Triple-A Ratings Are So Yesterday

A company’s credit rating is a lot like a person’s credit score. The better the score, the more easily—and cheaply—you can borrow money through the debt markets. The highest score a company can get is AAA. The lowest is D. And for many years, companies strove to get that AAA rating. It wasn’t just the key to low borrowing rates, it was also a sign of solidity and reliability. And it came with serious bragging rights.

Back in the 80s, there were dozens of AAA-rated companies. Today, though, there are just two. Microsoft and Johnson & Johnson. That’s it. Most other companies appear to have given up aiming for that AAA gold standard. They don’t see the point. In fact, many companies seem quite happy to get a BBB-, which is the lowest rating that many investment companies will tolerate, and just one notch above a ‘high-yield’ or ‘junk’ rating.

How can this be? How is it that corporations have gotten okay with letting themselves go like this? We talk with Moody’s Analytics Chief Capital Markets Economist John Lonski and Bloomberg Credit Reporter Claire Boston about what’s changed in the bond market and why companies are content to get a passing grade.

Donald Trump and Harvey Weinstein

The Dire Dangers of Narcissism

Though I’m professionally distant from today’s media luminaries, I have a particular personal interest in the current narcissistic spectacle du jour: I went to college and was friends with Harvey Weinstein nearly a half a century ago.

With an admixture of feelings, I watch the scandal unfold. I’m horrified and angry at what Weinstein is charged with perpetrating. I’m confused and saddened by my former friend’s behavior. Yet, I’m not surprised, given what I remember about Harvey when we were students. That’s not to say I could have predicted this. I don’t identify with interviewees solicited by journalists to tell what they knew of ignominious scoundrels before they committed their heinous acts. Harvey Weinstein—from first impression of him being grandiose, sycophantic, and magnanimously generous to the progression of his unstable and rampant ambitionwas intense, needy, insecure, ingratiating, and over-the-top in his endeavors.

I’m not invested in justifying or scourging Harvey. He’ll get whatever the consequences of his actions bring—spiritually and legally. I feel sorry for him, but ever more sorry for, and indignant about, the victims he is accused of abusing, exploiting, bullying, and oppressing. Such injustice must be vindicated—but that is not up to me. As a psychologist, my goal is to unravel and shed light upon the inner forces that develop into disastrous behavior. Since I consorted with Harvey and knew him well decades ago, I want to lay bare the seminal roots of an accused tyrant before he became one.

As a psychologist, I have something to contribute by explaining the wily dangers of narcissism, thus allowing potential victims to be informed and better protected. As an American citizen, I am alarmed and wary about the course and future of our country, our people and our principles. As a father, husband, and person with strengths and weaknesses who is desirous of healthy relationships, I, too, am vulnerable. Narcissism is an insidious monster, born of a needy and unstable ego that lurks for years, nursing its perceived wounds, until it explodes in aggressive and blind perpetrations. A healthy self-image must be nurtured. It can be achieved by hard work that includes the basis for self-respect and the practice of respect for others. Though the development of narcissism is neither predictable nor clearly delineated, certain factors may contribute to a self-aggrandizing ego and overbearing sense of entitlement:

  • a “silver-spoon” upbringing, where material things and excessively indulgent opportunities became integral elements in the family culture;
  • exposure to a series of traumas and humiliations;
  • use of embarrassment to modify childhood misbehavior;
  • employing self-flagellation to cope with insecurity; or simply
  • relying on an escapist fantasy and the transformative illusion of becoming a legend and hero in one’s mirror.

Though we may recoil from the exaggerated hubris of the narcissist, we should also be respectful and thankful for not traveling along such an isolating and destructive path. As my mother often said: “There, but for the grace of God, go I.” To live a life of worthiness and honor, one must embrace gratitude and humility.

What Happened to You, Harvey Weinstein?
Do you remember me, Harvey? I know you’ve got a lot on your mind these days; but I’ll bet that if you heard my name, you’d say, “Mark… how the hell are you doing?” We go back a long way, Harvey, to some wild days at the University of Buffalo.

Remember the crowd? Janis Siegel (affectionately called Pumpkin), who went on to acclaim as a singer with Manhattan Transfer. And the creative and iconic Jay Beckenstein, jazz saxophonist with Spyrogyra.

Remember those all-nighters, the 4:00 AM greasy burgers at Your Host Restaurant? The anguished, drugged-out rants and discussions about the universe, who we were, and where we were going?

We grew up and went out in the world to different places. You were amazing, Harvey: intense, sycophantic, driven, disturbed, and needy. I identified with you—Jewish kids from New York, arrived in a blue collar city, ready to take over and show how much we knew and how things should be done.

You floundered, and then soared. It wasn’t long before you traded academics for an entrepreneurial path, on your way to becoming a juggernaut. You founded Harvey & Corky Productions, bringing big-name musical talent to downtown Buffalo. You soon rubbed shoulders with the top names and icons of our generation. It must have been intoxicating, far beyond the drugs that most used to reach for peace and imagined self-importance.

Throughout the years, I watched your movies and cheered you on. There goes Harvey Weinstein—I knew him in college; we were friends. I envied your success. From my intimate knowledge of your personality, I suspected that you were not happy or fulfilled. How could you be, never filling the immense void within you with something other than riches and accolades? Not to diminish your sweeping achievements. But you were so needy and insecure. How could anything the world had to offer be enough?

I wrote to you fifteen years ago, hoping to reconnect. But I never got a response.

Apparently, you tried to fill your deep inner void with surreptitious trysts, using your money and influence to sway and dominate young women—impressionable and aspiring beauties you used for your lustful and egotistical purposes. You used your money, power, and influence to lord it over people, to take advantage of them, and to coerce their silence. The chickens have come home to roost; the truth will not be hidden; you are exposed and in trouble.

It’s not for me to judge you Harvey. I just want to tell you something about women and men and power and accountability.

Females are not immune from deceit, hypocrisy, and the fleshly litany of sins. But females are to be protected and respected. They are “weaker” in some sense, but immensely more powerful than men in many respects. Our society inherently imposes on women mixed messages, psychological traumas, economic discrimination, and often the raw end of many deals. Our culture exalts and worships physical appeal, but quickly disregards and discards worthwhile human beings when their outward beauty fades. Ironically, we exalt and worship physical beauty, and yet we exploit it. The fleeting blooms of pulchritude and stardom leave women vulnerable and with undeserved dismissal or ostracism. Too many men strut their machismo, stricken with envy (and with the fantasy) that a woman can have sex any time she wants (whereas many men have to feel they must lure or seduce). Unfortunately, some men act out of this context to take advantage and force or exploit women. When the playing field becomes overly imbalanced, many women either withdraw into resentful passive aggressiveness—avoiding or manipulating intimacy—or act out with hostile projection—rejecting men or typecasting them as insensitive and only interested in exploitative sex. Though there’s plenty of blame to spread around, men bear the burden—historically, we have been at fault by dominating women and isolating them from full and equal participation in society.

With your overarching success, Harvey, you now have trouble (tsouris, in Yiddish) on a grand scale. My heart aches for you, and I pray for you.

I have some advice for you, Harvey, my dear old friend: it’s time for you to make amends, to acknowledge your wrongdoing, to seek forgiveness, and to make restitution—no holds barred. I know you must now resort to posturing for strategic legal reasons, but you are going to sacrifice a lot of money to pay for your mistakes. You can no longer “buy” people (and certainly not their silence). You will feel alone, and will be alone. You will have to give up the pretenses you have long abused to fill the abyss and mollify the gargantuan ego that hides the empty Harvey Weinstein.

Yet, there is someone valuable, tender, sensitive, worthwhile inside the blustering and offensive Harvey. This is an opportunity to find out who you really are, to change the offensiveness, and to develop into an honorable person.

God has used you, Harvey, and he is not done yet. Through these scandals, he is using you writ large to teach others; and he is bringing you to your knees in the hope that you will stay there and begin to acknowledge and worship him.

Truer riches await you, my friend, if you will only repent and ask for divine forgiveness and guidance. You must also seek forgiveness from the people you hurt, so many of them. It’s time to be open, sincere, and humble. You must unequivocally repent.

Years ago, you founded a big company—Miramax—named after your parents, Max and Miriam Weinstein. What would they think of their son now? I never knew Max or Miriam, but I am sure they always loved you. Why, Harvey, has it been so difficult for you to feel love?

The Harvey Weinstein I knew nearly half a century ago could never relax. He always had to prove something, to get more and show more. You were an intense and difficult person. But you were likable, Harvey, and you didn’t have to try so hard.

Narcissism Exposed

The term narcissism is taken from Greek mythology. Narcissus was the son of the river god Cephissus and nymph Liriope. He was proud, in that he disdained those who loved him. He was drawn to a pool, where he saw his own reflection in the water and fell in love with it (himself), not realizing it was merely an image.

Today, narcissism is a psychiatric diagnosis and considered a mental disorder. It is also often used disparagingly in common parlance and description. Narcissism involves extreme selfishness, with a grandiose view of one’s own talents and a craving for admiration, and has come to characterize a personality type. Narcissists think extremely highly of themselves and are often driven to seek validation of their worthiness and inflated self-opinion by soliciting and even demanding the approval of others. They delude themselves that their boorish machinations and manipulations of others testify to their own self-worth. Though they may be capable of compassion and empathy, narcissists are so preoccupied with their own selfish interests and with validating themselves that they typically ignore or do not consider or recognize others’ needs, even the people closest to them.

Narcissists’ classic “me-first” posture often leads them to resort to aggressive acts that allow them to dominate or “win,” regardless of the costs. They love and need to be the center of attention, often usurping the limelight, dominating conversations, and controlling situations and people to serve their own ends.

It is when they are challenged or confronted with reality that the true pathological character of narcissists flagrantly emerges. Narcissists’ fragile self-image and ego structure do not allow them to acknowledge the egregious nature of their self-importance. Thus, is it is rare for them to apologize or admit wrongdoing. Remorse and repentance for their offensive actions almost never occurs (think Trump).

Thus, narcissists often have a problem with reality-testing; that is, they can only perceive events and circumstances from the same perspective as others when such “reality” supports and buttresses themselves in a positive and flattering light. Unfortunately, this infrequently happens. Instead narcissists twist and distort reality to suit their own views, inevitably causing confusion, alienation, and damage to relationships and the integrity and well-being of others. They constantly use people in devious ways, and invariably deny their motives and the unpleasant effects upon others. Narcissists have confounding and appalling obsession to blame others for what they themselves have done. A psychological term for this is projection. This is denial at its craftiest, and it is infuriating (again, think Trump).

When dealing with and referring to people who thought too highly of themselves, a dear friend of mine use to quip. “I’d like to buy you for what you’re really worth, and sell you for what you think you’re worth.

We can shake our heads in disbelief or disgust at narcissism, and we can mock this condition with humor. However, don’t underestimate the dire danger of narcissism as the disorder affects all those who come into contact with the narcissist. Narcissists cannot have good relationships because they view others as opportunities to validate and gratify themselves. In psychoanalytic terms, they have poorly developed object relations. In plain language, this means that they cannot separate and distinguish between themselves and the legitimate perceptions, opinions, values, desires, and needs of others. What others experience (including hurt or neglect perpetrated by the narcissist) is blocked by the arrogant, center-stage prominence of the narcissist’s own needs.

Dealing With Narcissists

Because narcissists live in a bubble of self-absorption and denial, it’s very hard to break through their manipulations and defenses. Normal people (allowing for differences among individuals) have varying abilities to admit mistakes, acknowledge wrongdoing, apologize with sincerity, recognize their flaws and trespasses along with the negative impact upon others, and modify their behaviors to minimize the negative effects of selfishness. Not so with narcissists, as this is the core of their personality disorder.

It may be helpful to review the following guidelines in dealing with people you suspect of narcissism:

Expect self-centeredness and reality distortion

Because narcissists’ self-absorbed attitudes and responses are often provocative, it’s tempting to react with consternation, indignation, umbrage, and the like. However, if you keep your dismay and outrage to yourself, you’ll be in a better position to question the behaviors with a strategy of setting limits. Instead of expressing your emotional reactions to narcissistic self-centeredness, practice the strategies listed below.

Refrain from demonstrative emotional reactions

Tie responses to facts, evidence, and questions

When faced with narcissists’ bold claims, quietly question the bases for such statements. Or, just ignore them. For example, someone may proudly announce, “These people don’t know how to drive. I happen to be one of the best drivers on the road.” You could say, “ I guess so. But there is the issue of your three moving violations and numerous parking tickets.” Or, you could just let it go, and smirk to yourself.

Sometimes, simply questioning the basis for outrageous statements is enough to slow down the narcissist’s bluster. Remember Trump’s tirades about how he “knows more about Isis than any general in the military,” and his defiant complaint that he is “the victim of the greatest witch hunt in history”? There is no shutting down such an ego. However, one might ask, “Where did you acquire your military knowledge, and why were you not consulted and solicited before you became president?”

Please give us some details about the other witch hunts against which you compare your own alleged persecution.”

And don’t expect an intelligent and coherent response to your questions!

Preface accountability and confrontations with acknowledgment and legitimate praise

Narcissists perceive questions, challenges, and alternate opinions—even facts—as threats to and defamation of their integrity. Therefore, it’s helpful to preface and intersperse your messages of accountability with reasonable and relevant praise toward the person whom you’re trying to get to really listen to you. Even appealing to their putative sense of discernment and justice may get you farther along on your attempts to bring reality into the conversation.

When I deal with pie-in-the sky people who live inside dreams inflated by their own sense of self-worth and entitlement, I find it prudent to ask, “I understand that, given your abilities and track record (?!), you expect this to work out as you’ve favorably planned…, but because you are smart, have you formulated an alternative scenario and plan?”

Set boundaries and repeat if-then consequences as they pertain to the narcissist’s behaviors

Inevitably, narcissists repeatedly step on the toes of others. Their transgressions may be verbal and/or they may take vindictive actions (hello again, Mr. Trump). Their self-aggrandizement can make it hard to keep a straight face; or, their attitude of entitlement may carry implicit threats for noncompliance or resistance. (Harvey Weinstein got away with his egregious behavior in large part due to his political and economic influence, much of which he wielded against much less powerful women. When he ultimately confronted a woman who was formidable and courageous, she pulled the plug, and the dirty slimy water that had accumulated in the bathtub over the decades slurped down the drain. Harvey was left sitting naked and shivering in his own filth.)

Granted, it’s not for individuals to take on the President of the United States. But the collective violations and outrage are propelling Trump to his comeuppance. Kudos to the brave people who have spoken the truth and challenged Trump, even at risk to their own reputations and careers! That takes integrity, confidence, and courage!

And Harvey? My old friend, your bullying and predation have ironically transformed the zeitgeist. Your secret life of lust, aggression, and intimidation now exposed has caused trauma and harm—shame on you! However, the notoriety has caused a groundswell of indignation, objection, and cries for justice. You have become the agent of change, long overdue.

The message is clear: If you abuse or intimidate women, it will come to light and you will pay.

Solicit commitments, promises, and contracts in writing

Remember that, as part of their sense of entitlement, narcissists do not hesitate to change the rules—including their agreements, commitments, promises, and respect for others’ needs—when it suits their purposes. Therefore, it’s wise to make a habit of solidifying commitments and promises in writing, with dates and signatures if possible. Though the self-entitled may scoff and sneer at such requests, pretend you are prone to mistaking the details, since your memory might not be as good as theirs (!) and remind them of the pithy saying, Black and white on paper is a lot clearer than the gray matter of the brain.

In other words, play dumb, like a fox. The narcissist may pity you and indulge you.

At the very least, keep your own meticulous records with details of words, actions, and dates. E-mails and texts establish a continual, accessible, and practical audit trail, useful for holding the narcissist accountable, especially when deception and conflict arise.

Be prepared for breaches of trust, intimacy, and fidelity

Precautions and attentiveness notwithstanding, you cannot change the basic flawed character of the narcissist. That’s not to say that people don’t change. Life experience, traumas, pain, and consequences are all great teachers. They even teach to the seemingly robust and impregnable bravado of narcissists (and, at best, it takes awhile). In his own way and with his own timing, God chips away at the lives and consciences of the foolish and hurtful. At his own discretion, he causes miracles to happen.

But the very nature of narcissism attacks trust, empathy, and consideration. Don’t be surprised when the narcissist (repeatedly) violates boundaries, flaunts rules, and sabotages trust, intimacy, and even your own faith. Remain loving, but be cautious and be prepared. Your sensitivity and good intentions are no match for the power of narcissism. Engaging in an argument or a major adversarial battle with a narcissist can be akin to stepping into the ring with a mixed martial arts fighter. No holds are bared. Be prepared for the unexpected. Be on guard. Protect yourself at all times. Expect hyperbole, manipulated facts, concocted falsehoods, inconsistencies, and outrageous lies. It’s all part of the package.

Narcissism’s Dire Consequences

Donald Trump and Harvey Weinstein are but two notorious narcissistic icons—caricatures writ large in a field of opportunism. Their transgressions leave us aghast, wondering how such egregious behavior could have escalated and continued.

Surely, someone like Weinstein, if indicted and convicted of a crime or crimes in a court of law, must be thwarted and punished. Trump is a much more complex matter involving political and constitutional issues that are still in the process of unfolding. However, the important take-home message is that there are many like them—young, old, male, female, prominent, less significant—who foist their attitudes and perpetrations upon the unsuspecting and vulnerable, the psychologically and experientially less sophisticated, and those with fewer defenses and resources.

Narcissists may be overtly offensive, or they may be furtive and wily—sheep in wolves’ clothing. In a culture that has inveterately promoted self-centeredness and a “me-first” value system, narcissists may seem to embody the cultural virtues, to blend in and prevail over the competition. But you will recognize them by their intransigence and lack of compassion for the basic welfare and psychological well-being of others. As legends in their own mirrors (or pools, as with the Greek Narcissus), they deem themselves the only ones who matter.

As a society, we should focus attention on identifying, dissuading, and modifying the development of narcissistic character. Respect for women—pervasive societal, legal, accommodating respect—is surely a good place to start. We are beginning to painfully learn those lessons.

But the battle against misogyny is not enough. Parents must teach their children that the world does not “owe” them. The government should provide more than minimal education and health care—service, schooling, and training that focuses on character development and resources for the ravages of character failure, including disorders of emotional bonding, anxiety, depression, trauma, and the depredations of addiction.

We need to return to God, individually and collectively. Each of us determines our own personal relationship with or abandonment of our Creator. Religion should not be forced. But spiritual living should be foundational and institutionally encouraged. The development of the soul and its conscience and compassion is incompatible with the “me-first” ethos that culturally reinforces narcissism.

When tragedy strikes, we become voracious Monday morning quarterbacks. We scrutinize the history of assassins and predators, looking for clues that should have exposed them earlier. However, social autopsies on misfits will not relieve us of the larger problem, nor will those efforts alone avert the perverse development of unhealthy, megalomaniac egos.

We must become a society, through and through, that values humility and teaches people, rank and file, to put others first. Against such a social norm, the Trumps and Weinsteins will identify themselves early as faulty people who need discipline, correction, and guidance to develop true and healthy self-love.

Narcissism may never be eliminated, for we are a prideful and sinful species. With regard to selfish insensitivity, some are given to robust excess, even to the point of outright cruelty. Recoil as we might from Trump and Weinstein, we should learn that we need to expose them earlier in order to prevent the devastating potential of narcissism from exerting its will.

Farewell to the Harvey I Knew

We can’t live in the past. The Harvey Weinstein I knew nearly a half century ago has gone his own way, as have I.

In college, you looked up to me, Harvey. In your desperate neediness, you couldn’t see through my pretense, my needing to appear hip and avant-garde. If I’d had your talents, Harvey, perhaps I would have gone much farther astray than I did. Money and fame eluded me, but I guess I was luckier than you. And life did not let me get away with what, in my insouciant arrogance and ambition, I secretly wanted to.

If we could have coffee, I’d share with you some of the ordeals that happened in my life, what I’ve learned and about the people who taught me. Despite many setbacks and traumas, I’ve been fortunate. I have loved and been loved. Women have been great teachers to me, some intimate, some maternal, and many have been platonic, wonderful influences. I have learned to respect women and to not take advantage of them. Except for my wife, I regard them as sisters, mothers, and daughters. I treat them with biblically directed protection, respect, and deference. I joke (respectfully) about the differences between men and women. I note with professional acumen the stereotypes that frequently characterize the brains and demeanors of the two sexes. I’ve written a book about this, too, aimed at improving harmony and satisfaction in marriage relationships.

With maturity, I have more confidence and less need to prove myself or be the center of attention. I’m more able to appreciate the difficulties women have in a male-dominated world. I’m grounded enough to speak up and to model for males how to respect, value, protect, and share equally with females.

With God’s help and the stringent sanctions of many people who knocked me off my self-constructed pedestal and put me in a proper place, I’ve tamed most of my narcissistic tendencies.

The Harvey Weinstein I knew has grown and devolved. Farewell naïve and callow college buddy. I still recognize you, Harvey; beneath the atrocities, there is a boy, now a man, desperate for satisfying love. I hope this is God’s way of teaching you how to find it.

— Mark Steinberg, Ph.D.

Soros Fund Co-Founder Jim Rogers on China and Global Investment

Jim Rogers has been fascinated by China since he drove his motorcycle across the country in the 1980s. The investing legend joins Real Vision to give his view of the rising Asian superpower and, more broadly, on rising Asia in general. Rogers provides his views on the Hong Kong crisis and the simmering trade war. He also weighs in on whether the era of US dollar primacy has passed — especially now that the United States has become, in Rogers’ view, “the largest debtor nation in the history of the world.” Filmed on September 10, 2019 in Singapore.

26:49
You know the rest of the story, you know what happened there, but Mr. Trump is smarter than
26:53
history so we don’t have to worry.
26:55
Mr. Trump knows he can handle history and none of us should worry, because he’s smarter
27:00
than history.
27:02
Even though people say trade wars are bad, and often lead to shooting wars, don’t worry,
27:10
I’m smarter than history.
27:11
MATT MILSOM: He does seem to be able to just move to the next person once he’s had– go
27:15
at somebody then it slackened off, just goes to next target is going to be Europe, once
27:20
he’s done with China, even though nothing’s actually resolved.
27:23
JIM ROGERS: The problem, Matt, is that when things get bad, so far the American economy
has held up well because of a lot of money printing, out of government spending, cut
taxes, everything possible to hold up the American economy has held it up.
When things get bad in America as they will, Mr. Trump is not going to say, “It’s my fault.
I got it wrong.”
Donald Trump is going to say those evil Germans, those Koreans, those Canadians, and he’s going
to come back hard with more and more whatever you want to call it.
The situation, we’re going to have the worst bear market in my lifetime.
I can tell I’m older than you, so it’s going to be the worst in your lifetime, too.
What I suggest you do is watch Real Vision, and you’ll get educated, and you will see
how bad things are.
Then you’ll get there.
Most people will turn on the internet or turn on the TV, say, “Wow, look at this.
Things are great.”
Mr. Trump tells you every day, if you watch American TV, he will explain you things are
really, really very good.
You don’t worry.
Maybe you need somebody crying wolf, maybe you need somebody saying, “Wait a minute,
guys, wait a minute.
Look at this.”
Maybe Real Vision is the last vision for all of us.
MATT MILSOM: You think he gets back in?
JIM ROGERS: Get back into what?
MATT MILSOM: Trump 2020?
JIM ROGERS: I got to respect you, what I think it’s– I know it’s very hard to dislodge a
sitting president in America for many, many reasons.

I would suspect that’s the same to this time.
Now, we got rid of Coolidge, and Hoover.
29:08
We got rid of Hoover because the market collapsed but we don’t have much time for that because
29:13
the election is only, what, 13-14 months away now.
29:18
If the market really collapses in the next 13 or 14 months, then I would change my view,
29:23
but there are enough things he can do, which is why it’s hard to get rid of sitting presidents.
29:30
They’ll prop things up long enough to get through the election.
29:34
I would, if I were betting and I’m not a betting man, but if I were, I would bet that Trump
29:39
will be reelected.
29:40
MATT MILSOM: A lot of speculation that he might actually start to swerve the Fed and
29:45
play the currency markets himself for the Treasury.
29:48
JIM ROGERS: What, Trump will start buying what?
29:51
US dollars or renminbi?
29:52
What’s he going to buy?
29:53
MATT MILSOM: He’s going to be selling dollars.
29:54
JIM ROGERS: He could do that.
29:56
Yes, and he might.
29:58
He cannot force the Fed to do it.
30:00
No, but he could, he could browbeat him.
30:03
He can certainly force the Treasury to do that, to sell US dollars.
30:10
First of all, I’m not sure the market would put up with it, it would for a while, obviously,
30:14
it would for a while, but eventually, the market, as I said to you before, I mentioned
30:18
the market’s going to say to these guys, “We’re not going to play this game anymore.
30:23
This is an absurd, ludicrous game.
30:25
It’s never happened before.
30:26
We know it’s not going to work.
30:28
We’re not going to play anymore.”
30:30
Okay, maybe we’ll try.
30:32
I don’t think it’s enough.
30:34
Maybe it’s enough to save the election, I said to you before.
30:36
It’s so difficult to dislodge a sitting president.
30:38
There are lots of things he can do.
30:41
If he needs votes in that state, he spends a lot of money in that state.
30:45
His opponent cannot do that, the opponent can say look, what a terrible person he is.
30:49
He’s spending money in your state.
30:51
The people say, thank you, thank you spend more money in my state.
30:54
We’ll vote for you.
30:55
MATT MILSOM: He can almost play the Fed to his own fiddle, I guess at the same time.
31:00
He can blame them if it goes– JIM ROGERS: He certainly can blame them, whether he can
31:03
persuade them.
31:04
He seems to be persuading them now is another question, but sure.
31:08
That’s what I mean, if he goes in there and threatens them, or does x or does y, sure
31:14
he can.
31:15
That’s the problem when you’re the president, or the advantage when you’re the president.
31:19
MATT MILSOM: I see Powell’s having a bit more backup by myself.
31:21
I just think he’s his own guy.
31:24
Really, he’s not a PhD Economics.
31:26
He’s a– JIM ROGERS: That’s the best news.
31:29
I believe PhDs, which is bad news.
31:34
We’ll see.
31:35
MATT MILSOM: I could see that arising a bigger conflict there, you think between Powell and–
31:39
JIM ROGERS: No, I can see a huge conflict and that’s going to– the Federal Reserve,
31:45
its debt went up by five, six times in 10 years.
31:50
If I had said to you 20 years ago, a major central bank in the world is going to increase
31:55
the debt on its balance sheet by 500% in 10 years, you’re going to say, “Get out of here.
31:59
We’re not going to talk to you anymore.
32:01
You’re not even smart enough to talk on TV.
32:04
What are you talking about?”
32:05
It’s inconceivable that it could have happened, but it’s happened.
32:09
Sure, they have a problem, too.
32:12
How far can they go?
32:14
How far can any of us go?
32:16
MATT MILSOM: It surprised me the volatility’s so cheapened right now.
32:20
JIM ROGERS: The debt worldwide is the highest in world history.
32:25
Interest rates are the lowest in world history.
32:27
In 2008, we had a big debt problem.
32:31
China, which had a lot of money saves for a rainy day, started spending the money and
32:36
helped save the world, but even China now has debt.
32:40
China can’t save the world anymore.
32:42
The central bank came riding in with its printing presses, helped save the world.
32:47
That’s getting late for all the printing presses in the world.
32:51
It’s getting late in the day.
32:52
MATT MILSOM: Is the rate of change as well as a debt in China that’s extraordinary just–
32:56
JIM ROGERS: Oh, no, I know.
32:58
To repeat, ports in China has said we’ll let them go bankrupt.
33:02
I don’t think they will.
33:04
Not that they’re lying, I think they believe that they’re going to let people go bankrupt
33:08
but they haven’t had this problem in decades.
33:14
They’re bureaucrats and they’re academics, haven’t felt the pressure of people calling
33:18
up saying, “You must save Chinese civilization.
33:22
This is Chinese history, our image our integrity.”
33:25
No, they haven’t had that gigantic pressure from everybody in the country, they’re saying,
33:31
“Save Chinese civilization.”
33:33
What they really mean it save me.
33:35
They haven’t had that yet.
33:37
MATT MILSOM: Xi as a link leader seems to be much more of a Maoist than ever before,
33:43
to me.
33:44
JIM ROGERS: I’m not sure Maoist, but they’re certainly closing off in that sense.
33:49
Yes.
33:50
Deng Xiaoping started opening up and Deng Xiaoping said you open the windows, you’re
33:55
going to get some flies, but you’re going to get fresh air and sunshine, and the fresh
33:59
air and the sunshine are worth the flies.
34:03
He seems to be saying we don’t want flies and the last 40 years, much of the progress
34:11
has been 18-year-olds in a garage doing crazy things on the computer.
34:16
Alibaba, Microsoft, the names go on, and on and on.
34:20
These were just kids doing wild, crazy things on the internet, which was open and free to
34:24
nearly everybody.
34:26
You start closing these things off, and it’s going to slow progress, it’s going to slow
34:31
things now, whether we like it, history is always showing that.
34:35
You close off and you go into decline.
34:38
It does seem to be happening not just in China, even in the US, but it does seem to be happening
34:43
more and more, so maybe we’re in for the dark ages again.
34:48
MATT MILSOM: I don’t know.
34:50
It’s almost that you think about where you’re going to head or what currency you need to
34:53
get into, where you’re going to be safe.
34:55
Do you know what I mean?
34:57
You start thinking about– JIM ROGERS: That’s not what I mean.
34:58
I don’t have a job.
34:59
I can’t figure out a way to save myself.
35:01
MATT MILSOM: You made the move to Asia on the back of those thoughts, I guess that that’s
35:06
going to be a Pacific centuries.
35:07
JIM ROGERS: Well, I moved here you because I know that the 20th century is Asia, 21st
35:12
century is Asia.
35:13
I wanted my children to know Asia and to speak Mandarin.
35:18
That’s the best preparation I can give them for the 21st century.
35:22
That’s why I’m here.
35:23
Of course, Asia is continuing to develop and boom and head of the rest of the world.
35:28
There is some debt in Asia, but nothing like in the West.
35:32
Most of the Western countries are really broke, especially when you pull into pension plans.
35:38
Europe’s got gigantic pension, US too, gigantic pension obligations, which they’ll never able
35:43
to [indiscernible].
35:44
MATT MILSOM: Yeah.
35:45
Demographically, where does that end up?
35:46
JIM ROGERS: It’s already starting to ruin a lot of people.
35:48
Asia has probably– will have problems but nothing like some that are rising in the West.
35:53
I can’t bear for my kids.
35:55
MATT MILSOM: The world of agricultural investment view is still a– JIM ROGERS: Yeah, agriculture
36:00
has been a disaster for 35 years or so.
36:03
The average age of farmers in America is 58.
36:07
More people in America study public relations and study agriculture.
36:12
The highest rate of suicide in the UK is agriculture.
36:15
Of Japan, the average age of farmers is 68.
36:20
Nobody becomes a farmer, you go to Japan now, there’re huge stretches of land, they’re just
36:24
empty.
36:25
They can’t find anybody to farm them.
36:27
Farmers have died, the kids have gone to Osaka.
36:29
There’s nobody to farm that land.
36:30
If you want to be a former, go to Japan.
36:33
You can get a lot of land cheap.
36:36
That’s true.
36:37
Australia, Canada, all of these countries have very, very aged old farmers, men and
36:45
women.
36:46
It’s millions of Indian farmers have committed suicide, as I’m sure you know.
36:52
No, no, agriculture is a disaster.
36:55
The Chinese have a word, you know the Chinese word weiji?
36:58
It means disaster and opportunity are the same and they are.
37:02
If you can survive the disaster, you’re going to make a lot of money with the opportunity.
37:07
MATT MILSOM: I guess the commodity complex per se, are softer on their knees-ish for
37:11
the last five years.
37:12
They’re actually doing okay in the States.
37:16
JIM ROGERS: Yeah, yeah.
37:17
Things like sugar, sugar is down over 80% in the last 40 years, what do you notice down
37:24
80% in the last 40 years?
37:27
My IQ.
37:28
Other than that, there’s not much that has declined, that deteriorated like some of the
37:34
agricultural products.
37:35
MATT MILSOM: Difficult bet to make given the climate change, too?
37:38
JIM ROGERS: Well, yeah, climate change is taking place, is taking place for thousands
37:44
of years.
37:45
Go back and look at trees, and soil layers and iceberg layer, we see that climate change
37:53
has always been taking place one way or the other, and it seems to be happening again.
37:58
Of course, that’s going to be great for some farmers, disastrous for other farmers.
38:04
The key is to be the farmer that it’s great for, not to be a farmer that gets wiped out
38:09
because of climate change.
38:11
The Sahara Desert, which is the size of the continent with 48 states, used to be a huge
38:18
agricultural area.
38:19
Pigs, cows, wheat, corn, everything, huge, huge.
38:24
We had climate change.
38:26
We had ecological change, you know the rest of that story.
38:30
If you were a farmer in Algeria 2000 years ago, you probably didn’t do very well.
38:36
You should have moved to Iowa 2000 years ago.
38:40
MATT MILSOM: Would it be too much to ask your asset allocation now?
38:44
JIM ROGERS: You can ask, I don’t know.
38:46
I don’t sit around.
38:48
I don’t have a committee met.
38:49
I don’t have anybody to answer to.
38:52
I know I can still pay my bills.
38:54
I do own some gold and silver.
38:56
I do own a lot of US dollars, I’ve told you about.
38:59
I’m short some junk bonds, short the ETF, Russia, China.
39:06
I don’t own a lot of shares anywhere right now.
39:11
The Japanese market, I sold out of.
39:13
I used to own a lot of Japanese shares, sold out completely.
39:16
MATT MILSOM: Why was that?
39:17
JIM ROGERS: I bought them so well.
39:19
It’s not often I get it right so I’m going to brag for a minute.
39:22
The Japanese market was very, very cheap and I started by and then the tsunami.
39:28
Remember the tsunami?
39:29
Everything collapsed, I bought a little, gone up a lot, it tripled since then.
39:33
I could see wasabi and the toll got stronger and stronger and stronger.
39:38
They’d already printed lots of money.
39:40
The central bank said we’ll print as much as we have to.
39:44
That’s what they said.
39:45
They said it out loud.
39:46
Not some crazy guy saying it.
39:50
I said what else can happen?
39:52
What else can go right?
39:53
They’ve spent a lot of money on infrastructure.
39:58
They bought a lot of securities, so I sold out.
40:04
So far, I’m right, but don’t worry, I make plenty of mistakes.
40:07
MATT MILSOM: I guess, it changed your beast, don’t even trade anymore, eh, because there’s
40:10
no float?
40:11
JIM ROGERS: Nothing to trade, why would you buy them?
40:14
Who’s going to buy them, except a central bank?
40:16
MATT MILSOM: They have to keep going?
40:18
JIM ROGERS: I told you I have.
40:21
I’m going to Japan tomorrow, there’s been a best seller saying, “A Warning to Japan.”
40:25
If they keep going– MATT MILSOM: That’s a book?
40:28
JIM ROGERS: Yeah.
40:29
MATT MILSOM: Sorry, I didn’t know that.
40:30
JIM ROGERS: No, it’s the number one bestseller.
40:31
MATT MILSOM: Congratulations.
40:32
JIM ROGERS: I’m shocked.
40:33
I’ve made two number one bestsellers.
40:34
MATT MILSOM: What was the other one?
40:35
JIM ROGERS: I forget that, it was some Japanese.
40:36
It was something like, “A Warning to Japan.”
40:39
MATT MILSOM: But this is a specific for that market, or they were– JIM ROGERS: Two books
40:43
in Japanese.
40:44
They were translated, my English was translated into Japanese.
40:48
Two books in 2019 have been number one bestsellers by me.
40:54
This is a shock.
40:55
How could this happen?
40:56
I’m more surprised than anybody.
40:58
They called me up, that smarty say you got to come to Tokyo.
41:01
I said why?
41:02
He said your books have won bestseller.
41:03
I forgot about the book.
41:04
The book resulted from some reporters coming here and interviewing me like you.
41:09
We’re out for several hours.
41:10
I said we’re going to publish this.
41:12
Okay, go ahead.
41:13
I don’t care.
41:14
Forgot about it.
41:15
MATT MILSOM: You got a book tour now?
41:17
JIM ROGERS: Yeah, I’m leaving tomorrow.
41:18
I’m going tomorrow for a book tour in various cities of Japan, promoting, “A Warning to
41:24
Japan.”
41:25
MATT MILSOM: What was the essence of that?
41:26
Was that demographics or that– JIM ROGERS: If you’re 10 years old, you better get out.
41:28
If you’re 10 years old, you better get an AK47 and learn how to use it.
41:33
These are not– it’s simple.
41:36
I say to them, they will say, of course, he’s a foreigner.
41:40
Don’t worry.
41:41
The Japanese don’t like foreigners, and so they will just say, he’s a– whenever they
41:44
say they don’t like somebody, they say he’s a foreigner so you don’t have to listen to
41:47
him.
41:48
I say to them, yeah, okay, I’m a foreigner, but this is arithmetic.
41:51
It’s addition, the debt goes up every day.
41:55
That’s simple addition and it’s subtraction, the population goes down every day.
42:02
Central bank has been printing huge amounts of money.
42:05
This is just simple addition and subtract.
42:09
Forget that I’m foreigner and for some reason, both of them became number one bestsellers.
42:15
I guess it’s because nobody in Japan ever says things like this.
42:18
I don’t know why I became, but listen, I’m shocked.
42:22
MATT MILSOM: Do you have any views on Softbank?
42:25
JIM ROGERS: So far, they’ve made a lot of money but I don’t know enough to say much
42:30
more than that.
42:31
I read that problems are developing, but I have no knowledge, enough knowledge to say
42:39
anything other than that.
42:40
MATT MILSOM: I guess WeWork is the speculation for those issues there, for the float.
42:45
JIM ROGERS: WeWork is not their only asset at Softbank.
42:49
What I read about WeWork, WeWork may be one of those things.
42:55
You remember in 1999?
42:56
I think it was called pets.com or something.
43:00
It was one of those things that was when people talk about the end of the bull market or the
43:05
signal, or the sign that it was over, that may be WeWork now.
43:13
They were printed out in 1999.
43:19
That’s the one that people often bring up, I was not sure.
43:21
I wish I had but they bring that one up.
43:25
Now, if you look at the current bull market, maybe someday in 10 years, we’re all going
43:31
to look back and say, “They rang that bell.
43:35
That bell was called WeWork.
43:38
That was the sign that we were coming to the end.”
43:42
It’s always something that people look back on that it may be WeWork.
43:46
MATT MILSOM: The amount of questioning that browned the IPO pricing makes you think that
43:50
the greater fool game may have just come to a grinding halt.
43:54
JIM ROGERS: I’ve never read the Prospectus but I’ve read a lot in the papers about the
43:58
story, the company, that IPO, the CEO, etc.
44:04
Just I’m sure you have too.
44:05
I read it and I say this is 1929, this is 1999.
44:12
This has all happened before.
44:14
MATT MILSOM: They have nines in them.
44:18
JIM ROGERS: Yeah.
44:20
See, 1899– well, anyway, you read, I read this stuff and I’d say oh, yeah, this has
44:26
happened before.
44:27
I remember reading about things like this in previous bull markets, previous bubbles.
44:33
MATT MILSOM: What brings you to an investment then?
44:36
Is there a sector or there is an idea or somebody pitches to you?
44:38
JIM ROGERS: No, it’s usually– the nature of who I am, I’m always looking or I’m always
44:45
listening.
44:46
If I stumble on something, I’m not out looking like I used to, but if I stumbled on something,
44:53
I often do homework and then I’m in this Russian stock that I’m buying, I stumbled on it.
44:58
The more homework I do, the more I buy.
45:02
I continue but it’s usually I will stumble on something.
45:04
MATT MILSOM: Public, is it a public stock?
45:06
JIM ROGERS: Yeah, it’s a public company.
45:08
MATT MILSOM: Sector?
45:10
Which sector would have been?
45:11
JIM ROGERS: You’re a very good reporter, but I’m not going to tell you because if I told
45:15
you, you would know exactly what I’m buying.
45:17
MATT MILSOM: Okay.
45:18
I’m sure it wouldn’t be that easy to spot.
45:20
JIM ROGERS: There are plenty of disasters in Russia.
45:23
Everybody hates Russia now, so Russia’s on my list.
45:28
Anyway, I will probably buy Russian government bonds and rubles again soon.
45:34
I own Russian government bonds in rubles.
45:37
The yield is very, very high.
45:38
The ruble is hated.
45:39
The Russians are hated, et cetera.
45:41
MATT MILSOM: Any other markets that are particularly hated that you fancy?
45:44
JIM ROGERS: Well, I told you Venezuela but you and I cannot do it.
45:48
I cannot do anything in Venezuela.
45:51
Zimbabwe, I bought a few shares of Zimbabwe, some of the North Korea but that’s illegal,
45:57
too.
45:58
I’m looking, but part of the problem is there are few markets that are hated so much.
46:06
I mean I am buying Russia, it’s still hated.
46:10
Most markets, even Germany.
46:12
Look at Germany hit peak, what, two years ago.
46:15
Been going out since but it’s not cheap.
46:18
It’s not hated.
46:19
Germany still a very large and [indiscernible] economy.
46:23
No, I don’t see many now that jumps off the page to me and says, oh my God, you got to
46:30
buy this disaster.
46:31
I would love to find something like that, but I’m too lazy.
46:34
MATT MILSOM: I’m thinking there’s probably a good places to stop.
46:38
JIM ROGERS: I’m too lazy.
46:41
Very good places to stop buying, I commend laziness to all of you.
46:45
Watch Real Vision and get lazier and lazier, and lazier.
46:48
MATT MILSOM: Jim, thanks for having us and thanks very much for coming on.
46:50
JIM ROGERS: My delight, my pleasure.

The Reason Trump is President – Peter Schiff

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08:12
so the opposite of what everybody
expected happened when we elected George
Bush because the bubble burst under Bush
but here’s a problem when the bubble
burst Bush did not blame that recession
that we had in 2001 he did not say hey
we had a bubble under Bill Clinton and
now we have to deal with the
consequences we have all these
malinvestments because of the stock
market bubble and we’re gonna have to go
through a recession as we work our way
out of these imbalances no he made the
mistake of trying to use Keynesian
stimulus budget deficits and Alan
Greenspan slashed interest rates
to 1% and we were able to mitigate the
severity of that recession it was the
shallowest recession in US history and
we replaced the stock market bubble with
a housing bubble and that housing bubble
created enough phony wealth and enough
phony prosperity to buy George Bush’s
second term but the consequence of that
bubble blew up in 2008 while built while
George Bush was still in office and so
ultimately that bubble collapsed and
that’s what paved a way for Barack Obama
but this time I don’t think George
Donald Trump is going to be so lucky
because I think when the bubble bursts
now and it’s all the same bubble it’s
all a continuation of the same policy
because when the housing bubble burst
instead of lowering interest rates to 1%
the Fed didn’t stop at 1% days passed
when and went all the way to zero and
they stayed there for like 7 years and
now despite all this talk about how
they’re gonna normalize rates and raise
rates they’ve only raised them twice
they’ve raised them by 50 basis points
there’s still half of where greenspan
slashed the middlee you know in 2002 and
so now it’s not just that we reflate
‘add the real estate bubble or reef
lated the stock market bubble because we
have both but now we have a massive bond
market bubble we have us we have a
repeat of the dollar bubble we have the
same dollar bubble we had in the late
1990s we pretty much have a bubble in
everything where we had a bubble in auto
loans a bubble in student loans we have
now so much debt the national debt is 20
trillion right the national debt doubled
under under Bush from 5 trillion to 10
trillion it doubled under Obama from 10
trillion to 20 trillion I mean is it
even within the scope of possibility
that we can go from 20 trillion to 40
trillion assuming that you know Trump
was in office for eight years
but I think at this point and interest
11:08
rates are already starting to rise this
11:10
is going to be the problem this is the
11:12
pin that pricks this debt bubble is
11:14
rising interest rates
11:16
I mean why has the Fed kept rates so low
11:18
for so long because they can’t raise
11:20
them that’s why I mean they want to
11:23
pretend that well you know we’re we’re
11:25
just trying to make sure everything is
11:26
okay look if everything was okay when we
11:29
raise rates it’s because they can’t
11:31
raise rates because the debt is too high
11:33
what would happen to the budget if
11:38
interest rates went up right now we’ve
11:40
got a twenty trillion dollar national
11:41
debt yet we pay less interest on the
11:43
national debt than we paid when Ronald
11:45
Reagan was president and the national
11:47
debt was one trillion so all of this is
11:51
possible because interest rates are so
11:53
low if interest rates went back to 5%
11:56
which is still not high 5% you’d be
12:01
talking about an extra trillion dollars
12:03
a year or an interest on the national
12:05
that every year
12:07
where’d that money come from what if
12:10
interest rates went to 10% oh it’s I
12:12
mean they went higher than that under
12:15
under Paul Volcker but even some of
12:18
between five and ten and then what about
12:19
the housing market where would work
12:22
mortgage rates have been averaging the
12:24
last you know a few years mortgage rates
12:25
three and a half four percent yet
12:28
homeownership in America is at a 60-year
12:30
low what would happen into the
12:31
real-estate market if mortgage rates
12:33
went to 6 or 7% or 8% I mean that’s
12:36
normal for a mortgage nobody could
12:39
afford a house now how the market would
12:41
implode what about the corporate
12:43
corporate sector corporate America why
12:45
do you think the Dow is flirting with
12:46
20,000 it’s not because US companies are
12:49
earning all this money it’s because they
12:51
levered up during the era of cheap money
12:53
and they bought back a bunch of stock
12:55
you know and so we have this gigantic
12:57
bubble and Donald Trump is right you
12:59
know the last eight years have been a
13:00
disaster right our our country is
13:03
littered with closed out factories that
13:05
are like tombstones right people have
13:08
lost good jobs we’ve had massive debt
13:10
but there is no quick fix to all this I
13:13
mean Donald Trump talks as if all we
13:15
have to do is renegotiate NAFTA
13:17
right all we have to do is have smarter
13:19
bureaucrats negotiating and the trade
13:22
deficits are gonna go away no they’re
13:23
not you know and Donald Trump talks
13:26
about how you know the world has been
13:27
taking advantage of America no we’ve
13:30
been taking advantage of the world
13:31
that’s what he doesn’t understand right
13:33
what is the relationship that America
13:36
has with the rest of the world
13:37
well we consume in the world produces
13:40
well I mean well obviously we’re the
13:42
beneficiaries of that we we get to
13:44
consume all sorts of products yes the
13:46
factories are all gone but the consumer
13:49
goods that the factories used to produce
13:50
they’re still here
13:52
how are we getting all these goods that
13:54
we don’t produce because people in other
13:56
countries are dumb enough to give them
13:58
to us now they don’t think they’re
14:00
giving them to us they think they’re
14:01
selling them but they’re not because
14:03
we’re borrowing the money to buy it and
14:04
we’re never gonna pay it back I mean we
14:07
don’t have the capacity to pay it back
14:09
we don’t have the intention of paying it
14:10
back so the world has been conned into
14:13
supporting this this relationship so
14:15
Donald Trump has that backwards the
14:17
world loans us the money to buy their
14:20
products so in order to make America
14:23
great again and Donald Trump talks with
14:24
us all the time we’re gonna have to go
14:26
through a massive recession and the
14:31
scary part is Donald Trump is not
14:32
preparing any Americans for any of the
14:35
pain that is necessary if we’re going to
14:38
write this economic ship if we’re going
14:40
to have real production in America again
14:43
Americans have to stop spending we have
14:46
to start saving we have to start
14:49
investing in plant and equipment you
14:51
know Donald Trump wants to deliver tax
14:53
relief to the middle class how we have
14:56
20 trillion in debt the middle class is
14:58
on the hook for that we have a massive
15:00
government that the middle class has to
15:02
support the only way to deliver tax
15:04
relief is to slash government but Donald
15:07
Trump is talking about more spending on
15:09
the military more spending on
15:10
infrastructure more spending on the
15:12
border we’re not going to make any cuts
15:14
to Social Security we’re not gonna make
15:15
any cuts to Medicare and he’s gonna
15:17
replace Obamacare with Trump care what’s
15:19
that gonna cost I don’t know
15:21
yes he’s talking about some kind of cuts
15:23
to discretionary spending but they’re
15:25
gonna be tiny compared to all these
15:27
increases so none of this is possible it
15:30
seems to me
15:31
that all that all Trump is trying to do
15:33
is make the bubble bigger right he’s
15:35
saying you know we want to I want to I
15:37
want to change it right now right you
15:38
have all this quantitative easing that
15:40
has benefited the 1% benefited the rich
15:43
benefit of Wall Street maybe he wants to
15:45
target monetary policy or fiscal policy
15:47
to somehow benefit the middle class what
15:49
would actually benefit the middle class
15:51
is going to be to free up the economy
15:54
from the burden of government
15:55
unshackle the middle class from
15:57
government but in order to have this
15:59
transition we can’t go from a consumer
16:02
credit bubble economy to a real savings
16:05
base productive economy without
16:08
collapsing the asset markets stock
16:10
prices have to come down a lot real
16:12
estate prices have to come down a lot
16:14
bond prices have to come down a lot
16:16
interest rates have to go way up and
16:18
when that happens a lot of companies go
16:20
bankrupt a lot of banks fail a lot of
16:23
people lose money a lot of people lose
16:25
jobs this has to happen it should have
16:28
happened in 2001 but it didn’t it should
16:31
have happened in 2008 but it didn’t
16:33
because they kept you know blowing the
16:35
bubble up with more and more air and now
16:38
it is just so big it’s just so ignore
16:40
that it can’t possibly not pop and I
16:43
don’t think there is there’s another
16:46
bubble that the Fed has up and sleeve
16:47
and you know Donald Trump of course you
16:49
know he criticized the Fed when he was a
16:51
candidate I don’t think he’s gonna do
16:53
that as president in fact when Donald
16:54
Trump ran for office he talked about the
16:57
stock market he said it was a big fat
16:59
ugly bubble well it’s bigger fatter and
17:03
uglier now but he never mentions it as a
17:04
bubble because now it’s his bubble he
17:07
doesn’t want it to deflate he wants it
17:09
to keep going up he doesn’t want to get
17:11
blamed for all the bad things that are
17:14
about to happen and he’s I think setting
17:16
himself up for a disappointment because
17:18
he’s promising so much everything is
17:20
gonna be so great it’s not and and he is
17:23
appointing a lot of business people
17:26
smart people to the cabinet but they
17:28
have no idea what they just bit off and
17:31
I think the markets and I’ll talk more
17:33
about this tomorrow
17:35
but I think we have a real opportunity
17:36
here because this dollar bubble it is as
17:39
big as the dollar bubble that popped
17:41
when Bush took over because
17:45
when this market when the economy ends
17:47
up being a lot weaker then people
17:50
believe because the economy has been
17:52
decelerate and you know we’re far as I’m
17:54
concerned the only reason we’re not in a
17:56
recession is because the government
17:58
isn’t honest about the inflation rate
17:59
because they take the nominal GDP and
18:02
and they deflate it but a lot of people
18:05
are thinking hey if we’re gonna get this
18:07
fiscal stimulus we don’t need the Fed
18:09
anymore right that’s what’s been that’s
18:11
what helped the dollar and hurt gold
18:13
hey the feds gonna raise rates because
18:15
now they’re not the only game in town
18:17
right before we couldn’t get any fiscal
18:19
stimulus because we had gridlock but now
18:22
that we have Republicans in Congress and
18:24
we have a Republican president we’re
18:26
finally gonna get the fiscal stimulus so
18:29
now the Fed can back off and let rates
18:31
go up they got it wrong the only way we
18:34
can have so-called fiscal stimulus is if
18:37
we get an even bigger dose of monetary
18:39
stimulus to make it possible because if
18:41
the Fed is gonna be letting interest
18:43
rates go up and they’re not going to be
18:44
monetizing debt with QE and we’re gonna
18:47
take the budget deficits and increase
18:50
them dramatically to finance tax cuts
18:52
and more government spending who’s gonna
18:54
buy all those bonds the Chinese aren’t
18:57
gonna buy them they’re selling the
18:59
Japanese aren’t buying them the Russians
19:00
aren’t gonna buy them a Saudis or
19:01
everybody is selling everybody is
19:03
selling Treasuries in fact the bond
19:05
bubble the bull market that started in
19:08
1981 is pretty much over the whole world
19:10
wants out of Treasuries how are we going
19:13
to finance massive deficits in a bond
19:15
bear market where nobody wants to buy
19:17
our debt and if interest rates go up the
19:20
the depressing effect on the bubble
19:22
economy of rising rates will more than
19:25
offset the stimulus of the tax cuts I
19:27
mean just what people are gonna have to
19:29
pay an extra debt service costs are
19:31
gonna destroy whatever benefits they get
19:33
from whatever tax cuts and the tax cuts
19:36
are talking about our minimal they’re
19:37
not even as big as bush they’re nowhere
19:39
near like Reagan there are people
19:40
comparing Trump to Reagan I mean it’s
19:43
just it’s night and day I mean when
19:44
Reagan came in the debt to GDP was 30%
19:48
now it’s over a hundred percent when
19:50
Reagan came in interest rates on 30-year
19:52
bonds were 14% they had nowhere to go
19:55
but down
19:55
short-term rates were 20%
19:58
the stock market was at a p/e of seven
20:00
so we had cheap stocks we had expensive
20:05
money and they cut rates dramatically
20:07
Reagan’s rate cuts the marginal rate
20:09
went from what 70 percent down to 30 son
20:11
was a huge cut in marginal tax rates and
20:13
yes Reagan ran up the deficits but we
20:16
were able to finance him because we were
20:18
a wealthy country when Reagan was
20:20
elected we had trade surpluses in
20:21
America when Reagan was elected we were
20:24
still the world’s wealthiest creditor
20:25
nation not the world’s biggest debtor so
20:28
Trump is coming in at a time that’s why
20:30
I say it’s not morning in America it’s
20:32
midnight in America but people are as
20:34
optimistic now as they were then they
20:36
actually believed that all these
20:37
problems can be solved just because
20:40
Donald Trump is the first person to have
20:41
the courage to actually you know call
20:44
the problems out right to actually say
20:47
what a lot of Americans were thinking it
20:49
didn’t all didn’t buy all this hype and
20:50
all this propaganda about how good
20:52
things were but as the air comes out of
20:55
this bubble when the Fed has to come
20:56
back with more QE when they have to cut
20:59
rates have I gone over oh it’s kind of
21:03
yeah hello it’s counting up I must have
21:05
gone over all right so when the event
21:08
when the Fed has to has to cut rates and
21:10
they have to do QE four and I think this
21:12
next round of quantitative easing is
21:14
going to be bigger than the last three
21:16
combined and what’s gonna really
21:17
surprise people is just as the Fed is
21:20
easing the ECB is gonna be tightening
21:22
because inflation is picking up all over
21:24
the world
21:25
inflation in Europe is picking up it’s
21:28
gonna be above 2% sometime this year
21:30
they can’t have that the Bundesbank is
21:32
not gonna allow they’re gonna have to
21:34
start taping their QE they’re gonna have
21:36
to start raising interest rates so it’s
21:38
gonna be the exact opposite instead of
21:40
the world you know ECB easing and the
21:43
Fed tightening it’s gonna be the reverse
21:45
and I think the dollar is gonna fall
21:46
through the floor and eventually this is
21:49
going to end in a currency crisis
21:50
there’s no way around that that we’re
21:52
gonna have a dollar crisis and we almost
21:55
had a dollar crisis in 2008
21:58
but it was saved by the financial crisis
22:00
we’re not gonna get that lucky next time
22:02
anyway I’ll be at my booth thank you
22:06
[Applause]
22:17
you