Jason Hartman: Welcome to the Creating Wealth Show, this is your host Jason Hartman and this is Episode Number 157. Thank you so much for listening and joining me today. We really just want to say that we appreciate all of our listeners so much. We had about 130,000 downloads of the show in the last 30 days and its really just been a fantastic success, our other shows are growing so nicely as well and we appreciate all of you listening and we appreciate you telling your friends, your family and maybe even your enemies about the show. Anyway, please spread the word because we need more people that understand what is going on today’s world, the real story about finance, about what’s happening at the highest levels of the global financial system and really understand financial literacy because the more people that get it, the less likely we are to be facing the kind of challenges we are in today’s environment. So, spread the word and also spread the world about our Holistic Survival Show and our other shows. By the way, we had a little bit of a problem with our Holistic Survival Show the last two weeks we rebuilt the website so, go to holisticsurvival.com and check out the new site but there was a problem with the feed to iTunes so if you were for some reason unsubscribed accidentally, please go back and re-subscribe, we did just post show number 22 which is entitled, ‘Original Intent’ and it’s all about how the democratic and republican parties, both sides of the aisle are ruining America and I think you’ll really like that show. That was a movie I was involved in the production of entitled, ‘Original Intent’ and I interviewed the director of the movie and that’s interesting and then I just interviewed John Perkins, my favorite economic hit man. He’s written several bestselling books, probably the one you know of mostly is called ‘Confessions of an Economic Hit Man’ and that will be on the Holistic Survival Show number 23. Today, we’ve got a great show for you here on the Creating Wealth Show though and before I get to that I want to just mention again what do we have coming up. We have our best event and it is The Masters Weekend: A Gathering of Experts and this is shaping up to be a very unique, very special Masters Weekend. In fact, we just called the hotel today to see if we could expand and get a little bit of a larger venue for that event. So, if we need to, we’re going to enlarge the room and we have a great event coming up this time. So, that will be on March 6th and 7th and I have one other kind of unique offering for you on that. Listen up because this one’s pretty unique. So, here it is. We have a new product coming out and that is the best of The Masters Weekend. It is well over 15 hours of content from over 20 experts on the areas of taxation and how to save money on life’s largest expense, asset protection, 1031 exchanges. You will hear a lot of these topics covered at the upcoming Masters Weekend live but what we’ve done is, we’ve done kind of a best of Masters Weekend of prior Masters Weekends on audio. It’s over 15 hours long area experts, all of the stuff I’ve talked about on prior shows that The Masters Weekend is and we have this audio product that will be published very shortly and if you sign up for the live Masters Weekend, the upcoming event here at jasonhartman.com, any full price submissions will receive a free copy of this entire audio. So, this is $500.00 value that we will be selling as a separate product and any full price submissions receive it free as well as two tickets for the event. So, you and a friend or your spouse or whomever can attend the event live on March 6th and 7th plus, you get the audio, Best of Masters Weekend as well. So, that’s a pretty compelling offer. Go to jasonhartman.com and click on store and then events to register and we’d love to see you on March 6th and 7th. This is shaping up to be a very special Masters Weekend. All right. So, today on the Creating Wealth Show, what are we going to cover? Well, first of all, we’ve got a first part where Doug is going to talk about The Maters Weekend a little bit with me and about what he will be presenting, two different topics, one on micro-entrepreneurship or personal entrepreneurship and one of course, he had a highly interesting speech at the last Masters Weekend on real estate and finance. So, we will do that and then I will talk to Andre Eggelletion who is a expert on the Federal Reserve and he really delves into this topic in depth and we haven’t talked about this topic lately but that’s what we will talk about in the second part of today’s show. So, we’ve got about ten minutes with Doug and then we’ve got about 30 or 40 minutes with Andre and this is just going to be a great show. So, let’s get to it. Here, we’ll start off with Doug and then we will talk with Andre about monetary policy, Federal Reserve and what it all means to you. Let’s talk a little bit about the upcoming Masters Weekend. This is going to be the most exciting Masters Weekend yet and the most unique Masters Weekend yet. So, even if you haven’t been before, it behooves you to come again to this one because Saturday will be all about personal finance, investments, creating wealth through income property and then Sunday will be about personal entrepreneurship, how you can create immediate income, how you can create immediate cash flow through various business opportunities. So, I have Doug here on the line with me. Doug, how are you doing?
Doug: Not too bad, how about yourself Jason?
Jason Hartman: Good. Give us a little preview about what you’re going to be talking about on Saturday and then on Sunday of The Masters Weekend.
Doug: Sure. So, for Saturday, for the personal finance segment, the point of emphasis is going to be booms and busts, riding the wave of irresponsibility. So, most of us are well aware of the real estate bust and about ten years ago, everybody was talking about the dotcom bust.
Jason Hartman: The tech wreck, as they called it.
Doug: Yes, the tech wreck and what a lot of people don’t really think about that much is the extent to which the — these booms and busts are really created because you have an economy that will grow, it will get overheated, some people say because of animal spirits or because of people being irrational, other people say because they are <0:07:16.1> to be irrational which is what I think and then of course, there is an inevitable bust because trees don’t grow to the sky, you can’t have prices escalate forever. There is a big bust and the government says oh, my god, we need to do something about it and so, then when they do something about it, they either lose in credit requirements or they go spend a whole bunch of money that they have to borrow or print or whatever and that inevitably creates another bubble which precipitates another bust which creates another oh, my god, we need to do something about it and this is a repeatable — you know, this is a repeating cycle. It’s — I think the — the peaks troughs are hard to point out and say this is exactly when it’s going to peak, this is exactly when it’s going to bottom. But it is very, very possible when a bubble is coming and know when a bubble is likely to burst and that is something that could be extremely useful for investors because as I’m sure you well know, the worst thing in the world you can possible do is look on sand and money and say oh, look at all that money people are making from real estate, I got to get in right now. And of course, you know, by the time you hear something on television that’s usually when the prices are about to collapse.
Jason Hartman: Right. Yeah, good point. I think it was John D. Rockefeller that said years ago, he knows there is a bubble when he starts getting stock tips from his shoeshine boy, right?
Doug: Exactly.
Jason Hartman: Yeah, exactly and when all the taxi drivers are buying and selling houses, you know, that’s probably overheated too, isn’t it?
Doug: Absolutely.
Jason Hartman: But they are not doing that now, are they? So, big opportunities are being created by these boom and bust cycles we have, right?
Doug: Well yes, the opportunity right now is anybody who has credit and has capital, many of these assets are unbelievably undervalued. We frequently talk about the couple of houses that my wife and I have in Indianapolis. I picked both of those up for around 50 grand each put ten-ish a grand into them and then when I got my property tax statement, they told me that the structure value is worth like $75,000.00, that’s more than from front to back, more than I spent for the whole thing including putting new appliances, pretty floors and all that kind of stuff. So, I ostensibly got — not only got land for free but got paid to take the structure.
Jason Hartman: Isn’t that fantastic, there is nothing like good income properties as an investment.
Doug: Yeah, yes.
Jason Hartman: When you are buying at or below the cost of actual construction, financing for three fixed decades with someone else’s money, right?
Doug: Exactly, exactly and so the opportunity the busts create is that you go from having too many people in the market to not enough people in the market and so then you get an access of inventory that goes down to artificially low prices because either there is successive credit contraction and none of those people qualify or people get scared out of the market or in this case both.
Jason Hartman: Yeah, that’s true.
Doug: Yes, until the market re-equalizes there is going to continue to be this — it’s like a long term arbitrage, right, it’s where you have a bunch of assets that are priced significantly below their real value.
Jason Hartman: Fantastic. Well, that’s the opportunity as far as Saturday on the personal finance side, you’re going to talk about that and I’m sure much more as you always do. What about the business side, the personal entrepreneurship side? Because I tell you I hear so many people asking Jason, talk on the show about how I can create more income now. What are you going to talk about? We have many other speakers on both subjects, both days but tell us about your talk on Sunday.
Doug: Sunday is all about creative destruction, how innovation makes the rich get poor and it’s a little bit of a snarky title but the idea of my Sunday topic is that everybody always thinks about big business, big corporation and entrenched competitors and in the short run, yeah, entrenched competitors have a lot of power but in the long run, as you’re fond of saying, it’s not the big that eat the small, it’s the fast that eat the slow.
Jason Hartman: I love that book title, read it years ago, yeah.
Doug: Yeah. In the long run new innovation, new technologies, fast, nimble, smaller companies will figure out ways to either do the same thing as the big companies better or do something different that makes the big companies irrelevant and so in that way, the rich really do get poor over the long run because they basically get crushed by the weight of their own bureaucracy.
Jason Hartman: The same is true with governments I have to add <0:11:26.5 >.
Doug: But corporation can’t print money, that’s the difference.
Jason Hartman: That is the difference but they do in a way in the form of stock certificates and bonds, right?
Doug: Fair enough.
Jason Hartman: There is some big opportunities in this small lean nimble business and I got to tell you what’s happened in the last three years and I have to give them the credit with just really sort of the iPhone, it changed so much of the game technologically and — and really, really started making tech very, very usable for small businesses. If you are working out of a spare bedroom in your house or you are working out of that metaphorical garage where so many great businesses and so many great ideas start. With the internet, the world is your oyster and so we’re going to explore a lot of great internet marketing strategies, we’re going to talk about ways that people can generate income right now, actionable things to pick up another $1,000.00, $3,000.00, $5,000.00 and who knows what it might grow into every single month from a small home-based simple personal entrepreneur type of business. Any other comments on that?
Doug: Here’s just a thought for your listeners to chew on for a few minutes about why technology is the best godsend in the world for entrepreneurs. Being so, I work in a technology industry. I worked for the Intel Corporation. One of the things that’s very well known is what is called Moore’s Law which basically says that the number of transistors on a given microarchitecture or a given chip will double every 18 months.
Jason Hartman: Yeah, every 18 months they build in that sort of obsolescence right or you got to replace it.
Doug: Yeah. But another way of looking at that is to say that your cost per unit of compute or in terms of gadgetry, your cost per unit of cool will drop in half every 18 months. So, you figure, you know, as a small nimble entrepreneur who makes active use of technology, every 18 months for a given amount of investment, for a given amount of technology, you will be able to do twice as much.
Jason Hartman: That’s fantastic, that’s very powerful and it’s not just about the speed of the process when it comes to Moore’s Law, but it’s about all of the new applications insistence that are constantly being innovated to help entrepreneurs be lean but powerful at the same time and this is really a historic opportunity we have right now as far as that goes.
Doug: A great example of that is that the advent of the Moore’s Law is really what precipitated free email because back, back, back in the day, everybody had to pay for their e-mail addresses. But then what happened was, the cost of compute and the cost of storage got down to where the cost to the different providers of having one more e-mail account was effectively zero because all the cost of the infrastructure which they already had. So, now what happened was, you had one provider and they said, well hey, wait a minute, why don’t we just offer free e-mail and so then of course, everybody else copied them and then what happened when people — when people said well, everybody offers free e-mail, what are we going to do to differentiate, then Google said okay, we’ll give you X gigabytes free storage and then yahoo countered with, well, we’ll give you unlimited free storage and so what really happens is that this perpetually falling price of technology is always pushing the curb for new business models that use technology in some different way. So, one thing that my father is fond of pointing out is that when he started working for the City of Portland in, I think it was 1974, ’75 he bought, I think it was 30 — no, 40 megabyte hard drive that was about, I think five inches wide, three inches tall and nine inches deep and there is a one terabyte hard drive, external hard drive on the top of my PC at home that is smaller dimensions than the one that he used to have and I don’t remember the exact number but something like four orders of magnitude more space.
Jason Hartman: That’s fantastic, it’s really amazing and we’ve all seen that but the trick is not to make this a discussion of technology but the application of simple technological systems that are web based that can really, really help you grow an extra income every month, isn’t it? So, Doug, I’m —
Doug: Yeah, absolutely.
Jason Hartman: — I’m looking forward to your talk both on Saturday and Sunday, this is going to be a great Masters Weekend folks so make sure you join us. It’s my pleasure to welcome Andre Eggelletion to the show. He’s the host of the Nationally Syndicated Andre Eggelletion Show and that is on the ustalknetwork.com. Andre’s topics focus heavily on geo-politics and global economics as well as various hot button social issues. He’s the author of two books. His first, ‘Thieves in the Temple,’ ‘America Under the Federal Reserve System,’ is a candid look into the hidden mechanics of America’s monetary policy and to date, Andre is the only African-American in the US history to pen a major critique of the privately owned Federal Reserve System. His latest book ‘Where The Right Went Wrong On National Security (And The Left Too)’ gives us an unflinching view of how America’s national security strategy has been used to advance the interest of America’s oil cartels and multi-national corporations. Andre, it’s a pleasure to have you on the show.
Andre Eggelletion: Thank you so much.
Jason Hartman: You are really a very insightful expert on the Federal Reserve and our listeners are interested in this topic. We think it’s largely a scam for lack of a better word and tell us about — little bit about the history of the fed if you would.
Andre Eggelletion: Well, first of all I want to thank you for having me on again and G. Edward Griffin is a man who I deeply respect and admire, I quoted him a lot in Thieves in the Temple, America under the Federal Reserve System. I’m so glad that there are more people in this country that are waking up to what that Creature from Jekyll Island or the Federal Reserve System actually is. And there is nothing federal about it. There are no reserves, it is a privately owned government run, it’s a privately owned cartel set up for profit that has been given the unconstitutional unilateral prerogative to control money and credit in America, all money and credit and this is unfortunate, it is as I said, unconstitutional and the average American is ignorant of the fact of the independence of the the fed. Alan Greenspan had said very recently in talking about the current economic crisis that the Federal Reserve is independent, they asked him about whether or not the incoming administration would work well with the fed and he once again reiterated the fed’s independence and — and also said that as long as Congress or The White House does not interfere with the fed’s independent operations then it doesn’t matter, you know, whether or not the relationship personally between the fed chair and the president of the United States, it was a healthy one or not, they are independent, there is no oversight virtually that the people have with the exception of their addresses before Congress and their congressional meetings that they come to from time to time but there is no oversight on the fed. As you know, the Federal Reserve as we’ve said is a privately owned corporation. It was passed through Congress on December 23rd, 1913 by a unanimous vote of three. The very next day, Woodrow Wilson signed it into law and America was shackled to its fourth failed experiment with a privately owned central bank and what can we say from here, I mean they have presided over the systematic devaluation of our dollar, a very unstable economic environment, we went through the great depression with the Federal Reserve, we took on tremendous debt, thanks to the Federal Reserve after World War I and World War II and now, we have arrived at a juncture in our history wherein the banks are not solvent in spite of what Treasury Secretary Paulson recently said that the fall basically of these banks has been arrested in that the banking system is on solid footing. Ironically, a week later, he ended up bailing out city groups, about $351 billion, it was $308 billion doled out to them a couple of weeks ago. So, you’re looking at $351 billion. The banking system is not solvent, it is not on solid footing and this is what happens whenever a society experiments in fiat money and whenever a society gives up its moral obligation to handle its monetary policy and to make that monetary policy such that it would not violate even spiritual principles, we read about usury even in the Bible many times and the Bible constantly speaks out about the perils of usury. Our entire system is based on usury and the debauchery of currency. There is nothing to back up our Federal Reserve notes, it is a total fiat currency, it is a manufactured monetary note by a group of private businessmen basically out for profit and as every society has, which is experimented with unbacked currency has always ended up in financial ruin. Our society is no different and we’re seeing that now and many of the warnings that I sounded five years ago upon — upon the publishing of the ‘Thieves in the Temple: America Under the Federal Reserve System’ are being fulfilled now. We have seen a collapse of the housing market, our automobile industry just today was required to submit their final proposals to Congress for how they would make their companies “more viable,” I don’t see many changes not of anything of substance that they have come forward pledging to do with the exception of maybe they are going to speed up, you know, some hybrid cars or something. You know, it is nothing dramatically different that will be changed with their business model and this is unfortunate and they are asking for 25 billion. The Federal Reserve has been creating and injecting into our financial system approximately $77 billion a day since March 2008.
Jason Hartman: The bailouts are now totaling about 8.5 trillion with a T dollars, I mean, this is —
Andre Eggelletion: That is true.
Jason Hartman: — unbelievable and they’ve tapped into already 3.2 trillion dollars, so this is just fake money that is being created out of thin air and we believe of course, that it’s going to lead to dramatic hyper inflation. I don’t know if it will be Zimbabwe but it’s not going to be pretty for people who hold dollars, who save money, who — who do the right thing, Andre, is it?
Andre Eggelletion: I agree with you, I think that our economy is such that we still have enough strength in terms of America being a consumption basket for the rest of the world and the potential for some productivity that we are nowhere near becoming Zimbabwe however, you are absolutely correct in pointing to the fact that these created dollars out of nothing at all, when you look at them as what the quantity theory of money, you know, requires us to look at it as whatever you put more money than what you actually needed, you know, you end up with inflation, the more money you print, the less the money will buy and you have inflation. So, it’s the — you know, it’s the inherent nature of privately owned central banks experimenting with fiat currency to be inflationary and our society, just because we are living in and just because we love it and just because it has been more successful than most other models that have been on the service, it will not be an exception to that rule. We are going to have to deal with the ramifications of riding from crisis to crisis on Mr. Greenspan’s liquidity machine. You know, it’s no way to run an economy, our economy is being run on the Federal Reserve’s printing press and on borrowing money from people who have before been known as our enemies and from pawning our infrastructure to them. This is no way to run an economy and we — the only solution, the only solution is to return to the constitutional mandates of our monetary policy, abolish the Federal Reserve System and move forward.
Jason Hartman: Okay. So, I’ve got several questions for you, Andre. First of all, who owns the fed, is it the Rothschilds’? You say the private bankers and these private banking interest, I know a lot of them are really off shore but they are pulling the strings of the US economy and they are not even — they are not even US citizens. Who are these dark secret interest behind the fed that keep this and perpetuate this machine that is just sucking the wealth out of Americans?
Andre Eggelletion: Well, of course the big banks in New York are the major shareholders in the Federal Reserve System but, you know, someone controls even that. There are families in Europe of course, that have tremendous influence over the Federal Reserve System but in answer to your question to be succinct, we really don’t know who owns the Federal Reserve. The Federal Reserve is a mystery wrapped up in an enigma inside of a riddle in terms of who owns it but what I can tell you is this, it really didn’t matter to me who owns the Federal Reserve, what matters to me is that we are in a recession right now and the Federal Reserve and it’s monetary policy has failed to avoid it, also they do not provide the sufficient stimulus to correct the problem. By printing money, they are only hyper inflating and destroying the US dollar, thereby, bringing about one of the most monumental and global depressions that we can possibly imagine.
Jason Hartman: And you know this was the whole pitch is that they would even out that boom and bust cycle —
Andre Eggelletion: Yeah.
Jason Hartman: — when they passed this three days before Christmas when no one was looking back in 1913, this was the pitch wasn’t it, is that we would eliminate these — these booms and busts and — and shortly after that, we had of course a boom of the roaring 20s, then a bust of the great depression and we’ve had many others in between, we’ve had wars, we have had all kinds of crises.
Andre Eggelletion: Yeah, absolutely correct —
Jason Hartman: That just didn’t happen <0:24:43.3>.
Andre Eggelletion: — and when you know in advance we have, you know, inside information in advance and you are actually able to some extent more so in the past than today but to actually create these boom and bust cycles then you are uniquely positioned to exploit the recourses and wealth of not only our country but virtually every living thing on the planet particularly on a globalized economic system. So, the Fed Reserve is a institution of frightening power in United States but yet today, it’s an institution primarily run by a group of frantic guys pretty much riding the back of a tiger, what they unleashed in 1913 in many respects in terms of the changes in our economy as a result of the establishment of a privately owned central bank is a globally maligned economic dynamic that they themselves are having a tough time trying to control.
Jason Hartman: The Federal Reserve I mean, it doesn’t really get audited right? I mean it has goal but nobody knows how much. What goes on there with these complaints about the secrecy and — and no real accountability? Tell us about that.
Andre Eggelletion: Well, there again, I mean, as I already said, I mean, the Federal Reserve is a very unaccountable agency that operates alongside of the US government. On their website, they tell you that they are a hybrid kind of institution, not completely publicly owned and not completely privately owned, a big difference with their —
Jason Hartman: I don’t know where it is publicly owned at all.
Andre Eggelletion: — assessment. Yeah, it is a totally privately owned institution. The government has no say so over the Federal Reserve’s physiology. It is an institution as I was saying that there is no accountability.
Jason Hartman: Yeah.
Andre Eggelletion: And there is no way to gauge really the impact that the Federal Reserve has had on our economy. I mean, think of what America would have been like had we followed the prescription of the founding fathers who were truly wise individuals.
Jason Hartman: It would mean that if you had a hundred bucks back in 1920, that would still be worth about $100.00 in real dollars today, wouldn’t it? Without a central bank.
Andre Eggelletion: Exactly, right.
Jason Hartman: Can you imagine if you could bury that money in your backyard, leave it there for a hundred years, dig it up and it would still spend just as well as it did a hundred years earlier, that would be an amazing thing as a store of wealth.
**Doug: Yeah well, you know, we got off of commodity based money, we got off of receipt based money, we got off fractional based money finally, in August of 1971 and since that time, the Federal Reserve note has been totally fiat, there was nothing to back it up and they are printing ungodly amounts of it, in order to provide some sort of stimulus to the economy, I mean, it may be a short term fix — you know, fix the balance sheet and a lot of corporations and banks in this country will have more money to lend but the ultimate effect of it all will be an erosion of the purchasing power because we’ve simply printed too much money. There are simple solutions to the restoration of manufacturing, construction and virtually to every other aspect of the us economy and it begins even before you would eliminate the Federal Reserve System. First of all, we’re going to have to address the tremendous trade imbalances that exist between the United States and our trade partners and particularly Asia, China. The — you know, as long as the trade balance is as far out of whack than it is, we will not produce jobs in America. We are on the wrong economic model, we are borrowing to facilitate spending rather than broadening our tax base by having a robust healthy environmental business and industry in America.
Jason Hartman: Part of the problem with that is that — is that you’ve got the environmental movement in the US that is so strong. Every time someone wants to manufacture something, they saddle them with so many regulations and rules and laws and if it’s not the environmental movement, it’s the — it’s the labor movement. Look at these auto companies paying these union guys $73.00 an hour. You just can’t compete with the global economy.
Andre Eggelletion: You know, I heard both of those arguments and I agree, you know, that both of those things provide a depressive stimulus on business and industry, I agree with that but I want to broaden your view on this.
Jason Hartman: Sure.
Andre Eggelletion: I mean, I don’t think that it is the sum total, reason why a business has opted to move overseas. It is the free market corporate ideology and I have a whole chapter in my book, ‘Thieves in the Temple: America under the Federal Reserve System’ dealing exclusively with this whole free market ideology and it cut out Adam Smith as a patron saying, you know, and Smith and others of his time talked about price optimization. Well, price optimization in economics basically says that a producer of a product to a service is entitled to get the maximum profit from his product to a service that his marketplace will bear, okay, that’s great and — and in 18th century economy in America.
Jason Hartman: It’s a different world now, isn’t it?
Andre Eggelletion: <0:29:34.1> economy, yeah, I mean and when our economy was closed, where — our economy has now been fully and almost completely and fully integrated with the global economic dynamic. So, in order to seek price optimization and in order to seek — in order to seek the maximum amount of money for the goods and services that they produce they seek cheap labor abroad and they import cheap labor here into the United States much to the detriment of those individuals who have really, really with their blood, their sweat and sacrifice that was coerced, forced or voluntarily given by all Americans.
Jason Hartman: Um-hmm.
Andre Eggelletion: They are coming in and they’re reaping the benefits of such a wide sacrifice here in this country, in order to contribute to the greatness that our country has achieved thus far. So, you know, unless we create some fairness in free market corporate capitalism, in other words, this is not fair for a corporation to be able to go into another country, sell the operations just because they have reduced environmental standards and reduced workers’ safety standards and various other labor standards and — and wages in the whole nine yards is because they could seek cheap labor in a — in a more sympathetic operating environment doesn’t mean that it’s necessarily the right thing to do. They have totally obligated their responsibilities towards patriotism, nationalism, even humanism to their own people. The Bible says, “If a man didn’t take care of his own family, he is worse than an infidel.”
Jason Hartman: Well, I agree the modern American corporation has no soul whatsoever.
Andre Eggelletion: Absolutely.
Jason Hartman: It move — it moves in and out of countries wherever it can get the best deal, it’s total extreme free agency —
Andre Eggelletion: Like locusts.
Jason Hartman: — it’s extreme capitalism, that’s not bad on its face necessarily, but it has a bad result and I agree with you there. But what do we do? Do we do tear-ups? Do we become protectionists? I mean, what’s the answer for that?
Andre Eggelletion: The answer for it is in the current protocols of the World Trade Organization, that’s number one, as well as the structural adjustment policies of the IMF and the World Bank. Until countries abroad are not forced into debt slavery by in some instances being required 75 percent of their gross domestic product for debt service. And until these countries are allowed to develop a self-sustaining socio-economic infrastructure, then we will continue to see unbridled and massive immigration into the United States, that’s step number one. Step number two, we’ve got to correct the trade agreements. I don’t like being consigned as a consumption basket for this planet. They should be able to consume more than $1.00 for every $31.00 of our consumption of their products and these are people that all my life, I was told my — were my enemies. The image of Dubai, the Russians, I mean the — the Chinese, we are borrowing money from everybody inside, you know, and — and we were investing money, a very despotic regime. So these are the kinds of fundamental issues that I think have been ignored by way too many people in this country and unless we address to that that level because we’re dealing in a global economic dynamic. President Bush’s response to globalizing or — or internationalizing the response to the financial crisis that really had its germination here in America is to get other countries involved. But his response is running to Peru, and installing the so-called virtues of the Doha Round, you know, we’ve lost enough jobs to foreigners. Why take more to Columbia and to South Korea and Panama, come on, I mean, they already enjoy de jure dollarization, they don’t have a central bank in those countries. Panama particularly, therefore, they don’t have the kind of national debt strain on their fiscal policy as — as we do here in the United States. Now, they want our jobs on top of it, I mean, how much more can the American labor market and the American consumer take? You know, I’ve been coughing my spleen up about this for five years. Finally, a few people are starting to listen but, you know, something we just have to continue.
Jason Hartman: Yeah, I know, I mean I hear that in various areas of Michigan, the unemployment rate is approaching 30 percent or even higher and I think the unemployment statistics are grossly under estimated just like the inflation statistics are. But there is a depression in Michigan, I don’t know what else you call that.
Andre Eggelletion: Michigan, Ohio, I mean you’re absolutely correct in that. You know, and — and this is another tenant of the free market idea laws, we believe that the GDP, as a measurement, is the most accurate measurement to gauging economic progress —
Jason Hartman: Well, that — that would be true if it weren’t all about consumption, the GDP should not be a consumption-based GDP. I mean —
Andre Eggelletion: I agree.
Jason Hartman: — that’s what we’ve been telling.
Andre Eggelletion: Not only that, it leaves out so much economic activity in the country. I mean, America is becoming and is going to have to become even more of a borrowing centered country. I mean, you think about all of the borrowing that goes on in America, the number of cash transactions that escape the GDP assessments, it’s just as flawed and skewed, not only that they can be played with to make America appear to be more viable than it is in a global economic environment. These are fundamental questions that we’re going to have to resolve. I get it with the union thing and with the environmental thing but trust me, it is only a drop in the bucket when you look at the overall macro view of the number of drags on our economy, the weights that are holding America down from being what it really could be and I hate to go, you know, spiritual on it but, you know, we violated certain principles spiritually. And, just like you violate the law of gravity, violating those principles in our economic practices, there’s a price to pay.
Jason Hartman: Well, let’s — let’s talk about that for a moment. Money and morals and the Federal Reserve, make the connection for us if you would. Alan Greenspan, of course, had that famous article he wrote in the 60s and he was buddies with Ayn Rand and gave the eulogy at her funeral and so forth and seemed to be a sell out against his free market principles. But of course, the people on the left are criticizing him for being too free market saying, see that’s what got us into this mess. I think the true answer is somewhere in between, but what about peace and the gold standard, the relationship of fiat money and central banks and — and wars and so forth?
Andre Eggelletion: Well, I think a return to the gold standard is the solution, simply because there is too much of certainty about America’s gold reserves. I do suppose that if the dollar were fully backed by gold, it would probably be — gold would probably be about 40 grand an ounce right now.
Jason Hartman: You’re probably right.
Andre Eggelletion: So, I don’t think the return to the gold standard is — is the — is the solution.
Jason Hartman: Well, I don’t think it’s even possible, it wouldn’t be possible anywhere in the world, really probably.
Andre Eggelletion: No, it wouldn’t, it would be —
Jason Hartman: Yeah.
Andre Eggelletion: — it would be too disruptive.
Jason Hartman: You could try silver, you could do partial backing, I mean, you had this sort of Brettenwood’s two meeting that I want to talk —
Andre Eggelletion: I agree.
Jason Hartman: — to you about in a moment. But go ahead and — and finish this topic.
Andre Eggelletion: I agree, I mean we could — we could return to — to fractional money, absolutely. And I think one of the biggest mistakes we made in ’71 was going off the gold standard completely.
Jason Hartman: Well, why did Nixon take us off the gold standard? Why — why — I mean, I think I know why he did. We have the reserve currency, we still do for at least the moment and we were running into huge economic problems but, maybe you can talk about that a little bit.
Andre Eggelletion: Well, to be brief and to be simple about, I mean, you know, oil is actually the commodity wherein the dollars worth is more calibrated so — more so than gold right now than was in 1971. So, this is the area of the petrodollar and there are so many things I could talk about with that, I mean, one for instance, I mean, this terrorism thing. You mentioned you wanted to talk about that.
Jason Hartman: Oh yeah, you mean the Somali pirates?
Andre Eggelletion: Yeah, yeah, the Somali pirates. We indirectly fund a lot of terrorism around the world without petrodollars. The Saudis are not our friends and every administration says 1945 has been joined at the hip to this hideous regime, I mean they are very mischievous, they complicate America’s ability to be able to advance its foreign policy, particularly through the use of soft power. As soon as opaque was created, one of the first things they did was enacted a bargo against America. They are sworn enemies of our allies in — in the region and it’s a significant problem. But nonetheless, they simply swap, you know, gold for oil in ’71 and that’s basically the main reason why they took us off of the gold standard, which, in addition to — it has always been a desire to have a global fiat currency in the first place. They got <0:37:49.9> presidents are in addition to being stubborn constitutionally mandated leaders of America, they are also the cronies and the fairest little pools of the international bankers. So, this is what they wanted, the time was right, America was being exacerbated financially because of, you know, the funding of the Vietnam War. And out of various tentacles of experience, Nixon decided to end the gold standard.
Jason Hartman: Yeah boy, that was a real — a real change and that’s when we’ve seen huge destruction of the dollar. The connection between wars and the Federal Reserve and central banks, is it really Andre, the fed make so much money when there is a war? They look for more spending so they can make more loans to our government that sort of comes back to that money and morals question.
Andre Eggelletion: Yeah, absolutely, I mean war and killing have always been profitable businesses since the dawn of time for those who manufacture the instruments of war. A bank primarily makes its money by generating debt and nothing generates more debt than war. Our economy has suffered astronomically as a result of taking on the debts from World War I, World War II, Korea, Vietnam and this current war in Iraq is going to end up costing us probably three and a half trillion dollars by the time it’s all over. And the sad thing about this war is there was never really given to the American people irrefutable proof that this war was even necessary in the first place. So, you’re absolutely correct, I mean, you know, America’s broke with the greatest debt of nation on the face of the earth, yet by some miraculous reason, we’re still the guardian of the world’s reserve currency. That is only temporary though, because personally, I think we’re headed, head long into regional monetary integration. Matter of fact, I talked with Professor Peter Kenen, a Federal Reserve Advisor, several weeks ago about his book of the same title. And — and then so ultimately I think the US dollar remaining a reserve currency in the world is a moot point because it’s going to be supplanted by the Amero or some other, you know, regional currency.
Jason Hartman: So you really think an Amero is coming?
Andre Eggelletion: Absolutely. Absolutely, I mean all of the steps are in place. Before we can have a regional monetary unit for Canada, the United States and Mexico, there are certain prerequisites that have to be put into place. We would dare not make the same mistakes in the advance of a new economic dynamic as we have made — a new monetary dynamic as we have made in less developed countries and bring about a new political dynamic. Usually, you know, when we talk about spreading democracy around the world and a country is not ready for that democracy, if it does not have the prerequisites in place: the roads, I mean the transportation, the communication systems necessary to build the strong republic or strong democracy if you will, then it’s going — this movement is going to fail, and which you have taken away from the people that they’ve already had will only anger the people with what they get. For me, you know, in lieu of this change, if you take one form of government from a — a people at a developing country and — and — and give it — and attempt to give it another form of government and they are in a worse place, they are in a worse situation than they were before, they got to reject what you’re trying to give them, it’s the same thing what regional monetary integration. Until we have sustainable trade agreements between the United States, Mexico and Canada, I don’t think you’re going to have a consensus in either country for regional monetary integration, they’ve already done that from a policy perspective, thanks to de jure dollarization. But in terms of a practical sense, there are certain prerequisites that we’re going to have to be met. Infrastructural redevelopment is going to have to take place, as well as, like, I was talking about before, sustainable trade agreements, until that happens we won’t have regional monetary integration. However, I do think that it is a foregoing conclusion for this hemisphere to follow some semblance of the EU model.
Jason Hartman: It’s sort of interesting though, if we’re really going to see the collapse of the dollar or we’re going to see before — prior to the collapse of the dollar, which I think is sort of inevitable at some point, I don’t know exactly when, but I sort of peg it around 2012 for some odd reason.
Andre Eggelletion: That’s when Tony Blair said it would be.
Jason Hartman: Oh really? Oh,
Andre Eggelletion: He said that like — oh yeah, he said that like five years ago.
Jason Hartman: Uh, interesting.
Andre Eggelletion: That the dollars hegemony would last until 2012.
Jason Hartman: That’s a very interesting point. So, so, whenever this happens, what do you think Andre, part of our big strategy is to game the system as I was mentioning to you before by taking on a high quality, long-term fixed rate debt attached to what I called packaged commodities, rental properties, very cheap land because I think real estate is basically going down in value, but I think that the commodities, the structure, the house, the apartment building sitting on the land made of copper wire, petroleum products, steel, lumber, labor, concrete, energy in general, is got a very bullish future, yeah pretty bullish on commodities overall, I mean, there are short-term blips of course and we’re going through one now. I think that’s going up though and debt is going to be destroyed through the destruction of the dollar. Is there any way, I keep trying to think of a way that they could try and penalize the people like me and like our clients who are trying to kind of game the system, if you will, but I can’t think of how they would do it? If the dollar becomes worthless then the debt becomes worthless, right?
Andre Eggelletion: Well, the only think that I can think of right off the top of my head that they could do again would be to repeat what Roosevelt did and simply call in whatever commodities you possess.
Jason Hartman: Well, you mean gold in that case.
Andre Eggelletion: And primarily I assume you’re talking about precious metals.
Jason Hartman: Yeah, but —
Andre Eggelletion: They can be called in.
Jason Hartman: Yeah, yeah, right.
Andre Eggelletion: And you —
Jason Hartman: And they — and they have done that before. And, you know, people —
Andre Eggelletion: Absolutely.
Jason Hartman: It’s amazing, I was listening to Alex Jones, a big conspiracy theorist, I’m sure you know who he is. And he was talking about how they’re going to confiscate gold again and stuff like that and people seemed to think that so crazy like it’s happened here already. I mean it happened —
Andre Eggelletion: Absolutely, I mean they can’t do it again. The only coins that would be exempt — the only, you know, metal that would be exempt really are collector’s coins.
Jason Hartman: Right. Well they have the non-confiscatable coins like the same guardians but they can make any law they want —
Andre Eggelletion: Pretty much.
Jason Hartman: — they don’t have to make those exempt, they just happen to be —
Andre Eggelletion: And I want you to keep this in mind, including much of the holdings of foreigners by in the United — here in the United States can be confiscated. I mean there’s — there’s a wide latitude in terms of those kinds of a draconian and — and measures that could be taken by the government should the economic crisis that we’re suffering right now get to that point. And, it is not unreasonable to imagine that we could get to a point like that that would require the government to take those kinds of extraordinary measure — measures. So yes, it — it could happen, I mean there’s always a way, more than one way to skin a cat, good or bad.
Jason Hartman: Sure, sure, I’m sure you know Catherine Austin Fitts, she’s coming up on —
Andre Eggelletion: Yeah absolutely.
Jason Hartman: — on my show here and we’re going to have her on too. And you know she says that the — kind of the question that’s so obvious when we’re talking and any — I’m talking anybody about the subject is, why the heck is the dollar still the reserve currency? Why is it still so strong as it is? Why are the Chinese even buying our treasure bills at all? Why are they willing to sort of take part in — in what seems like a bad deal for them? She says our military is just basically intimidating them into doing this.
Andre Eggelletion: Pretty much, I mean this is the way — this is the way we’ve — we’ve always said that’s corporate America’s interest, which is what my second book, ‘Where The Right Went Wrong On National Security (And The Left Too)’ is all about. I mean leaders, though despotic they may be, are targeted by America for removal, particularly when these countries have — and then that is if these leaders are nationalistic. And these countries have, you know, resources that corporations in the west desire. We’ll simply label that leader of communist or a terrorist sympathizer, you know, in the grounds of national security, thanks to the National Security Act of 1947, the president has almost imperial, unilateral, prerogative to do whatever, in order to remove that strategic threat to the United States, case in point, the Iraq War. Wherein the real motivation behind the military action in these countries has been to facilitate a corporate agenda and it has far less to do, sometimes even nothing at all to do with the national security, as we have —
Jason Hartman: So — so — so you look —
Andre Eggelletion: — presuppose.
Jason Hartman: Okay, so you look at a rock and a leftist have said, “Well, Bush is just trying to — Bush and Cheney are just trying to make money for Halliburton.” I mean, Cheney doesn’t even work for Halliburton anymore, is that really — is it just the Halliburton connection? Is that it? I mean we’re not — we don’t seem to be taking all the oil, we don’t seem to even be paying ourselves back for the war from the oil, which is one of the pitches Bush made originally, as I recall. What’s the big agenda in Iraq for example?
Andre Eggelletion: Well, you know, there are — the agenda is much of — really larger than that. East was pitted against west in the early 1900s when certain Wall Street interest decided to facilitate a proxy <0:46:43.1> in Russia and ended the reign of the Czars and created the Soviet Union of Socialist Republic. As long as we have east pitted against west, the international bankers stand to profit immensely. What we have seen as a result of those actions in 1913 is numerous proxy wars, police-keeping access, low intensity conflicts, you name it, you know, we’ve seen much of that, you know, over the last hundred years or so since 1917. And it has everything to do with simply exploiting these countries, both on the east and the west that are both driving for global hegemony of their wealth by a small group of international bankers forming a curtail. No, the war in Iraq was not exclusively about Halliburton. It in it of itself is a — a chess move in a 90-year long game of — of hegemonic mastery between east and west. And what America has really done is, and to a large degree, placed a strategic noose around Russia’s neck with the — the actions inside of Iraq. So, this is — this is where, you know, one of the reasons why we went into Iraq in the first place. There are many reasons why wars get started, I mean, you had the hegemony of the dollar, you had pure greed, you know, on corporate America’s side, you had all kinds of agendas involved in the genesis of the Iraq War, just like we do with other wars. But when I look at the macro picture, when I look at it, I see a game wherein east has been pitted against west. And we — we’ve had all these proxy wars.
Jason Hartman: So, let’s go back to the Federal Reserve stuff for a moment here. What is the connection between the — the Federal Reserve was created 1913 and then the IRS was created right about the same time, what’s the connection there with the Fed and the IRS?
Andre Eggelletion: The IRS has to be in place to basically guarantee our debt wherein not for a internal revenue or a federal income tax, which was declared as constitutional in the 19th century. Then Congress could put pressure on, you know, these banks to — at the very least keep the debt small but, you know, the IRS is basically their collection agency.
Jason Hartman: So — but I mean if you didn’t have an income tax, a national income tax and you just had it the way we used to have it with States only, the money is controlled by the Federal Reserve. I don’t know why you necessarily need an IRS if the banker set up this cartel called the Federal Reserve, they control the money supply, they control interest rates, they make money harder to get — credit harder to get, credit easier to get, they could still control cycles in the economy and control the value of money, and artificially suppress gold prices for example, without having an IRS, it would seem to be but maybe I’m not seeing that interplay well enough.
Andre Eggelletion: I agree with you. I mean, we don’t need a federal income tax to raise revenue. There are two other ways and the government has opted to utilize both of those methods, and that’s borrowing and printing. So, you’re absolutely right, I mean the third way our government raises revenue is new taxation, but it — it’s sort of a governor on guaranteeing the independence of the Fed. Like the governor run an engine to keep it from revving only so high, if ever, the American people think about rising up, you know, you got a whipping stick, the IRS.
Jason Hartman: Yeah, okay, that’s a good point. What about the Brettenwood’s two thing? We have this meeting a couple of weeks ago, the G-20 nations got together and they talked about, who knows what the heck they talked about. Theoretically, they say they never talked about gold, I can’t possibly imagine that. What do you make of that meeting? There doesn’t seem to be much information about it.
Andre Eggelletion: No, you know, things like that are always going to be extremely murky and opaque. I’m sure that roles were probably assigned as to how the governments of the world would respond to the current financial crisis, Citigroup for instance. You’re looking at an entity with over 200,000,000 customers, and virtually, every corner of the globe, something like 1,600 of — 16 countries in Africa. And roles have to be assigned as to, you know who’s going to deal with what, there are a lot of considerations that are brought to the table at a meeting like that along, you know, strategic lines that every country jocking in position, jocking for their positions of strategically in the world. And then there are lot of things they had talked about I would imagine at a — at a meeting like that. But it’s disturbing to me that the American people have been asked to contribute so much in terms of our wealth to correcting these problems. When the faiths of every country virtually on the face of their — particularly those countries in the G-20 are all linked together. It is unfathomable to me that if we’re going to have a global economy that the United States of America should still contribute the lion’s share of the funding to organizations like the World Bank as well as bail out these institutions that are indispensable for a global economy. So, I don’t know what was said in short, I’m sure that there were many, you know, things discussed, but, based upon the history of the past, I don’t have a very high expectation that the American people won’t be given some liberation from — from carrying the load of — of correcting the global economy.
Jason Hartman: What do you think about these central banks? They’ve been accused of suppressing and manipulating precious metal’s prices. Obviously, they want to promote the fiat currencies, how are they doing this? What do you know about that?
Andre Eggelletion: I — I really don’t think gold has, you know, very much to do anymore with the dollars’ relative value to other hard currencies around the world. I think that the dollars’ valuation is basically under the control or the influence of a lot of variables, the advent of Forex trading for instance, I mean the influence there can never be under estimated. But, I think, you know, and meetings like the one you described and at meetings where in the central bankers will meet with various finance ministers from countries around the world, these kinds of allotment questions are answered there. So, in — in — in short, I don’t think, really the — their manipulation of gold is the total controlling factor over the dollars’ valuation. I think that the dollar is valued by so many other influences but central banks can buy gold and when they buy gold, they make it scarce of course, you know, they run the price up, they can sell gold on the open market and of course, it — there would be increase of gold in supply. Generally, it tends to bring the price of gold down, but in terms of, you know, using gold as a tool to manipulate the currencies of the G-5, I don’t think they’re doing that.
Jason Hartman: Yeah, very interesting, okay. The Fed is obviously devaluing our money, fiat money is not a good deal for the average American. What do we do about it? How do we dissolve the Fed? What control do we have here and right, your congressman, what do you — what do you do? And all I say you just use — you just game the system by using debt in a positive way. But what’s the bigger vision? What do we do for the country? What do we do for society?
Andre Eggelletion: I think the response to this economic challenge that not only the Federal Reserve presents to the American people. But, all of the harshness that globalism presents to the American people in, what in my opinion has become a subordinate role for American and a global economy, almost today. The response all of that would vary depending upon the unique circumstances of the individual, the technique that you employ, simply utilizing debt as a leverage is going to work for a lot of people and — and, I don’t have anything negative to say about that, but for some it maybe as simple as paying down whatever debt you have. It is all I think where you are in life, you know, what age you are, I’m concerned about our children more than anything. Because they’re going to grow up in a world wherein the opportunity that you and I had growing up — I’m 50, I don’t know how old you are, but the opportunity that we had, they’re not going to have that opportunity. I mean they would just flat out and not going to have it, I mean you could slip around and just be a slacker when we were coming along, we still had our expectation in this country of one day owning your own home and being a proud parent, standing up taking care of your family whether you are a man or a woman. But today, I mean, our children only have an expectation of debt slavery, they only have an expectation of unimaginably unfair playing field in a global economic workplace so, in short, I think that to get rid of the Federal Reserve System would have to be done gradually, you’d have to phase it out, you couldn’t do it overnight. Ron Paul knows — he know a lot more about getting rid of the Fed than I do. I would read what Ron Paul has had to say about it and take steps as individuals. For those individuals that, you know, your prescription is working four days, continue following that. It will take steps as individuals to insulate yourself and then protect yourself from — from the harshness of this economic environment. Right now, we’re seeing unprecedented volatility in a Wall Street and I think that that volatility will probably persist as long as there is no light at the end of a tunnel, as long as there was uncertainty to the degree that we’re seeing uncertainty in our market as long as that persist, I think we’re going to continue to see, you know, these wild swings in the market. Ultimately, I’m very embarrassed on our markets, I think that we’re going to see a correction back to the levels that they were five and a half years ago, I’m talking about <0:56:14.0>. So you have to take steps and that means I, too, am bullish on commodities, gold and oil right now in my opinion is — is a bargain. There are some companies here that I think, you know, hold some promise, I like Sempra Energy out in California that it developed the meters that go on the side of your house that can control the thermostat in your house using digital meters. You’re out of power company to control the thermostat and you have to save a little bit on your electric bill, and whether or not you think that’s an invasion of your privacy is — is immaterial, the point that I’m making is, here’s a company that everybody now is starting to buy their digital meters that they hold the patent on. So I think, you know, companies like that that are well research on solid fundamentals will ultimate — ultimately do well. You know, even a company like Sherwin-Williams, you can look at, you know, you don’t have to look at the future prospectus, look at what they’ve done in the past. Sherwin-Williams, <0:57:03.0> they post the losses, 1979, and also I would look to companies with solid fundamentals and that’s where I would invest if I’m, you know, a stock guy. And — and again, I would focus on more becoming an investor rather than a trader, they’ve got all — I would avoid these, get rich quick trading schemes that you find out about on television where you can make a mid trading Forex currency or you can make all kinds of money de-trading, I’d still clear of that.
Jason Hartman: Couldn’t agree more.
Andre Eggelletion: You know, and — and just look at the long-term as an investment. But I hope that I’ve been helpful to you listeners and I definitely want to thank you so much for having me on.
Jason Hartman: Sure. Thank you so much Andre Eggelletion, it’s great to have you on the show and we look forward to talking to you again.
Andre Eggelletion: Very good.
Jason Hartman: Bye-bye.