In the first part of the episode, Jason Hartman talks about wealth distribution and how it might change soon. He explains that high earning, highly educated people leaving previously favored cities will change the face of suburban America. In the interview segment, he hosts Charles Goyette, author of The Last Gold Rush…Ever! 7 Reasons for the Runaway Gold Market and How You Can Profit from It. They first discuss ‘socialist distancing’ instead of social distancing, then move the conversation to US dollar, check kiting, and socialism in the US. They also talk about gold and whether it’s an investment, insurance, or a currency?
Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multimillionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in 1000s of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 0:53
Welcome to Episode 1613 1613. And greetings from Missouri. Yes, I told you I was traveling, I’m at a conference and headed home here soon, but it’s a chilly, chilly place, but not much chillier than Florida. Up here this time of year, believe it or not, I think I think we kind of got lucky there’s no snow storm going on here in Missouri. So that’s good thing. Anyway. Wow. Are you happy? are you grateful? are you grateful? You’ve been listening to the creating wealth show and following this fantastic advice? I hope so. Because I am looking at a Bloomberg article right now showing what is happening in San Francisco. Here we come right back where we started from? Is that how the song goes? I think so. Anyway, you don’t need me singing too. But you should be singing the praises of listening to our great advice. Yes, that would be a good idea. Because rents are absolutely collapsing in San Francisco, Los Angeles, New York. It is it is staggering, really staggering. And here is something this is leading to that we have only touched on on the show haven’t gone into great depth here. But you know, my old theory that I talked about how 1516 and 17 years ago, I called it the water theory of real estate. And I likened it to that idea that water seeks its own level, water seeks its own level, we’ve all heard that old saying, and the idea that if you were to spill or intentionally pour out a glass of water, and so you were to do that on the ground, what would the water do? Well, water guided by gravity seeks the lowest point, water seeks the lowest point, it also disperses, right. It’s more concentrated in the vessel in the glass. But when it hits the ground, it disperses. Sometimes it will disperse in one sort of directed direction for lack of a better word, a directed direction, you know, very poetic I know what a wordsmith and sometimes, but mostly if, depending on the lay of the land, it will disperse in many directions. But ultimately, it will always seek the lowest level. Well, something very interesting is happening in America, and to a lesser degree around the world. And what is that as tech people are leaving fleeing, not leaving fleeing San Francisco, as financial people are not leaving, but fleeing New York City. And those aren’t just financial people, of course. Well, there’s big contingent of financial people in San Francisco do what are we saying? They’re also advertising people and fashion people in those sorts of things, you know, leaving New York and San Francisco and Los Angeles. I might on the live stream. You know what I really want to do in the live stream. Tell me if you want to do this with me. What I really like to do is sit down with you and watch TV. Not exactly, but I’d like to sit down with you and watch several videos and share ideas that come out of those videos because this is what I spend a lot of time doing to provide you with fantastic information if I must say so myself. I know you’re sick of this blustery hyperbole here. I will stop I promise I will stop. But here’s the thing. Here’s the thing that is happening with the mass migration with The Grapes of Wrath 2020. Of course, a wealth transfer money is fleeing To suburbia to suburban markets around the country, and to a lesser degree around the world. Maybe the only reason it’s fleeing to a lesser degree around the world than it is in America is because, of course, America is very specifically known for suburbia. That’s the American concept. Why is that? Of course, it’s the post World War Two baby boom generation. It’s Levittown. If you haven’t heard of Levittown, look it up on DuckDuckGo. It’s also the automobile, America’s love affair with the automobile. That all made suburbia possible. So we see this wealth transfer, we see this money fleeing to suburbia in America, especially more so than any other country. And then we also see it even moving to rural markets, amazingly, but that’s not as big a deal as the suburban movement. So we have this suburban mass migration that I predicted back in February, I was the only one talking about it back then very early, I was making that prediction that it would happen. And it’s certainly come true. It’s no surprise to anybody now talking about it is becoming frankly, old news. It’s kind of boring. But there’s another thing that’s happening with with that. And what is happening is let’s look back at that water theory, water seeks the lowest point. And as water seats, the lowest point as money goes to less expensive markets, and the wealth transfer happens leaving the expensive, urbanized markets, even expensive. suburban markets like Southern California, where I’m from, and it goes to other places that are just have a much lower cost of living, they are much more landlord friendly, they are much more business friendly. And frankly, they’re just better places to live. And people can really, really get ahead. You know, I noticed that so much myself. When I left Southern California in 2011, nine years ago, and I moved to Arizona, I just couldn’t believe how my standard of living improved and how I was able to create so much more wealth, because number one, when I crossed that state border, when I cross the state line, my state income taxes went down by about 69%. Yes, 13.3% in the Socialist Republic of California, and I believe it was what 4.6% in Arizona don’t quote me on that, but it’s close enough for government work, as they say. So that’s one thing. But also everything else was less expensive in Arizona, compared to California. And now living in a no income tax state of Florida, it’s even better. But guess what else happens as the water seeks the lowest point, and you have this dispersion of wealth and the money is spent in different jurisdictions. And it’s spent in favor of certain governments, meaning, you know, the state of Florida that doesn’t charge any income tax, but various municipalities in Florida benefit from all kinds of sales taxes, gas taxes, that I’m not buying in California anymore, or even in Arizona, for that matter. Right. So that’s true. But guess what else is happening? You know, over a weekend, many, many years ago, they built the evil Berlin Wall, the Soviets built the Berlin Wall to basically imprison the East Germans that were left there, right? In the sprue. on East Germany, but East Berlin. Okay. And so the Berlin wall was built very, very quickly. Why was the Berlin Wall built? Let’s remember our history here. It was built, because there was a brain drain. As people were fleeing communism, many of them understood, it took action and knew that communism would not be the right form of government to live under it would be tyrannical. And of course, it was no surprise there. So there was a brain drain. And they decided to erect the Berlin Wall to force people to stay in and make it impossible for them to leave. And it was an evil, ugly, terrible part of history. Well, many years ago, I predicted that California would build an economic berlin wall. And by golly, that prediction has come through you know, there’s there’s all sorts of different plans for them to do that. I’ve shared some of them with you on the show that the wealth tax and and you know, even even ideas that would go back to whether or not you went to college in California, so if you went to college in California, maybe a couple of decades ago. Maybe three decades ago, even the state of California would try to claw back your money, even though you left the state a long time ago, saying that part of the reason your earning power was as high as it is, is because you went to UC Berkeley or UCLA, or you know, some California School, right? I mean, it’s absolutely insane what they’re trying to do. It’s scary. But what am I getting to forget about that? Forget about the economic berlin wall I predicted over a decade ago. That’s absolutely coming true. Forget about all of that. What about the brain drain? Knowledge is power. As the old saying goes, remember, I’ve talked to before about Alvin Toffler, his great book called power shift, where the three forms of power throughout history, the ability to inflict violence, the ability to manipulate and use capital, and the ability to manipulate and use information. Well, information and knowledge are not exactly the same thing. But they’re closely related. Right? So we’ve got this brain drain, leaving all of these high tax, urban, high priced business, unfriendly landlord and friendly places, high level of government intrusion, etc, etc, people are fleeing those places. And COVID. They were doing it before COVID. But COVID has definitely accelerated the migration. We all know that by now. Not a surprise. But how does this affect as these people scattered all around the country? As they scattered to? You know, Texas, Nevada, Florida, and I’m not just talking about California is I’m talking about New Yorkers, I’m talking about people from tax a toussis, you know, especially Boston, right? So there’s, they’re scattering from all these places, and they are moving to the desirable places. Well, as they’re doing this, what happens to the population there, the population becomes sprinkled with high earning power, highly educated, highly ambitious people are now sprinkled in amongst the people that were already there. And what does this do? Well, they spend their money into these new jurisdictions, they spread their knowledge into these new jurisdictions. So if we look as it is, or was the a year ago, and before that, New York had a monopoly on all of the financial brainpower, now, Charlotte, North Carolina, had a decent amount of that San Francisco had a decent amount of it to, well, Charlottesville, getting more of it, right, because that’s a banking center. It’s the number two banking capital of America. And so we see that this knowledge is spreading. And I say that is a very democratic thing, it is a very wonderful thing. Because knowledge will not be the sole province of these few places anymore, it will spread just like Gutenberg invented the printing press. It allowed knowledge to spread the fact that you could print things and distribute them. And people had a much greater interest in learning to read and becoming literate after Gutenberg invented the printing press. Right? So very, very powerful stuff. And we are now seeing this migration of not only capital, this wealth transfer, but we’re also seeing the migration of knowledge. And that is going to lift up other people in these other places that these very highly educated knowledge workers are moving to now it’s not that those places didn’t already have a decent amount of people like that. Of course they did. But there’s more of them moving in there. And they will be their neighbors, they will be having dinner together, they will be doing, you know, things together, they will form new friendships. And this will just increase the power of humanity. It’s a great thing. It’s very democratic. Instead of all these people being clustered in these small small areas, like Silicon Valley, or New York City or Manhattan, New York, whatever, right? They’re now spreading around, and the knowledge and the wealth is spreading with them. So there you go. You don’t have to have a redistribution of wealth through Biden, Harris communism, okay, which sadly might happen. But so you’re having it here happen naturally with the migration as people are fleeing these, these oppressive areas. I think we’re going to see a lot more effective this and I think it’s very early. This is just something I’m talking about. Now, note that I’m talking about it now. And I think people will be talking about it in the months and years to come more and more So, mark my words, it’s happening, folks. And it’s a great thing.
Okay, so today our guest, we are having Charles go yet a returning guest to the show, we had the pleasure of having him speak at our Phoenix venture Alliance mastermind years ago, he came along with Ken McElroy, and spoke to us in person in our small group setting and he was just awesome. He said, He’s like a financial historian. And he is talking about his latest book, you know, about gold and the gold standard and gold as a measuring stick. And again, as you all know, I’m not a gold bug. However, I do think gold is a good litmus test. It’s a good measuring stick. And so let’s hear from Charles go yet. Right now.
It’s my pleasure to welcome Charles goy yet back to the show. He is the author of the new book, The Last Gold Rush ever. seven reasons for the runaway gold market and how you can profit from it. He is a a it I call you an economic historian. Is that a fair name? Charles, welcome.
Charles Goyette 16:15
Well, it suits me I’m pleased to be called that doesn’t hurt my feelings.
Jason Hartman 16:19
Good stuff. Well, we are living in really just amazing times right now. I mean, just amazing times the world feels like is falling apart. You know, I thought of something today, I was thinking instead of social distancing, maybe we should have socialist distancing.
Charles Goyette 16:37
Be nice. And maybe we can do more than six feet.
Jason Hartman 16:41
Exactly, exactly like 6000 feet would be 6000 miles would be better. But yeah, so just give us your overall take of the world’s day. You know, the last time I saw you was maybe three, maybe even four years ago, you spoke at one of our events in Phoenix. For my mastermind group, we really thank you for coming out. Everybody really enjoyed hearing from you. And, and you’ve been on the show before, but not for a while. And a lot has certainly changed.
Charles Goyette 17:07
It certainly has changed. And the you know, I wrote a book in 2008, or nine called the dollar meltdown. And I ran through a whole lot of monetary and economic precedents and stuff. And I sit down the recommendations in this book are only good for this year, maybe next year and the year after, right. All of the things that I’ve described in here, all of these things are precedents and economic lessons that I’d like you to learn and you can call upon them when you need them at some future date down the road. And that was actually turned out to be a very good call Jason because the the calls that I made in 2008 were for gold to go up and silver to go up. And boy, did they ever for the next three years. So it was right on the money. But the important thing was that people were advised to take advantage of, of the book to learn the lessons of economic history in case they repeat. Well, here they are now and all the things that I wander through back then if it’s time now to call on them and look at them. Because this is it sounds it sounds kind of crazy. But in many ways, this is an endgame. And so the name of this book, The Last Gold Rush ever. It’s not about prospecting. It’s not about mining, but it is about the last gold rush out of the US dollar as it’s presently configured. And, you know, the, we’ve had in the last less than 100 years, we’ve had three versions of the US dollar, we had the gold dollar until the 1930s, in which anybody could take a $20 gold piece to the bank and get a $20 bill or more likely a $20 bill for a $20 gold piece. But it was the gold dollar the dollar was as they said good as gold. And the paper money was only a warehouse receipt for the gold that was held at the Treasury at the bank, it could be called upon any time. After that we had the Gold Exchange dollar. And it didn’t do any good to be an American want to exchange your dollars for gold because it was illegal for you to own. But if you were a foreigner, if you were the Bank of England or a foreign institution, you could line up and exchange your dollars, which you had been promised by President Nixon would always be redeemable in gold. And that promise was broken. You know what it was like? It was like, our country was like a check tighter. Our country was like somebody writing bad checks on an account that they knew they didn’t have enough deposits.
Jason Hartman 19:29
People won’t even understand that metaphor because they’re too young. But check kiting is this idea that someone would write, you know, back in the old days when checks used to take a while to clear, you can sort of live this fake life. Now people do it on credit rather than checks, right? They
Charles Goyette 19:45
run out they run, they run a charge on their MasterCard to pay their visa and then the rest of the paper
Jason Hartman 19:49
and that’s essentially the idea. So check kiting, you’d write a check that didn’t have any money behind it. And before that, check cash. Maybe you’ve got a seven day float, you’d write it Another check from another account to back up that check. And it was just so what you’re saying is that the government is doing this or end or the Federal Reserve is doing it right? Well,
Charles Goyette 20:10
the US government was quite clearly doing that. And we were even a little bit arrogant about it. JOHN Connally was the Treasury Secretary back in that day. And he said to the rest of the world, the central bankers of the governments of the world, well, the dollar is our currency, but it’s your problem, party, Har Har. And we can get away with that, because, you know, we’re the global hedge fund at the time. And we, you know, we had the dollar reserve currency of the world at the time, and so on. But at any event, we were, we were frankly, busted for issuing more checks than we had money to cover with more paper claims for Bolden, we had gold. And so Nixon broke the last tie of the dollar to gold in 1971. And since then, we’re on the third dollar standard, which is just the plain dollar standard. There’s no pretense that it’s backed by anything. There’s no statutory regulation that controls how many are issued, and so on. And so, you know, other countries have done worse. I mean, Brazil went through the 90s, I think they went through five or six currencies. But in the last 80 years or so, we are on basically the third currency, all of them in succession failed, and this one is breaking down.
Jason Hartman 21:16
Okay, so Charles, look at the thing I love about talking to you is that you’re a historian, and history provides context. And so, you know, didn’t people say this in 1975? Didn’t they even say it back in? 1933? You know, that was a big deal in 1933. Of course, when, you know, they’ve had the confiscation, you know, didn’t they always say these kinds of things that, Oh, this is the end game? I mean, look, you know, I look at just the past 20 years, I mean, Peter Schiff, has been predicting the end of the world for 20 years, right. Howard ruff was predicting it in the 70s, the 80s, the 90s, the 2000s. And it never happened, right? You know, the thing that just, I think is hard to comprehend when we’re in it, is that, can’t they just keep kicking this can down the road indefinitely.
Charles Goyette 22:10
Jason, this is why I like speaking with you, because you gave me such a softball. I’m so grateful for
Jason Hartman 22:17
the important question. Listen, I’ll tell you something. You are not Joe Biden in a presidential debate. So I’m not giving you a softball.
Charles Goyette 22:27
Listen, it is true that look, there had been gold bull markets in the past that there was one in the United States that topped out. But the gold price had been suppressed or controlled by the government for many years. So there was a gold bull market and when they took off the lid took the lid off the pressure cooker in Baldwin, what up the bowl went in a huge bull market in 1980 topped out 1980 there was another gold bull market that topped out in 2011, made kind of a double top the next year. All of these are what we call secular gold markets. And all bull markets and gold are driven by two things. They’re driven by, by like national debt, irresponsible domestic economic policies of indebtedness, and by central bank or currency, issuing authority, irresponsibility, so by, let’s say, by money printing, derivative by debt, and money printing. And all of these episodes here and overseas have been driven by things like that what’s going on in Venezuela, the destruction of the currency, they’re of course the same thing. Debt money, spending money, they don’t have money printing, that’s not backed by anything. All of these are secular bull markets. But there’s something quite quite different about this one, which is why we call it the last bull bull market ever. This is a unique that this is a crossroad of history. And gold always shows up in the crossroads of history. So we’re at a crossroads of history. And by that I mean everything economic happens at once. So best example I could give for example, is a when an arson investigator comes to see what’s the problem? Why did the house or the building burned down? It looks for the natural fuel, it looks for the fiberboard or it looks for the wood framing and so on that allowed the structure to burn. But he also looks for the accelerants that were used to spread the fire and the arsons diabolical plan. So in this case, we have all of the infrastructure that all bull markets always have, but we have them in in a monstrous quantity of debt at a money credit, unprecedented.
Jason Hartman 24:31
Monster monstrous before Of course,
Charles Goyette 24:33
of course, and the relative relatively speaking was we can put some numbers on this later and show you that this is far beyond far beyond
Jason Hartman 24:42
what I completely agree in dollar terms. We astronomical we are we are dealing with numbers we never thought we’d see. Right? Absolutely. But they thought that when the numbers were so much lower, they seemed really high. I mean, you look at old speeches like you know With Reagan, for example, right? And he’s talking about the deficit, and he’s talking like such small numbers, he doesn’t even talk in trillions.
Charles Goyette 25:08
Well give you a better idea than that. We had the first trillion dollar national debt. I don’t mean just the linear deficit of a trillion dollars. But the first trillion dollar national debt was in Reagan’s first term. And you can look at me and see that my hair is, yeah, I guess kind of you know, that I was around back then. And I remember carrying petitions, yep. that a lot of us were carrying them. No, you know, they’re no trillion dollar national debt. Right. Well, it broke a trillion dollars when Reagan was president. So we had gone through, you know, 200 plus years of American history. We fought two world wars. We’ve opened the West. You know, we we fought in Vietnam, and, and we bought Alaska, we bought the Louisiana Purchase. And
Jason Hartman 25:52
you know what we did this time, Charles. We paid to fund the welfare state. Yes. Aren’t you proud of us?
Charles Goyette 25:59
Yes. Was so what do we have to show for it? Now?
Jason Hartman 26:03
We have a bunch of dependent people that vote for Democrats. That’s what we have.
Charles Goyette 26:07
So this year, we ran the in the fiscal year that just ended in October, we ran not the national debt, the gross national debt hit a trillion when Reagan was president. Now just the one year deficit, that adds up with all the debts that have gone before the one year deficit was over $3 trillion, right? Just they just finished the month of October counting the first year, the first month of new fiscal year, I think was about came in about unparallelled, about just under $300 billion for the month. So these numbers are astronomical. But what I’m what I think it’s important for people to understand is that this is a malevolent convergence of a whole lot of things happen at once. So there are all these additional accelerants in addition to the debt, and the wholesale money printing we have. Well, you will certainly know about this. And you’ve alluded to it a couple of times, we have a rampant kind of a runaway, our move towards socialism in this country, right. And that undermines the productive capacity of the country that takes capital from productive uses. And this is what you alluded to, you know, we, we bought the Louisiana Purchase, and we bought Alaska and so on with state spending back in that day, but today, we spent it all on consumption on the welfare state. So but we have a newfound huge popularity of socialism that we have not had before in this country, coming in at the exact wrong time when we can least least afford it. So that’s one of the accelerants we talked about in the last gold bull market ever. And there are a number of others I’m watching the secretary of the state of state Mike Pompeo run around the country and he’s trying to get cooperation on national government initiatives of you know, restrictions, trade restrictions and embargoes and this and the other, and he’s meeting with an an unforeseen, unexpected unexperienced by Americans in the in modern times resistance from all over the world. And that’s one of the other accelerants that we’re facing is a breakdown of America’s global hegemony, America’s global economic might as powered our diplomatic agility. And as our economic might subsides, our, our ability to control events of the world is subsiding well,
Charles Goyette 28:26
so we have
Jason Hartman 28:28
to, for our economic might to subside. That means it’s essentially has to be replaced with some other economic might write,
Charles Goyette 28:38
right or we can stay the same and others can grow.
Jason Hartman 28:41
Now, I assume you’re gonna say China is the one to take. Right? Okay.
Charles Goyette 28:46
Good example.
Jason Hartman 28:47
But, you know, I just don’t think so. Because I think I think China is 10, maybe 15 years away from a giant demographic problem. I think they have they are on the verge of major civil unrest, as are we? Well, fair enough, but their civil unrest has a completely different flavor than ours. Right. I mean, look, I agree with you. You’re absolutely right about that. You know, I think we’re going to see a real secession movement in the country. I think it probably kind of needs to happen. I hate to say that, but I just don’t see how these two sides of the political aisle can coexist. I really don’t.
Charles Goyette 29:26
Yeah, I’m i and i agree with you about that. But back to China. I actually agree with your point there. They have the leadership of Communist Party has a very tricky problem. They have to keep those people employed that they have urbanized over the last couple of generations. And the myth This is what keeps them up at night. You know, what happens if there is a trade shut down? What happens if, if if commerce with China stops and it actually puts a whole new light if you look at it, it puts a whole new light on the the American geopolitical or global military Empire You know, the pretext for the current level of defense spending in this country since the Obama pivot as well, we have to keep the sea lanes open in China as a number one military objective now, right China, China, who wants to close the sea lanes, China can’t afford it with their, you know, ever since dung shopping, it has been in necessity that they would grow that they would need more goods coming and going from China, there’s no other way. I mean, you could have could have kept Mao and kept the heel of the boot of the state on the face of a billion people all these years, or with the freeing of their economy, it’s a, it’s inevitable that trade and commerce would start flowing through the South China Sea. But 75% of the shipping there, Jason comes and goes to China. So it is in their interest to keep the trade lanes open, and more so even than ours. And if the trade lanes were shot, that’s when the civil unrest that you alluded to, really becomes frightening for the leadership there.
Jason Hartman 30:58
Yeah, no, no question about it. So I I don’t I’m not a china bull. I mean, you know, I was, but I just don’t think China has anywhere near as good a future is some think it does. I just think that freer society’s going to win out. I mean, look at what, what happened. I think COVID rescued them from the Hong Kong problem. You know, I mean, it was like, don’t wear a mask. Oh, now you got to wear a mask. That was ironic, right? I mean, I don’t mean to make light of that, because it’s terrible situation, obviously. But I was in Hong Kong right before that unrest broke out. I mean, like the week before, you know, had I stayed a week longer. I would have been in the thick of that. So it’s really crazy what’s going on there. But I mean, what do we do with all this, Charles? That I’m assuming you’re saying the future is inflationary? Right.
Charles Goyette 31:48
Well, I’m certainly saying that the, the future is a different role for the dollar. And it’s no longer the dollar reserve. In fact, I’m glad we’re speaking about China that, you know, only only a couple of years ago, China was the largest creditor of the United States Treasury, the largest foreign creditor, and it held about about $1.3 trillion worth of us debt. So in a time of growing indebtedness, we need all the creditors we can get. But this has changed now, and they are D dollar rising, as is the rest of the world. It has enormous implications for the American people in the American economy. But China has gone from the number one creditor of the United States of coordinations to number two now, and they are down from $1.3 trillion. They’re down to $1 trillion. And the trend is, as they say, Your friend is the trend is very, very self evident. Russia has done the same thing, Russia at probably under $200 billion as the United States creditor, you know, in these days, we need every $200 billion creditor we can get. But Russia had about $200 trillion or two $200 billion of United States Treasury instruments that have failed. Now, if you look at the Treasury reports, Jason, they put Russia down in the Asterix down with you know, like, Syria, and Iraq and Vietnam. You know, I mean, they basically, they basically have nothing, and what have they done with that money? They moved it, they moved their central bank reserves to gold, as has China.
Jason Hartman 33:18
So it wouldn’t be fair to call you a gold bug, wouldn’t it?
Charles Goyette 33:22
I suppose I suppose Yeah. It doesn’t hurt my feelings.
Jason Hartman 33:26
Well, what about and neither does it in an economic historian. So And what about what about cryptocurrency and all of this? What about Bitcoin?
Charles Goyette 33:38
So I think it’s a I think it’s a wonderful thing that people are experimenting with Bitcoin and developing alternative currencies, you know, the great economist hyack said, you know, let all kinds of currencies evolve, get rid of the legal tender laws and let people settle on the ones that they like. So I think it’s a good thing. And I’d like to know, exactly how things will pan out over the long term with Bitcoin and some of the other kryptos and I think we should find out experiment in with your money rather than mine. So but I mean, I’d like to know and I, you know, I wish them well, you know, that the Fed has on the drawing board their own kind of bitcoin wallet.
Jason Hartman 34:14
Federal Reserve is the one that’s going to change, you know, sure. Yeah. it’ll, it’ll win by force.
Charles Goyette 34:22
Of course, which is, which is how you know, it’s kind of the end game nobody has to use force or pass legal tender laws when the currency is of self evident value. You know, it’s just like a you know, a run on the bank. No, nobody’s ever staged a run on the bank to exchange their gold for dollars. Give me my dollars you’ve got Give me my dollars. It’s always been the other way around. And it’s the same thing with the legal tender laws, you know, if they if they have to use the force of law to keep you using their currency in the face of alternatives, then there’s probably reason to be suspecting.
Jason Hartman 34:53
Absolutely. You know, there. There’s a great name Charles that I remember, I posted on Facebook A few years ago, and it was was a picture of riot police, with their gear and their shields and their batons, and all that stuff. And at the top, it said, socialism, ideas so good, we have to force you to accept them.
Charles Goyette 35:14
Absolutely right. And as Margaret Thatcher said, the problem with socialism is pretty soon you run out of other people’s money.
Jason Hartman 35:20
Yeah, absolutely. You sure do. So, um, your advice would be buy gold, right? Yeah, my
Charles Goyette 35:27
advice is, is? Absolutely, my advice is that the present currency system cannot last. And so people that see it in breakdown, and they see the convergence of these currency wars, in which countries race to the bottom to destroy the purchasing power of the currency, they see the war on cash, which should be a whole conversation by itself, they see all these things going on. These are symptoms of a growing failure of the currency. And so rather than waiting for the stampede, when people line up around the block, I suggest that people take steps to protect themselves now and it’s, yeah, it’s not, you know, I’m not here to tell you how high gold will go next year, or, or next month. But I am here to tell you quite clearly that the signs are quite evident, that the current monetary system is in a state of breakdown.
Jason Hartman 36:19
Yeah, so is gold a currency and an insurance policy? Or is it an investment there is
Charles Goyette 36:27
it depends on the on the times. And it depends on how you buy it, you know, people that buy gold shares, which have to use in a place in some portfolios, people buy ETFs have a use in a place, and some portfolios are trading that as an investment, but it is not a currency here is the sole virtue. Here’s the reason that in in a time of economic transition, and the time of a breakdown, Jason here is the sole reason that gold stands separate. And apart from everything else, it is the only monetary asset in the world. That is not somebody else’s liability. It doesn’t matter who signed the certificate, it doesn’t matter. You know, if they are audited by honest auditors are decided, none of those things matter whose face whose picture is on it, none of those things matter. It doesn’t depend on anybody’s performance. It doesn’t depend on how well the mining the mining company is administered, or whether somebody is embezzling funds, it doesn’t depend on whether somebody has re hypothecated or hypothecated, the golden ETF to someplace else and the titles not clear, all of those things are irrelevant, because in the period of crisis, you’re holding an asset with gold and silver that is a monetary asset that is not dependent on the promises of counterparties, or risks and failures by
Jason Hartman 37:42
other parties. Okay, so it does depend, though, on the two economic drivers as I see them scarcity and utility, right. And so you’ve got to have people, I mean, since it’s not really an industrial metal, very much like silver or other metals certainly are even more. So. You know, it’s a monetary metal, right? So people have to keep believing that it’s the thing, and they certainly have for 5000 years. So it’s got a good history behind. But also it has to depend on scarcity. And you know, this is not as far fetched as may some I think, but I mean, you know, we’re pretty close Charles to mining asteroids and discovering all sorts of abundance. And if you even look at oil as an example, right here on Earth, you know, in the in the doomsday 70s and, you know, the the conservation mentality of Jimmy Carter and, you know, wear a sweater don’t, you know, don’t make the house warm, because we wore Yeah, yeah. And, and you know, that whole conversation about peak oil, right, you know, for sure, we thought the world was gonna run out of it. And then we discovered a new way to access it. And that was fracking. And now it’s totally abundant, and maybe being produced AB optically. Nobody knows for sure about that. But certainly, there’s a lot more of it than we ever thought, could that happen with gold? I mean, maybe gold isn’t as scarce as we think, right?
Charles Goyette 39:07
Well, it’s very scarce. And despite the fact that most of the gold, perhaps 95 97% of the gold that’s been mined in history is still in human hands. Think about that 1000s of years of gold production, and it’s still in human hands. And yet the value of it keeps going up year after year. But you’re right, you know, asteroids may come people may discover new ways of reclaiming gold from the oceans and stuff. But these are very expensive processes that take a long time to develop. But the potential demand for gold in the face of a some sort of a re monetization is just it’s simply off the charts. And when we have enough gold out for everybody to have an ounce, that’s not very
Jason Hartman 39:45
much. But to your point A moment ago, you said the value of it keeps going up. And I think those are sort of critical words right there. I think those are very important words. So I don’t want to compare it to dollars, because most economists would they’d say your dollars are constant dollars, you know, an inflation adjusted dollars, has the price of gold gone up? Yes, it has. Because the dollar is depreciating. Maybe it’s not that gold is appreciating. And the funny example is, you know, 5000 years ago, you could buy a toga and a pair of sandals with an ounce of gold. Now you can buy a man suit and a pair of shoes. So I don’t know, is gold actually going up in value? Or is it just holding its own was measuring stick?
Charles Goyette 40:31
Yeah, it It holds its own and the currencies that it’s measured against rise and fall, because well, based on their domestic economic fundamentals, but notice that the price of gold has hit New, all time highs this year, in not just not just in the US dollar, but in all the currencies of the world. And I don’t say just the major currencies, but all the currencies of the world. It’s hit New all time highs. So there is a burgeoning demand for it. I saw today that the Russian sovereign wealth fund has got legislation pending, so that they can now start owning gold. You know, this is the fund that they sell their oil and they provide for their national pensions with and so on. They and the movement of central banks into gold with money, they used to hold a dot with reserves they used to hold in, in dollars. There is a strange new respect for gold going on all over the world, old hidebound institutions that never even looked at it. You know, Warren Buffett has made himself kind of notorious for his disdain for gold over the years. But now, you know, he’s been this year he has sold bank shares to move money into gold chairs. So, you know, there and of course, this is to be expected, because the handwriting is on the wall. And it’s not just we that see that something is wrong. But you know, the Treasury has a lot of debt, that they’ve got a fun, they’ve got a lot of money, they the demands for resources that the Biden administration will make on the American people are enormous compared to the already enormous demands today, hopefully,
Jason Hartman 42:05
from somewhere else demands, but the likelihood is, yeah, so even both both sides of the aisle are spenders. I mean, let’s just say,
Charles Goyette 42:13
of course, what
Jason Hartman 42:13
it is. They’re both everybody’s a Keynesian nowadays. Except Ron Paul. So, um, I’d like to pose with two areas of interest for you. One is the New World Order. And the other is this more recent talk, maybe from the New World Order? I think that’d be fair to say about the, the, and I’m going to quote the EU, this is not a conspiracy theory. They say it okay. You know, it’s, it’s just listen to their words, not ours, the great reset. So what about the New World Order in the great reset? Let’s wrap it up with some thoughts on that. I was thinking, yeah,
Charles Goyette 42:49
well, the New World Order is, is certainly coming. It’s not in a defined form. There are many people that have defined ideas that they would like it. But in the meantime, the old world order is breaking down. And it’s breaking down really fast. And there are a lot of people that, you know, would like to rush from Davos to the legislative halls of the world and get implemented their version of the of the New World Order, the real New World Order that will manifest after I don’t know how much heartbreak and I don’t know whether it is born in with a with the old one ended with a whimper or with a bang. But the New World Order is certainly going to be highly decentralized. That is the mega trend of the times the state always always fights decentralization, always wants to consolidate power and resources. But the real mega trend, and you could see this going on in, in our subtle social lives in social circles is decentralization. So we’re in for a conflict, you know, in which the organic order of things, which is, you know, people don’t want their schools run by institutions have 1000s of miles away. We need to have a decentralization of the monetary system, the health care system, the education system, and many, many other things that these things will manifest. It’s just, you know, the old world order is coming apart at the seams. So it’s a question only, what will the state do? How far is it willing to exert its authority to insist on its version of a new reset? It’s always bet this is the difference between socialism and communism. The question is socialism, all it has friendly face. It doesn’t you know, it’s not a Boot Hill like communism is? Well, the question is, if you have a central plan, you have a central economic plan, what’s the good of having a central economic plan if you don’t intend to enforce it? And of course, the central economic plan runs into conflict with people’s individual plans. So if you’re a serious statist, you have to enforce it and ultimately, it comes down to the point of, you know, enforcing it with force of force of arms. So that’s these are the choices that are ahead of us and I, I actually fear that they will end very, very poorly when The state begins to lose its power when its power base begins to decay. It thinks that the problem is the lack of military resources. And this is as old as the fall of Rome and Gibbons talks about this, you know, the overstretch of the Empire is a court is a question of the Empire, saying, well, we’re too weak or nobody’s following, still just doing what we say, We need more military resources, and they get those resources at the expense of the domestic economy. Of course, the resilience of which was the source of their might to begin with, so they drain the domestic economy at the expense of the Empire. And that’s basically where we’re headed, and the currency and the Empire are coextensive one with another the dollar and the American global military or Empire, coextensive, and they rose together, and they will fall together.
Jason Hartman 45:48
And what all of this really relates to is what we’ve been talking about on the show, which is they can tell you in effect, and the just a massive hollowing out of the middle class, it’s it’s been happening for a long time, it’s only going to be an accelerant, as you put in all of this will just be an accelerant. You know, the welfare state will increase in size, because you got to keep the poor from rising up, right. That’s what the government’s gonna do. They’re gonna placate and then the elites who are closest to the money as Richard cantillon postulated, will get the most of the benefit they
Charles Goyette 46:24
get at first, they get the first use
Jason Hartman 46:25
of it before it’s depreciated. Absolutely, you know, everybody else is downstream from them. So yeah, that’s certainly true. Charles, give out your website.
Charles Goyette 46:35
So it’s Charles gray.com, Charles and the boy yet goi e tt e.com. And you can see the book there are a couple of videos about the book and a couple of other things of interest. I believe that david stockman, the budget director under the Reagan administration, I believe his his preface to this book is posted there and it’s very interesting. He says that people that read this book, people who fail to read this book will be surprised at just how hot and how high this conflagration this, this Bonfire of calamities is going to burn with the Korean the currency situation, the currency.
Jason Hartman 47:11
Fascinating stuff, Charles glad. Thanks so much for joining us. Appreciate it.
Charles Goyette 47:15
It’s always great to see you Jason. Thank you.
Jason Hartman 47:22
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