Money Is Dying: Take Your Cash Out of the Banks?

Money Is Dying: You Need to Take Cash Out of Banks and the System, Urges Willem Middelkoop

Video Transcript

hi this is daniela camboni and i just had the pleasure of emceeing the stansberry conference and alliance meeting in las vegas it’s our most successful conference for investors and alliance members to date all of the stansberry editors were there propelling conversations forward alongside our keynote speakers mohamed ellarian and grant williams and my long time friend and goldbug john duty the stansberry alliance conference is an event i look forward to every year and for a limited time you have access to watch the live stream from last week’s presentations with free ticker recommendations and panel conversations among the smartest analysts i know and more so you still have time to be in the room with these folks and me by purchasing a live stream ticket visit that’s danny to gain access now we hope you don’t miss this chance see you soon hi this is daniela cambone and welcome back to stansberry research and to my guest today who says what a time to be alive he compares it to the fall of rome but with wi-fi joining me today is william middle cop he’s the author of the big reset and it’s always a great day when he joins us willem good to see you great to be back i think was five months ago and so much has happened and um well actually that that quote came from a meme on reddit i used it but i love it well it definitely rings true and uh we have a lot to discuss willem uh for those at home buckle up get comfortable sit back because i’m telling you this is gonna be an episode for the ages uh willem um you know let’s just start with your thoughts generally on where we are you say that the crisis is really hitting the core right now it’s really hitting close to home how do you see things today yeah i think it was around 2010 that i gave a presentation and telling the audience that around 2015 many many problems would well all merge or would all emerge and i think it took it took a few years longer but now we’re here and almost everything is falling apart and i i made a short list of crisis i said i sent you some notes yesterday yes and i just want to list them you know before we we go on you you like you said you gave this presentation around 2010 you said we should likely see most of these crises unfold by 2015 a few a few years later we’re basically seeing all of them right now you mentioned the energy crisis climate crisis covic crisis refugee crisis monetary crisis china crisis which is a big one we’ll get to later the bond crisis labor crisis transport supply chain crisis hello happening right now and what you call the 800 pound gorilla do you want to say it yeah it’s it’s what i call the super inflation exactly prices don’t talk about hyperinflation you know hyper inflation is very rare we shouldn’t use that word too much although the ceo of uh of twitter warned for hyperinflation but i think let’s call it super inflation you know inflation of 10 to 10 or more and and then uh because of the super inflation we get a food crisis as well you know this is very this is very scary next we’ll have a food crisis because food is connected to energy and we have the ceo of a large norwegian company a food company or actually they produce fertilizers and they warn that to produce fertilizers which we need to grow food the cost price of making this fertilizer especially ammoniac has grown by tenfold it used to be 100 dollars for for one amount of fertilizer to to produce and now it’s one thousand dollars so he’s warning about a food crisis which will be next and you know china has been advising over one billion people to stock up food food supplies that that’s that’s weird that’s scary well you know it’s funny you you say that william and and resoundingly true uh you know i was just basically doing a check on you know fresh direct or amazon the other day and i saw uh bottles of water hard to get a hold of diet coke hard to get a hold of diapers starting to become uh hard to get a hold of so the supply chain crisis is is real but bringing it back to your point about inflation the fed can’t even hide it now we had fed vice chair clarita coming out earlier this week saying look another year of inflation like this would not be a policy success how concerned are they about the inflationary trap right now willem i think they feel trapped and they are trapped and one of the best signs of that was a treat by a dutch formal central banker um and that’s his name is lex hovdan i know him well i interviewed him many times i met him many times and he tweeted last month that the ecb is trapped and he’s he’s a former central banker he’s been running around in those circles for four decades and when the ecb is trapped and of course they are because they can’t lower or they can’t raise interest rates what what they would need to do to to conquer the inflation to combat the inflation but they can’t raise interest rates because there’s so much depth out there so and when the ecb is trapped the fat is trapped as well and and the bank of uh they’re all they’re all trapped now and they understand and what’s what’s very telling that the bundesbank president the german central bank president he’s leaving we had we had a uh the news yesterday one of the new year fed governors is leaving so that that’s very telling you know it’s getting scary you know we talked about this for years i want our audience for 20 years that one day we’ll reach the point that you can’t ignore this any longer you know this was laughed about and now we’re here you can’t ignore it any longer i meet rich people every day every day this morning i met a guy he sold his company 40 million in cash he doesn’t know what to do because he he sees the warning signs he wants to cash out early yeah well yeah he he wanted to to sell the companies to to be be flexible but now he has a bank account with 40 million right right yeah and that’s something you you said you’re you’re seeing a lot people not wanting to get rid of their cash almost and that’s why alternative assets like gold silver and the cryptos have everything we were talking this morning about for him about buying uh old historic cars or old paintings or whatever you know he needs to spend to invest that cash but he’s already loaded on real estate so real estate first for for many people you know they already have a lot of real estate the cash is not an option bonds are not an option anymore it’s a guaranteed loss so where can you go you can only go to the stock market but that’s that’s very rich value so we were discussing what can you do with 40 million cash and still buy things which aren’t that expensive and then of course i was talking about commodities being at a 100 year low still many commodity companies are still valued at a 100 year low or near a 100 year low the price earnings of commodity companies gold miners it is around between five and 15 compared to tech companies when a tech company is trading at the pe price earnings ratio of 25 we say is cheap i can give you examples of gold producers who have a price earnings ratio of five so there’s still value to be found and and and that’s why i i like one of these quotes that you’ve said um when stocks keep rising the stock smart people understand the value of money is declining but the masses still don’t get it when all prices go up when bitcoin is hitting all-time highs every day when stock exchanges are hitting all-time highs every day when real estate is making records you know when prices of all major important essence keep rising we’re not getting richer it means the money is getting we’re losing the purchasing power of money it’s the debasement of currency it’s a huge warning sign that money is dying this is where you know some of the best books about the hyperinflation of weimar germany in the 1920s it’s when money dies but this this is very very serious and it’s very hard to stop this once you get the spiral that people lose trust in cash and loans and start moving their their money to to all the government can’t print actually we’ve been telling people you know for the last 10 years buy all the government can’t print and now people are starting to do this worldwide and that’s very hard to stop to your point about super inflation you say forget hyperinflation when you speak of superinflation what’s the definition for you william it’s inflation running at what rate at over 10 percent a year but not the official official inflation the official inflation will show four or five percent but as you might know you have this guy of he’s a foreign economist and he’s using the old model to calculate the inflation the model from the 1980s the official official model and when he uses this 1980 if inflation model um he finds out that inflation with you guys in u.s is 11 12 13 a year so i think look look at the groceries look what happens with with cars uh you see it everywhere price going up look what happens with stocks and real estate prices they go up over 10 15 every year so that’s what i call super inflation so how does the fed what what what options do you think they’re looking at what tools they obviously now realize it’s out of control how do they stop it well you know i’m the author of the big reset i wrote that in 2014 and my core thesis is we need to find a new anchor for wells financial system because we’ll have a dollar crisis as well we haven’t even mentioned that um we need that restructurings but we i also said we need a gold revaluation because that’s the trick the central bankers still have um available that’s that that’s that’s the card they still have in that in that sleeve and they use that before they used it in the 1930s so all central banks in the world still own gold they still have gold on the balance sheets so when you revalue gold you can reset your balance sheet for center banks and that’s why central banks will never use bitcoin because bitcoin they don’t own bitcoin there’s no use for central banks to start using bitcoin but there is a use to start using gold again and by adding gold to the official to to reinstate the connection between fiat money and gold they can bring trust back into the system and that will that that’s what they will do in the end and that’s why i’m not afraid of hyperinflation because central bankers know what to do next to avoid hyperinflation they don’t know what to do with super inflation i think they hope to create normal inflation you know three four percent but now because we came from an era of deflation we had this deflation problem actually for decades so they tried to um to increase um the inflation that’s what they also communicated but you know it’s very hard to try to increase the inflation a little bit because there’s a big risk that you will overshoot it happened in the 70s and once you start to overshoot and people start to panic or rich investors the high net worth start to be concerned and they start to buy everything the government can’t print then it’s very hard to bring inflation and control again one more example one more example it’s very telling i i saw an interview with a an american businessman who was uh producing lots of pizzas you know a whole chain of pizza pizza restaurants he told the journalists he’s buying 200 different ingredients for his pizza check 200 different the prices went up of all these ingredients between 30 and 200 percent in the last 12 months so that’s super inflation that’s not four percent that’s not 10 that’s 20 30 inflation for him we’re talking offline saying how the germans you know fully get and understand inflation what’s the biggest lesson that the u.s should learn or take from from germany well i think the u.s never experienced hyperinflation so that that’s a big risk because once a country has experienced hyperinflation let’s say in the last 100 years they’re very very concerned about that and that explains why the german bundesbank is always is always warning that’s why the bundesbank president i think is leaving now they understand the risk same goes for china we haven’t talked about that china had hyperinflation between 1946 and 1949 and that was exactly the time when we had the chinese revolution so the chinese communist party could take control over to mainland china because of the hyperinflation because of the chaos and and the ruler at that time chiang kai check he fled to taiwan and took the gold with him so that explains why china wants to take control again of taiwan as well because that used to be part that and and china understands hyperinflation germany understands hyperinflation the risk you know is the worst which can happen to you as a country society will break down and the u.s never experienced this and and uh things we were in control of the world reserve currency uh there’s no problem we can we can we can uh finance ourselves it definitely feels that way it feels that way and willem don’t you think that china obviously is looking at the u.s they’re preparing are they not going to use this as a peg to advance you know that my book was was translated into chinese i’ve been to china quite a bit it it became very clear to me that the chinese understand the american monetary situation very well they studied world’s financial system very well um i think china understands that the us is in decline and they’re on the rise and i was talking to you about 1949 because that was the start of the um well of communist china you know when they took over control uh and i always hear that for for the chinese you know they are working towards 2049 because that’s that’s the 100 year anniversary of their revolution so they they’re building their power and their influence in the world for the for long term they don’t want to take over the position of the dollar in the next five to ten years they’re looking a few decades ahead and they know the u.s is in decline let’s talk about all those phone calls we mentioned at the beginning that you’re getting uh people wanting to escape the banking system i’ve spoken about it in past interviews this is a trend that i’m seeing more and more uh loss of trust in the banking system and loss of trust in the dollar in fiat yeah yeah people want weight ways out now with the talk of inflation obviously this debate of whether gold is the ultimate inflation hedge has been reignited with people on both sides saying gold has failed as an inflation hedge over over the years while they’re saying no it is the ultimate where do you fit well of course gold has this history of over well over two three thousand years and if you study history gold always kept its purchasing power there’s no debasement of gold and of course you have cycles and you can buy gold at the wrong time and then you go down 40 but if you look on a longer term you’ll never lose your purchasing power with physical gold that has never happened before and what we know from gold gold is being revalued uh once in a while but it can take a few decades we had such a period in the 1930s we had such a reflection a reevaluation period in the 1970s we had one between 2000 and 2010 and i think we had a mid-cycle correction in the last few years and now gold will restart his reevaluation process but we might wake up one day that central bankers choose to re-value gold to a much higher level because that that assad that can help the balance sheet but if you compare gold to bitcoin and i’ve been uh calling the bitcoin digital gold since 2014 i was stupid enough not to buy bitcoin i only started in 2018 but i prefer bitcoin next to gold uh because bitcoin is the fastest horse in the race it’s a new horse it’s a young wars it can run faster but but but it shouldn’t be a a a fight between gold and bitcoin it should be a fight between bitcoin and fiat right like they’re spreading the same fight you’re saying gold and black yeah they’re friends they’re neighbors nephews different way to look at it interesting because you know the argument i hear is yeah gold may have worked in this 1970s as an inflation edge that was great but um the the the bitcoin is that hedge today no but look with gold gold is up over 30 since last year gold was trading 300 20 years ago when i started to invest in gold so you keep your purchasing power so gold is like an insurance for you for your net worth but with bitcoin you become can become rich and all i was in the south of spain last week visiting some real rich investors wearing our friends and wanted to meet me and play golf it was very nice but these guys these guys all have too much money and too much time and they’re over over 60 and 70. none of them is in bitcoin they don’t understand it but they don’t need to because they they became rich by investing in companies in real estate but the younger generation the younger generation this it’s the younger generation can only become rich by investing in something like crypto now which the old guys don’t understand so it it it’s it’s very um it’s very obvious why do you that’s an interesting and by the way i like how you said too much money too much time isn’t that a nice problem to have why why is there this philosophy especially amongst the young that they see crypto as the only or meme stocks as the only way to get rich today is it because the corporate ladder philosophy is out the door that cost of living is too high that you can’t just have a nine to five job to become wealthy anymore i think there’s a certain wisdom among the younger generation they don’t understand it themselves but they they feel it’s the next big thing and we or i should speak for myself because you’re much younger but but our generation of boomers we don’t feel it we have to study it somebody has to explain it to us and then we might try and step in a little bit but the younger generation they feel it naturally you know it’s the sign of the times it’s the the side guys like the germans say it you know they feel it it’s it’s you have the fourth turning every 20 years you have this new generation which have different beliefs yeah and which have different ideas and we saw this in the 60s with the flower power so it’s a new generation and they feel this is the right way so so to that point willem um you know for yourself you know obviously you you have embraced the cryptos you are someone from the gold realm but it was hard it was hard it was hard but you got there you got there um is it just bitcoin for you i mean you know we hear the chatter or you got to look at shibuya that’s the next one cardano’s the next one how do you break it down are you open to the other cryptos what’s your i wire 250 000 u.s dollars for an investment in a very um unique fund which is fully dedicated to d5 decentralized finance which is connected to the most important venture capital funds in the us who invest in in the platforms which will be very disruptive to financial systems can you name it no i i won’t name it because right but but we saw this this we saw this huge changes you know with uber and airbnb and they changed it they changed a lot of things in very old business models and when you look at the financial industry the way we settle and clear stock trades it takes three days if you want to transfer money internationally it takes three days so you’ve got these bright guys now building platforms and they say hey wait guys look it can be done much smarter we’ll use blockchain we’ll we’ll use smarter systems and that’s what we call d5 decentralized finance and i think this will be huge because the financial system still operates like 100 years ago the plumbing system of the financial system like the clearing for stock trades it it’s it’s you have to wait three days okay and fair enough i won’t keep pestering you about what you invested in but uh because the folks at home our audience is equally mixed crypto and uh mining precious metals we mentioned the miners before uh you say there’s still a lot of value there to be found any um insights okay because obviously there’s so many companies just like the crypto world there’s so many companies you can choose so what are the top three things someone should be looking at that’s key for you what are the metrics that you need to evaluate to know hey this one has potential we focus on small companies being responsible for large discoveries so if you make a copper discovery now or a nickel discovery you will do well and we love to invest in companies who don’t produce the metal because if you produce the metal at the end of the year you have less ounces in the ground left than in the starter at the start of the year if you invest in an expiration company who’s drilling and finding more at the end of the year you’ll own more ounces in the ground than at the start of the year and you like the royalties i assume yeah that’s that’s what we have as the safe part in our portfolio because the valuations are a little bit higher if you look at franco nevada and the royal gold but but they tend to be very safe because the institutions like the pension funds if they want to enter this mining industry they almost only can buy the major producers and the royalty companies and the royalty companies have such a wonderful business model and that’s why they are loved by institutional investors but their their valuation is quite rich sometimes the evaluation can be compared to to the to the cheaper tech companies but if you if you go to the smaller ones like sandstorm the valuation of sandstorm is half the valuation of franco nevada i want to bring it home with this so for the folks at home who are looking at their bank accounts looking at the fiat system getting worried right if they’re considering moving their assets outside of the bank you know what it what what discussions should they be having with themselves how do you know if you’re ready to make that move because it can be scary right we’ve been accustomed to the banking system our whole lives like what do you mean you don’t have money in the bank right it’s a it’s it’s it’s a scary shift well from a legal perspective cash in the bank you have a claim on the bank so from a legal position cash in the bank is risky especially when we’ll get bill ins if if we get a next crisis and the financial system has to be uh well refinanced you could have billions like we’ve seen in cyprus and everything over 100k you know it could be gone so i always advise people take money out of the system and invest it in things which are safe if you invest money in real estate the money is out of the system the financial system but it’s in a very tangible very very safe asset um you can also take money out of the system by buying physical gold or silver storing it in privately owned vaults i started a company like that myself in 2008. but you can also buy bitcoin and bitcoin um you can take your bitcoin offline and put it in cold storage so then your money is also out the normal structures but there can be a risk because i expect more financial repression from the governments i think the government one day might choose to close the on off ramps to crypto to bitcoin because there will be a huge fight between bitcoin and the fiat system especially once they rule out the central bank digital currencies and so don’t put all your eggs into one crypto basket but i always have this model it’s 25 real estate 25 in stocks 25 in physical gold and silver and then 25 there used to be cash but now i put that in bitcoin and i agree with you on that diversification front it’s just that bitcoin maximalist would argue well why would you own aol if you could just own amazon yeah but but when you get greedy and put all your eggs in one basket you know if you study history what were the worst mistakes people getting becoming greedy putting all the eggs in one basket and the basket then fell good good thoughts and always a fantastic conversation with you willem come back any time i appreciate it thank you so much and thank you for tuning in to stansberry research we’ll have much more coming your way that’s it for me thanks for watching [Music] you

Follow Me
Latest posts by Robson Grant (see all)

Leave a Comment