple of days. Factories are going to have

to move their manufacturing back to the US, or to a third country. You can move it to

Vietnam, or someplace else. But you got to get it out of China.

Huawei’s going to be shut out of all developed economies, or pretty much all

developed economy assistance. This is war. It’s not yet. Hopefully, it never will

be, but it is a financial war. It’s an ideological war and it’s underway. So don’t fool

yourself into thinking that he’s picking fights, but it’ll all be good. Now, this is where

the Biden thing is a big deal. Because if Biden comes back, it might be like flipping

a switch where all of a sudden, we resume this delusional partnership with China.

Leave it to a guy with early stage dementia to think China was a good thing. But that

could happen.

Probably one of the highest stakes’ consequences of a Biden victory, which is we

would drop the ball in terms of understanding. By the way, and just to be clear,

I’m talking about the communist party of China. I have friends in China. I met

wonderful people all over China, and I love Chinese culture and Chinese history and

27


ethnic traditions. It is an innocent party, but they rule with an iron fist. And it’s the

communist party of China.

If things continue to deteriorate with China, that’s going to have a further impact on

the US economy. You had mentioned earlier that we’re in a technical recession, but

that you believe that we’ll more fundamentally be in a depression. Meaning that it

could take many years to come out of it. And you mentioned 2025, that would be if

all things go perfect, we end up at a point at 0.4% growth, or something like that. But

that’s if things go well.

And we still feel the impact of the Great Depression of the 1930s through our

grandparents and great grandparents and the stories that come down through our

families. This is certainly going to be one of those times, I believe. I’m just going to

give you a few parting words, just to help people understand the difference between

the recession, what they see on the nightly news, or on Bloomberg, or that kind of

thing where they’re looking at technicals, versus the cultural shift that we’re going

through. And the likelihood of a sustained depression in the economy and what that

would mean for wealth preservation and how you position the future of your family

and what you expect your kids to be able to do. And even your grandkids.

Well, you pointed the thing out which is the difference between a recession and a

depression. So recession you have two or more consecutive quarters of declining

GDP with a few other bells and whistles. Increase the lower industrial capacity

utilization. There’s a group called the National Bureau of Economic Research, NBER

up in Boston. It’s basically academic economists, but they are the official arbiters

of when recessions start and when recessions end. So that’s what they do. They do

other things, but that attracts attention.

And they’ve already declared a recession. They said the recession was beginning, I

agree with that. I think that’s right. That’s what I said in my new book. And then they

came along and said, “Yeah, that’s when it started.” We don’t know, by the way, we

could have growth today. We could have growth in the third. My point is that it won’t

be very strong growth and it won’t come anywhere close to undoing the damage. But

technically, could I see, yeah the recession was over in the third quarter, it was a six

month recession? It’s possible, but that glosses over the fact that whatever growth

you get it’s enough to undo the damage, which is a bigger problem.

Addison:

Jim:

28


That brings us to the recession. Now, economists have banished the word

depression. We talked earlier about the meaning of words. Economists don’t use the

D word as I call it, because first of all, it sounds bad. Who wants to be the... But more

to the point, you can’t quantify. A depression is a lot more than economic statistics.

It’s a lot more than a couple quarters of declining growth. It’s behavioral. It has to do

with the velocity of money. It has to do with confidence.

Depressions can linger, as we saw in the Great Depression, lasted from 1929 to

1940. By the way, a good cocktail party trivia question. Everybody knows the Great

Depression started in 1929 with the stock market crash, when did the industrial

average regain the prior high? 1954. The Depression was over in 1940, but the

index did not get to the old high until 1954. It took 15 years to get back there. So if

you’re one of the people who say, “Buy an index fund, buy and hold.” Well, you will

probably be dead before you recover your losses. Same thing in commercial real

estate, by the way. That’s a depression. And the effects were multigenerational. As

a kid in the 1950s, I didn’t live through the Great Depression. My mother did, my

father did, my grandparents did, but I didn’t. But their depression era habits were

what raised me.

So my brothers and I used to take our American Flyer wagon up and down the streets

of our suburban neighborhood and collect tin cans and newspapers. And we didn’t

think it was like anything to do with the environment. Maybe it helped, who knows.

And you needed to recycle steel, so you could build airplanes and tanks, or whatever,

and newspapers could be recycled. And interest rates were 3%. Well, I guess they’re

back there now. But the point is these were inner effects. It wasn’t until the late

1960s, when the baby boomers came of age, that the consumer, party on, Woodstock

economy took over, but that was 30 years. And that’s a depression. That’s what

depressions are like.

It doesn’t mean you have 30 years of declining growth, or 10 years of declining

growth. That’s almost impossible, but it does mean that even when growth returns,

spending does not, velocity of money does not, inflation, changes that have

been made, do not return. You’re just in a new world. And that’s the best way to

understand what we’re in right now. So I don’t really care what the NBER does.

Again, my expectations, they’ll say the recession is over in 2020, depending on

how the reopening goes, which is not going very well at the moment. But it doesn’t

matter. We’re going to be stuck in a depression for a very long time.

29


We skipped over Modern Monetary Theory. That’s a big subject. And just to draw up

a footnote. You said that Modern Monetary says that the Fed can print all the money

they want. They say something different, but it’s important. They say the treasury can

spend all the money they want. And you sell bonds, and oh, by the way, if the bond

market gets cranky, the Fed can monetize the bonds and print money. So there is a

Fed connection there. But what Modern Monetary Theory really does, they take the

treasury and the Fed and they treat them as if they’re consolidated. And they merge

the balance sheet.

Now, that’s not legally how they’re set up, but who cares? That’s how they

intellectually, or theoretically think of it. And Modern Monetary Theory, I’ve studied

the works. I cover this in chapter five of my book Aftermath. And I also have a

section on it in my new book. And Professor Stephanie Kelton, of Stony Brook

University of New York is the big brain behind all of this. But she says things like,

“How would people get money if the treasury didn’t spend it?”

Now, I know there are good answers to that question, but that’s what they say.

They go, “We should be spending money? It puts money in our pockets directly.

How could we get money if the treasury didn’t spend it? And Oh, by the way, don’t

worry about it, because the Fed can print up, buy as many bonds as they want.” So

they merged the treasury and the fed. They don’t show. And honestly, if you have

confidence, it doesn’t matter. The US is taking the plunge from 105%, to 130% debt to

GDP ratio. That’s what’s going on right now... 50% and go that high.

Now, there are good answers to this, by the way. And I think Modern Monetary

Theory is one of the great intellectual frauds of all time, but it has a lot of appeal,

because it gives people what they want, which is free money.

Show me a politician who doesn’t want to spend money. And it used to be, the

debate was, “Well, I want to spend money on free healthcare, free childcare, Green

New Deal, forgive student loans. Well, we can’t afford it. I hear you, but we can’t

afford it.” But now the rebuttal is “Yes, we can.” Which is just printing money. And

they’re doing it. And nothing bad is going to happen. Sure we have a pandemic and

a depression, but we don’t have inflation, and the bond market’s still functioning, so

show me something bad that has happened?

Well, that’s a very enticing view. It’s actually difficult to rebuttable. I can rebut it and

30


I’ve done so, but it’s not a rebuttal you hear from very many people. And it’s not one

that politicians understand. And if they don’t understand Monetary Theory, they’re

enabling it. What they’re doing is MMT, whether they call it that, or not, whether

they understand it or not, that is what they’re doing. But what the MMT people are

missing, actually everything they say is correct, it’s what they don’t say. It’s what they

don’t deal with, where the flaws are. Starting with the fact that the limit on fed money

printed with debt to GDP ratios, balance sheets, or law. It has to do with confidence.

And confidence is very fragile and it can be lost in a heartbeat. And when you lose

it, it’s impossible to regain. So we’re in a situation where they’re very far along in

destroying competence. There may not be a legal limit on the fed balance sheet, in

fact, there isn’t. But there’s an invisible confidence boundary. And you don’t know

it until it’s too late. When you cross it, you have an immediate meltdown, but then

it’s too late to do anything about it. And that’s the biggest flaw. There are other flows.

Again, I talked about it in my book Aftermath. But that’s the biggest one. So yeah,

we’re heading for a crackup, a big one, but not yet. This can go on for a while before,

before it all comes tumbling down.

Well, Jim, I ranged far and wide. We did our virtual Five Links today. I want to thank

you for sharing your ideas with us. As usual, the interview will be posted and then we

publish the transcript too. So if you want to go back in and take a look. Also, I want to

point out that gold, if the forecast is correct, the dollar price of gold will go up as the

debt makes its way through the economy and through the different currencies of the

world. We’re expecting gold, the bulk price to rise.

And as we’ve been saying over and over again, during the pandemic, the best way

to buy and sell gold is with the Hard Assets Alliance. We provide a link on a regular

basis for you to open an account. Opening an account is free, and then you fund

it and you’re trading your own money. It’s a very easy platform to use, and we

recommend it highly. Jim, I want to thank you. Looks like a fairly decent day up there

in New Hampshire.

Yep. Looking forward to enjoying the rest of the day. Thank you for having me… it’s

good to be with you.

Yep. I’ll talk to you soon.

Okay. Bye-bye.

Addison:

Addison:

Jim:

Jim:

31


Open Your Free Gold Account Today

For all of written history gold has provided a bulwark against contagion in the

markets. Ever since trading began, one asset has remained a store of value. As we

enter this “unprecedented” epoch in our history, using gold could be the only way to

save your portfolio.

Hands down the best way to buy, sell and trade gold today is with an account from…

The Hard Assets Alliance

It’s easy to set up. Easy to use. And best: the set up is free. Free of charge.

We say this with as much urgency as we can muster. Open an account and put a

portion of your assets in gold.

Yes, gold -- the one asset used to store value for thousands of years. This pandemic is

downright biblical, so you need an asset that has passed the test of time since before

the bible was even written.

The Hard Assets Alliance has a state-of-the-art trading platform where you can buy

and sell fully allocated gold bullion. You can buy, sell and trade silver and other

precious metals too.

Their fees are low, so you get your lion’s share of the profits when you sell.

And better yet, at the point of purchase, Hard Assets Alliance allows you to either

take delivery, or… get this…

You can store your metals in one of six different vaults around the world.

New York and Salt Lake City here in the US or you can also store your gold outside

the United States in ultra-secure offshore vaults in London, Singapore and Australia.

Opening an account is secure, and it takes just 9 minutes to go from opening an

account to funding to buy your gold and silver.

In 20 years of business, we’ve come across many gold companies that want us to put

their products in front of you.

https://registration.hardassetsalliance.com/registration/user-account?aff=AFR&utm_source=AFR&utm_medium=ed-mention&utm_term=7-1-20-ed-mention-AFR&utm_content=AFR-7-1-20-ed-mention&utm_campaign=registration



32


Customer Service | 808 St Paul St | Baltimore, MD 21202 USA. Nothing in this report should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

© 2020 Agora Financial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This Newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web) , in whole or in part, is strictly prohibited without the express written permission of Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202.

Many of them promised us huge commissions. Translation, that meant huge

markups for you.

We have consistently said no.

Instead, we did the hard work on your behalf… finding the best way to buy, sell and

store gold… in an easy platform… with super low costs.

We found all of that – and more – in the Hard Assets Alliance platform.

We liked it so much, in fact, that we bought a stake in it.

So, while we’re providing you with an easy way to vaccinate your portfolio today, you

should also assume we’re going to benefit from increased trading activity.

Your family and your financial health is too important to procrastinate.

Get started here.



Date post:	31-Jul-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

SURVIVING AND THRIVING DURING THE GLOBAL PANDEMIC OF … · 2020-07-10 · 2 Surviving and Thriving...

Documents