Episode #58: Understanding The SVB & Signature Bank Collapse W/Kelsey Williams

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I know what you're thinking
Dave.

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I've just heard way too much of
you, I understand, but this was

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pretty important stuff and I
wanted to get it covered and

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turned around really quick.
So let me paint you a picture

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early Friday morning, me and my
family.

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We get up, we load the car and
we head off to where our

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Church's headquarters in Temple.
Is the beautiful thing about

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that place is I get very little
cell coverage out there so I can

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just unplug and visit with
friends and I attended the

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temple.
And then I attended the church

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on Sunday morning and then about
2:00 Sunday afternoon.

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We start to drive home, and I
was just thinking to myself,

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man, life is good.
I didn't have to answer the

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phone once I didn't look at the
news.

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And then I got about 40 miles
from home, in my phone began to

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blow up with the news.
That two Banks had collapsed

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over the weekend.
Now, if you listen to this

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podcast for a while, you know,
I've had some very real concerns

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about the economy in the
direction.

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It was headed.
And the fact that these two

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Banks collapsed only serve to
tell me that those fears were

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very well.
Founded.

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So as normal, whenever I have
questions about the economy, I

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call Kelsey Williams him and I
had a conversation about these

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Bank collapses, and what, they
really mean, stick around for

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some unfiltered information on
the economy that you're not

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going to get very many other
places from a guy way smarter

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than me on this impromptu
episode of the Mormon Renegade

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podcast.
So I want to take just a few

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moments here and just say, thank
you for listening.

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I can never tell you how much it
means to me that you spend your

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time here with me.
Now, on top of that.

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Last year, I received donations,
that help me upgrade the audio

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equipment and software.
This year, I want to do the same

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thing for video.
Now, if you want to help out and

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make a donation, you can do that
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They're also check out the

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It's not like it's been a banner

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more video, there's a YouTube
channel up for the podcast but

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just between you and me.
Yeah, I'm gonna be there very

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long.
So I have a feeling on my kicked

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off.
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that.
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Thank you.
Been very careful on this

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podcast to only advertise for
items that I feel will add value

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and purpose in your life.
That said, I've discovered a

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book that I really believe
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Library.
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sheep's clothing.
In this book, the author Julie

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our churches, the book backs up
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This book will allow you to see

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In America, Julie is right now,

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trying to raise money to make
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So head over to Mormon
Renegade.com and you can find

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the link to buy the book and
donate to the documentary in

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this episode page or scroll down
to the very bottom of the

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landing page at Mormon,
Renegade.com, to find a link to

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buy the book.
You're listening to the Mormon

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Renegade podcast.
Kelsie, Kelsie, Kelsie, Kelsie,

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Kelsie, do you remember you
remember three weeks ago we had

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that conversation where and this
was off are for everybody

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listening.
But we actually had a

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conversation where we were like,
well maybe, maybe the laws of

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economy do, stop the US,
borders, and then all of a

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sudden it was it was on it was
game on.

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Um I was coming home from from
Nevada.

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And I didn't get cell coverage
all weekend long and it was so

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nice.
Right just unplug just you know

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kind of reset spiritually.
And I'm probably I don't know 30

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45 miles from home and all of a
sudden my phone just starts

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blowing up and I start looking
through my phone and I'm like,

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oh crap icq Banks had failed in
just over the weekend and I'm

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like, well, I guess it's time I
give Kelsey a call.

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So for whoever is listening, it
is right now, Seven Ten in the

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evening on Monday, Kelsey.
And I wanted to jump on and get

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this episode done and out.
I plan on on releasing this

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either tonight or first thing in
the morning.

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But we wanted to get this out
there for everybody because The

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on this podcast I think we've
done what three or four together

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kill.
See, where we've been coming to

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our fourth one, I think.
Yeah, so so we've done three

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prior to this, where we've been
ringing the bell that

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something's not right?
And and I think that this is the

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first in a set of I don't want
to be too hyperbolic here but I

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truly believe this cataclysmic
events within the economy.

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I think that's true.
I think there's a, there's a

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hesitation by most people to use
a term like that because they're

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afraid of maybe spooking
something or and part of it that

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idea of avoiding.
Something that's distasteful but

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don't let's not talk about it.
Maybe the problem will go away.

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It really is kind of like a
dysfunctional family, right?

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Like if we just don't talk about
it maybe it goes away.

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And I've heard I've heard of
people getting in trouble for

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quote talking down the economy.
Right.

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Yeah.
And so I understand entirely

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that these are not necessarily
happy fun subjects but I I

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believe those that know, there's
a responsibility to ring that

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Bell and let people know not
things aren't right?

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And so I appreciate you have had
I appreciate you coming on so we

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can talk about it but let's just
matter being realistic, you

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know, we're not.
Nobody's trying to talk anything

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down as much as they are.
Say, wait.

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There are some problems here and
you need to be aware of Them.

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Otherwise you will be surprised
and it won't be pleasant when it

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happens.
Yeah.

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And Kelsey, to be honest with
you, I've gotten a few emails

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where they say.
Why are you talking about the

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economy?
It's not really your thing.

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Well, one, it's my podcast, and
I'm kind of interested in the

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economy, so that's one.
But the other thing is, is if I

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feel something's wrong, and I
have this platform, and I don't

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say something and then people
suffer down the road.

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I'm not sure.
I Live with myself.

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And so that's part of the reason
I do these episodes.

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I think what you said is
perfectly appropriate and you

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know I've got a good friend in
California who is an attorney

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and he says to me, that's his
term.

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He tells me, I think you ought
to write an article about such

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and such and he said I do it but
I don't have the platform.

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You have. all right, said, you
know this is the way it is or

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something is needs to be said,
so Go say it.

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Yeah.
So that's all it is.

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All right.
So let's let's dive in here.

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What happened on Friday?
Okay, there were actually three

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bank failure since the middle of
last week 33.

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I thought it was just too over
the weekend, there's a firm

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Silver Gate which is associated
with the crypto sector and it

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was Fallout from FTX, you know,
and all of that.

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And so then Silicon Valley Bank
SES VB people call.

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It was announced, and then over
the weekend, another bank with

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Signature Bank in New York.
Which now the thing about these

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is the Silver Gate and Signature
Bank Both associated with

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crypto, digital currencies.
So, that was definitely a factor

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was Fallout from that, the
Silicon Valley Bank, you have

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the technology-based companies
and Venture capitalists big

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Venture capitalists.
So that, you know, the type of

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customer the Investments,
everything, those are factors

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here, but there's two main
factors as far as it has, SV B

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and all banks are concerned.
And that was definitely a parent

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in.
What happened with Silicon

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Valley Bank, one is the
fractional Reserve banking

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system and the other is interest
rates.

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Those are the two key things
that happen.

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Now, they they close the bag.
They made arrangements to work

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directly since they haven't
found a Someone to buy the

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assets and take over things yet.
They have made the depositors

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whole share owners and
bondholders their out.

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Okay.
So and that's the way it should

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be.
It's, you know, there's

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arguments well.
Well, is it a bailout?

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Or is it not the FDIC handled it
correctly to a certain extent?

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What happened is, Is they did go
beyond the 250 thousand dollar

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limit, you know, the insurance
limit for depositors and made

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all depositors full.
But, you know, part of that too

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is you have to look at the size
of the bank and there's a,

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there's a phrase that's used
when you're talking about owing

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money, if you owe a bank, a
million dollars, They own you,

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but if you will a bank, a
hundred million dollars, you own

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the bank.
So the size of this Bank, It's a

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big factor because the amounts
of money involved in terms of

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how do you handle it to contain
the damage as much as possible?

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so, When you say, shut down the
bank, you mean, like people

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weren't able to go to the ATM
and pull funds out.

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Correct?
Exactly.

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As you see, what happened is
they reached the point where

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they had no money.
And here's why.

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And this, this is the first
part, I guess about two part

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thing that would people need to
understand if we can want to

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understand, how does the bank
get to this position?

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What actually happens, we can
talk more about it later but

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simply put put when you put when
you deposit money in a bank, And

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let's just call it say ten
thousand dollars.

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The bank at the end of the day,
balances their total takes a

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total on their deposit of that
total on their deposits.

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They are required by Federal
Regulation.

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It's Federal Reserve regulation,
right T, to maintain, 10% of

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those deposits on hand.
In the event, and of people want

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their money quickly, the other
90%, they're allowed to lend

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out.
Now, that practice is we go a

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fractional.
Reserve banking is the is the

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way the banks operate.
The reserve requirement varies

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from time to time, but it's been
ten percent for quite a while

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and I don't see that changing
tactically.

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What that means is if a bank
Falls below that 10% Reserve

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ratio are in violation, They,
you know, the, The Regulators

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would see that as a problem
there, they would call them

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insolvent.
I would say they're insolvent in

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any way because they don't have
enough money.

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And can you get it if everyone
wants or too many people want

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their money at one time?
It's simply not there.

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All right.
Now what happened is you had

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depositors associated with
high-tech.

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And crypto and other things, but
for whatever reason they needed

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to pull money out, okay?
Whether they, whatever it was

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the either, they were having
issues, they wanted money when

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they went to draw their money
out.

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The bank, of course, complies
with that.

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Until you reach the point where
he's you've exhausted your

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reserves because once you do
that you're bankrupt, you don't

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have more money.
What happened is that in order

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to satisfy the depositors
demands to draw their money out.

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00:14:40,800 --> 00:14:46,000
The bank also had to sell bonds
that they held in their

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portfolio of reserves.
In other words, they had huge

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amounts of cash is part of the
Reserves.

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00:14:52,800 --> 00:14:56,000
So they put it to work, they
would normally own treasury

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bonds but they also a couple
years ago bought a lot of

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mortgage-backed Securities.
Well, interest rates have been

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going up and when interest rates
go up the value of bonds

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declines and we'll talk about
that later.

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00:15:12,600 --> 00:15:17,900
But what they're doing is they
were forced into selling assets,

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on the books or money that bonds
that They had at losses.

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Mmm, so it's a combination of
Paying their the people they

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owed as well as selling assets
at like fire-sale prices in

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00:15:38,400 --> 00:15:42,300
order to pay them off.
So this is the combination of

226
00:15:42,300 --> 00:15:45,200
two things.
Those who that's what put them

227
00:15:45,200 --> 00:15:49,200
in the position of not being
able to give any more money back

228
00:15:49,800 --> 00:15:52,600
where they be, technically
consider bankrupt.

229
00:15:53,300 --> 00:15:57,300
So, they, they've been operating
like this for quite a while,

230
00:15:57,300 --> 00:15:59,300
right?
I mean, this is nothing, new

231
00:15:59,700 --> 00:16:03,500
well, so all the eggs operate
under the same system, right?

232
00:16:03,500 --> 00:16:09,500
We can argue that.
And so in that sense we can talk

233
00:16:09,500 --> 00:16:13,900
about Reckless Behavior, but
sometimes it goes beyond that,

234
00:16:13,900 --> 00:16:18,500
sometimes a bank will do
something with its reserves.

235
00:16:18,900 --> 00:16:25,200
That is reckless, right?
Okay, or they will make loans

236
00:16:25,900 --> 00:16:28,900
that, you know, see, like I
would say, okay, what's Reckless

237
00:16:28,900 --> 00:16:34,800
Behavior?
How about 3% interest only

238
00:16:34,800 --> 00:16:39,800
mortgage to a night clerk at a
7-Eleven convenience?

239
00:16:39,900 --> 00:16:44,800
Store, who's never owned a home
and makes minimum wage.

240
00:16:45,500 --> 00:16:47,800
Right.
Okay, you know, where's the

241
00:16:47,800 --> 00:16:53,100
qualifications financially
simply weren't there, so, and it

242
00:16:53,100 --> 00:16:56,300
doesn't have to be that.
So you, if you remember the what

243
00:16:56,300 --> 00:17:00,900
happens, you had auto loans, you
had student loans, you have

244
00:17:00,900 --> 00:17:03,900
mortgages all these things came
into question.

245
00:17:04,200 --> 00:17:10,099
Well, that could cause problems
for the banks that continue Tip

246
00:17:10,099 --> 00:17:12,300
the scales.
If you're only dealing with

247
00:17:13,000 --> 00:17:17,200
operating on a 10 percent
Reserve, requirement doesn't

248
00:17:17,200 --> 00:17:21,500
take much to wipe that out.
What would cut?

249
00:17:21,500 --> 00:17:27,099
What was the initial Catalyst to
cause enough people to go to the

250
00:17:27,099 --> 00:17:29,100
bank and say, you know what?
Give me your money.

251
00:17:29,100 --> 00:17:33,300
Give me my mom know that I
believe, don't know, yet per se.

252
00:17:33,400 --> 00:17:39,300
I'm assuming part of this is
when a bank you, you know, some

253
00:17:39,300 --> 00:17:43,100
of these people People probably
were on both sides of it.

254
00:17:43,300 --> 00:17:47,500
Some of them may have been
banking with them.

255
00:17:47,800 --> 00:17:53,300
Others may have been lender
borrowing from them and they may

256
00:17:53,300 --> 00:17:57,800
have been both, and they may
also know because quite frankly

257
00:17:57,800 --> 00:18:01,100
was what's happening.
The credit markets are in

258
00:18:01,100 --> 00:18:03,700
disarray.
It's very difficult.

259
00:18:03,700 --> 00:18:10,800
You know what this does is it
stamping down liquidity. so if

260
00:18:10,800 --> 00:18:15,500
you have to depend on the debt
markets for your funding, it's

261
00:18:15,500 --> 00:18:20,800
more expensive all the time and
it's harder to get Not you.

262
00:18:20,900 --> 00:18:23,500
So there's any number of
possibilities.

263
00:18:23,500 --> 00:18:27,300
Now, let's just take it, take
it, you know, a little another

264
00:18:27,300 --> 00:18:32,700
step further.
If they were, if the depositors

265
00:18:32,700 --> 00:18:37,800
had problems of their own that
combined, with the fact that

266
00:18:39,400 --> 00:18:44,200
assets of the bank are declining
is like, hey, you know what can

267
00:18:44,200 --> 00:18:47,200
we do?
There's nothing else you can do.

268
00:18:47,400 --> 00:18:51,200
If enough people are unemployed
and have to take their savings

269
00:18:51,200 --> 00:18:57,100
out to pay bills if too many
people, for whatever reason have

270
00:18:57,100 --> 00:18:59,100
to get their money out from a
bank.

271
00:18:59,300 --> 00:19:02,500
It's a problem.
So then you have the ripple

272
00:19:02,500 --> 00:19:07,800
effect gives you SV B SV.
B Bank was a second.

273
00:19:07,800 --> 00:19:12,700
Largest bank failure in history.
Next to the washing Mutual

274
00:19:12,700 --> 00:19:22,300
Savings Bank in 2008. so, that
size has implications, If you

275
00:19:22,300 --> 00:19:26,400
can't get your money, how do you
pay your bills and what happens

276
00:19:26,400 --> 00:19:29,300
to the people you owe money to
right?

277
00:19:29,600 --> 00:19:33,500
You know, so people that are
depending on these things in

278
00:19:33,500 --> 00:19:37,900
various ways.
Sort of up a creek without a

279
00:19:37,908 --> 00:19:43,000
paddle.
So there is a ripple effect and

280
00:19:43,000 --> 00:19:49,400
how far that extends depends on
how limited the exposure was,

281
00:19:49,400 --> 00:19:52,600
but the size of the bank tells
you it's much bigger than that

282
00:19:52,800 --> 00:19:57,700
and with the attitude of
investors today and the

283
00:19:57,700 --> 00:20:04,300
overemphasis I say that only to
emphasize how far beyond

284
00:20:06,800 --> 00:20:10,600
Historically normal patterns,
we've gone in terms of

285
00:20:10,600 --> 00:20:14,200
assessing, any type of
investment that.

286
00:20:14,300 --> 00:20:18,000
The next big thing is always
what's on the minds of lips of

287
00:20:18,100 --> 00:20:22,100
every investor.
So the more risky we don't think

288
00:20:22,100 --> 00:20:24,600
they don't think about it.
Can I get the money?

289
00:20:24,800 --> 00:20:28,600
How cheaply?
Boom, and the economy functions

290
00:20:28,600 --> 00:20:31,100
on credit.
So anything that calls that into

291
00:20:31,100 --> 00:20:33,100
question is going to be a
problem.

292
00:20:33,900 --> 00:20:38,000
Okay, it's a big thing.
It's a really big thing in.

293
00:20:38,000 --> 00:20:39,800
Can they contain it?
I don't know.

294
00:20:40,300 --> 00:20:44,300
And what's interesting is, I
still don't feel like it's

295
00:20:44,300 --> 00:20:47,300
getting the amount of coverage
that it really deserves.

296
00:20:47,600 --> 00:20:52,200
They don't want to write what
that their, their whole thing

297
00:20:52,200 --> 00:20:55,000
that back.
I believe they are definitely

298
00:20:55,000 --> 00:21:00,700
hoping that back.
So, so they Look, we know that

299
00:21:00,700 --> 00:21:03,100
they like to play word games up
there in the FED.

300
00:21:03,400 --> 00:21:08,000
We know that they like to
position everything like

301
00:21:08,000 --> 00:21:09,100
everything's.
Alright.

302
00:21:09,100 --> 00:21:12,400
But this was a bailout right
despite what they want to call

303
00:21:12,400 --> 00:21:18,500
it.
I would say yes but if the

304
00:21:18,500 --> 00:21:25,400
bailout portion applies more to
the fact that they Made

305
00:21:25,400 --> 00:21:30,100
depositors whole, who had money
there in excess of 250 thousand,

306
00:21:30,300 --> 00:21:33,400
which was probably a goodly
portion of the deposits.

307
00:21:34,000 --> 00:21:40,300
So, in that sense, yes, because
the FDIC of the ones that took

308
00:21:40,300 --> 00:21:44,400
it over and they should have
only made whole those for

309
00:21:44,400 --> 00:21:48,500
250,000.
And the next thing is that would

310
00:21:48,500 --> 00:21:52,900
have taken months if it was done
that way they made everybody

311
00:21:52,900 --> 00:21:56,200
hole, As of today, that's what
the announcement was.

312
00:21:56,600 --> 00:22:01,500
So otherwise they would not have
gotten their money back and they

313
00:22:01,500 --> 00:22:05,200
would have continued to look for
a Suitor.

314
00:22:05,400 --> 00:22:07,800
Somebody to come in and take it
over, do it.

315
00:22:08,000 --> 00:22:12,500
So if you even if you were under
the 250,000 limit you might have

316
00:22:12,500 --> 00:22:15,900
not gotten access to your money
at this point, you know.

317
00:22:15,900 --> 00:22:19,400
So that's when I you know you
could probably call Portobello.

318
00:22:19,800 --> 00:22:21,500
Let me ask you this question
real quick.

319
00:22:21,500 --> 00:22:23,500
Before we dive into those two
subjects.

320
00:22:23,500 --> 00:22:26,500
We We really want to cover
because it's the root of what's

321
00:22:26,500 --> 00:22:30,700
going on.
But I heard something today that

322
00:22:30,700 --> 00:22:33,600
there was a British bank that
had either bought them or were

323
00:22:33,600 --> 00:22:36,000
looking at buying them.
Have you heard anything on that?

324
00:22:36,000 --> 00:22:36,900
I have.
Not yet.

325
00:22:37,200 --> 00:22:38,400
I have not.
Okay.

326
00:22:38,700 --> 00:22:40,300
All right.
Good enough.

327
00:22:40,300 --> 00:22:43,300
As you can tell, it's still a
very fluid situation out there

328
00:22:43,300 --> 00:22:46,700
but regardless it's important
that we get on here and talk

329
00:22:46,700 --> 00:22:51,600
about this because I feel like
it's the first Domino.

330
00:22:52,600 --> 00:22:55,600
And I think that's quite
possible that we've been talking

331
00:22:55,600 --> 00:23:02,300
about that for several months.
We haven't had a real crises

332
00:23:03,100 --> 00:23:11,400
since pandemic and that was more
self-induced than anything.

333
00:23:11,400 --> 00:23:16,600
So, you know, going back to 2008
when things kind of imploded

334
00:23:16,600 --> 00:23:20,500
under their own weight and
that's kind of where we are.

335
00:23:20,600 --> 00:23:25,400
They built things back up to
Point where sustaining, it takes

336
00:23:25,400 --> 00:23:31,300
all their efforts justices.
So I'm sorry.

337
00:23:31,300 --> 00:23:34,900
I keep saying this one last
question, before we dive in, I'm

338
00:23:34,900 --> 00:23:39,600
curious because they've made the
discount window really easily to

339
00:23:39,600 --> 00:23:43,000
get to, right?
And they've taken a bunch of

340
00:23:43,000 --> 00:23:48,300
limitations Off of borrowing
from from the discount window.

341
00:23:49,700 --> 00:23:53,100
Why didn't why didn't that bank?
Just go to the discount window.

342
00:23:54,800 --> 00:23:59,300
The problem is, with the
discount window, is that

343
00:23:59,300 --> 00:24:03,400
supposed to help in marginal
situations?

344
00:24:03,400 --> 00:24:06,600
Okay?
Not, it's not supposed to be a

345
00:24:06,600 --> 00:24:11,600
case of look, we're going under
give us a bunch of money because

346
00:24:11,600 --> 00:24:16,200
that's that's the whole reason
for the FDIC and, and the

347
00:24:16,200 --> 00:24:21,000
regulators and The Fad.
Once you reach that point and

348
00:24:21,000 --> 00:24:26,500
part, the other reason is
there's a there's a hesitancy or

349
00:24:26,500 --> 00:24:31,800
has been in packed in the past
for banks to go to the discount

350
00:24:31,800 --> 00:24:35,300
window because as soon as they
go to the discount window, the

351
00:24:35,300 --> 00:24:40,300
FED knows they need money.
For the to meet their reserve

352
00:24:40,300 --> 00:24:43,100
requirement.
That's that's why there is a

353
00:24:43,100 --> 00:24:49,300
overnight Market fed funds.
That Banks, you know, borrow and

354
00:24:49,300 --> 00:24:51,400
lend from each other, on an
overnight basis.

355
00:24:51,400 --> 00:24:55,500
And, and the discount rate you
can do the same thing, but you

356
00:24:55,500 --> 00:24:58,500
go directly to the FED but then
the FED realizes.

357
00:24:58,500 --> 00:25:05,000
Oh, if you're borrowing from us,
we see that they may, it may you

358
00:25:05,000 --> 00:25:06,600
know, they're afraid.
It's like well we don't want to

359
00:25:06,600 --> 00:25:09,700
show our hand or we don't.
Want them to know too soon, and

360
00:25:09,700 --> 00:25:12,600
maybe it's not that big of a
problem, but then the FED starts

361
00:25:12,600 --> 00:25:16,000
watching a little more closely.
The other hand, the FED wanted

362
00:25:16,000 --> 00:25:21,600
to find a way to use the
discount window to better

363
00:25:22,200 --> 00:25:26,100
facilitate their own efforts to
encourage Banks to lend more

364
00:25:26,100 --> 00:25:29,700
money and to not keep reserves
on hand.

365
00:25:30,000 --> 00:25:35,400
And so they made it easier to
borrow from the window.

366
00:25:36,300 --> 00:25:43,200
Directly.
And they also stopped paying the

367
00:25:43,200 --> 00:25:48,100
kind of rates that they were
paying that would cause someone

368
00:25:48,100 --> 00:25:51,000
to Simply say, well, I'm not a
member banks.

369
00:25:51,000 --> 00:25:54,300
A, I'll just leave my funds on
deposit with you.

370
00:25:54,300 --> 00:25:58,900
I'll create excess reserves, you
know, if you don't lend it all

371
00:25:58,900 --> 00:26:03,500
out to the, to the temperature,
down to the ten percent ratio.

372
00:26:03,900 --> 00:26:08,000
Anything else above 10% is
Littered excess reserves and

373
00:26:08,000 --> 00:26:11,200
that could be on deposit with
the fed, you know, they have

374
00:26:11,200 --> 00:26:14,300
accounts there.
So it's more, it was more a

375
00:26:14,308 --> 00:26:18,600
matter of not wanting the FED to
see directly what they were

376
00:26:18,600 --> 00:26:21,200
doing.
But I think we've reached a

377
00:26:21,200 --> 00:26:27,500
point now where everybody's
aware of that and if it's an

378
00:26:27,500 --> 00:26:32,000
attractive enough rate and the
bank's feel good enough about

379
00:26:32,000 --> 00:26:35,900
it, they're going to borrow from
them whatever because they can.

380
00:26:36,000 --> 00:26:39,700
Borrow that, it doesn't have to
be just to me reserve

381
00:26:39,700 --> 00:26:42,700
requirements.
Did.

382
00:26:44,600 --> 00:26:47,600
I thought the regulator's job I
thought this was part of the

383
00:26:47,600 --> 00:26:51,400
promise of the FED, right?
Is that they were going to step

384
00:26:51,400 --> 00:26:53,600
in and make sure stuff like this
doesn't happen.

385
00:26:53,900 --> 00:26:57,100
We have Regulators.
How did they manage to fly under

386
00:26:57,100 --> 00:27:00,600
the radar and such carrier's
position for so long?

387
00:27:00,800 --> 00:27:03,600
Because I can't imagine that one
day.

388
00:27:03,600 --> 00:27:05,800
They were fine.
The next day they were broke,

389
00:27:05,800 --> 00:27:08,900
right.
I mean, there's settle steps in

390
00:27:08,900 --> 00:27:20,000
between, again, I think this is
Out of the bank's, create an

391
00:27:20,000 --> 00:27:25,200
appearance doing very well, if
they are doing well, it's easy

392
00:27:25,400 --> 00:27:32,000
to present that aura.
Even if things start to turn, At

393
00:27:32,000 --> 00:27:36,800
this point, I think it's more a
factor that the longer the FED

394
00:27:36,800 --> 00:27:40,100
continued to raise rates.
The sooner there was going to be

395
00:27:40,100 --> 00:27:45,100
a problem because it's just a
function of the fact that you're

396
00:27:45,600 --> 00:27:53,400
marking down assets continually
because Bond Holdings, you know

397
00:27:53,400 --> 00:27:56,500
are affected directly.
So the higher interest rates

398
00:27:57,000 --> 00:28:01,200
drives, you know the value of
the bonds is declining and As

399
00:28:01,200 --> 00:28:06,100
that happens.
It makes everybody more

400
00:28:06,100 --> 00:28:08,400
vulnerable regardless of the
situation.

401
00:28:08,700 --> 00:28:12,000
You're if your Investments are
continually going down and you

402
00:28:12,000 --> 00:28:16,700
depend on those Investments for
collateral or or if you need to

403
00:28:16,700 --> 00:28:20,000
sell something and you're forced
to sell it at a loss that you

404
00:28:20,000 --> 00:28:24,500
hadn't expected to, I mean, you
know, you can't account for that

405
00:28:24,500 --> 00:28:30,600
until it happens, you know, it's
you can expect it, but sooner or

406
00:28:30,608 --> 00:28:34,800
later you realize, okay, I just
Have any money.

407
00:28:34,800 --> 00:28:36,600
But I didn't want to tell you
because I thought so.

408
00:28:36,700 --> 00:28:39,900
And you to see the way everybody
is, they're all they're betting

409
00:28:39,900 --> 00:28:42,900
that the FED is going to change.
You know, this fed pivot thing.

410
00:28:42,900 --> 00:28:46,800
Federal Reserve reverse do make,
they will not do this, they'll

411
00:28:46,800 --> 00:28:54,800
do this and and so nobody really
thinks they know what's and are

412
00:28:54,800 --> 00:28:59,700
they think they know but they
don't, you know and it's really

413
00:29:01,200 --> 00:29:06,800
It's a circus and it never
really ends because everybody's

414
00:29:06,800 --> 00:29:11,100
playing a game, right?
The feds trying to keep the

415
00:29:11,100 --> 00:29:15,900
system together and the banks
are trying to milk the system

416
00:29:16,900 --> 00:29:24,300
and stills the FED really.
I mean, you know, there they

417
00:29:24,300 --> 00:29:27,600
can't control the effects of
their own inflation.

418
00:29:27,600 --> 00:29:32,000
We've reached a point where
We're vulnerable, you keep

419
00:29:32,000 --> 00:29:36,000
blowing up a balloon, a little
bit at a time, the structure and

420
00:29:36,000 --> 00:29:38,100
the skin becomes more
vulnerable.

421
00:29:38,700 --> 00:29:42,300
In great tip from the outside,
just a tiny bit.

422
00:29:42,800 --> 00:29:45,000
That little hole in the air
comes out of it.

423
00:29:45,600 --> 00:29:50,800
So you can keep blowing the air
in and eventually blow through

424
00:29:50,800 --> 00:29:54,300
it from the inside, the big
gaping hole.

425
00:29:54,400 --> 00:30:02,200
The point is at some point.
There is the piper to pay, you

426
00:30:02,200 --> 00:30:08,800
know, you can't get away from it
and the we're at a point now,

427
00:30:08,800 --> 00:30:12,600
where all of these things that
are happening, are probably

428
00:30:12,600 --> 00:30:16,800
going to have more of a
detrimental effect, initially

429
00:30:17,200 --> 00:30:20,700
than the FED had hoped for when
they started raising rates.

430
00:30:21,000 --> 00:30:27,400
So we have another new set of
variables, will they slow down?

431
00:30:27,400 --> 00:30:34,200
Will they stop?
Raising rates or will they try

432
00:30:34,200 --> 00:30:38,800
to bring them down again in
order to smooth things out and

433
00:30:38,800 --> 00:30:42,900
that has its own set of concerns
and problems?

434
00:30:42,900 --> 00:30:48,900
Because you've now got people
who are built into the

435
00:30:48,900 --> 00:30:54,100
expectation that rates are are
going to go higher and so it can

436
00:30:54,100 --> 00:31:01,500
have an impact that way, but the
other one is that They may go

437
00:31:01,500 --> 00:31:06,800
overboard trying to accommodate
a situation that looks like it's

438
00:31:06,800 --> 00:31:12,300
about to run out of control in
which case they may end up doing

439
00:31:12,300 --> 00:31:18,100
something to really damage the
dollar from this point because

440
00:31:18,100 --> 00:31:21,700
they would, you know, pull out
all the stops you know, the

441
00:31:21,700 --> 00:31:24,900
helicopter money Ben Bernanke
referred to as a real

442
00:31:24,900 --> 00:31:28,100
possibility.
It'll be in digital form but you

443
00:31:28,100 --> 00:31:30,300
can just imagine regular monthly
checks.

444
00:31:30,800 --> 00:31:34,500
Because it looks like we're
going into a depression and we

445
00:31:34,500 --> 00:31:38,600
got to save people and, you
know, and that would just they

446
00:31:38,600 --> 00:31:42,000
would be fighting the obvious.
And I think there's the

447
00:31:42,000 --> 00:31:45,700
potential that that tidal wave
of default and deflation would

448
00:31:45,700 --> 00:31:49,700
overwhelm whatever efforts, they
they can come up with but

449
00:31:49,700 --> 00:31:52,400
they're still going to try,
right?

450
00:31:54,900 --> 00:31:59,900
Who good times.
So let's get into the two

451
00:31:59,900 --> 00:32:01,800
things.
We really wanted to break down

452
00:32:01,800 --> 00:32:04,700
that that we felt were kind of
well let me rephrase that I'm

453
00:32:04,700 --> 00:32:08,400
not smart enough to feel or
think anything here, but let's

454
00:32:08,400 --> 00:32:12,200
let's call it.
You know what you felt were the

455
00:32:12,200 --> 00:32:16,000
two driving factors here.
The first one was bond, interest

456
00:32:16,000 --> 00:32:18,400
rates and we just covered a
little bit of that.

457
00:32:19,100 --> 00:32:22,100
And then the second is
fractional, Reserve banking.

458
00:32:24,700 --> 00:32:29,900
Yeah, I think this is where if
people understood these two

459
00:32:29,900 --> 00:32:34,300
issues, they would have a better
grasp of what they're reading

460
00:32:34,300 --> 00:32:39,500
and hearing that, a lot of the
other stuff is designed to take

461
00:32:39,500 --> 00:32:43,300
the attention away from these
particular issues, but the

462
00:32:43,300 --> 00:32:49,300
debate, the issues that affect
all banks, and not just Banks,

463
00:32:49,300 --> 00:32:52,500
but but definitely Banks because
of the reserve requirement.

464
00:32:53,300 --> 00:32:56,200
Bonds and interest rates.
You can see that structure

465
00:32:56,300 --> 00:32:59,400
anywhere once you understand
that, what's going on.

466
00:32:59,800 --> 00:33:05,300
So let's talk about bonds and
interest rates, whether you're a

467
00:33:05,300 --> 00:33:08,400
bank or not, we're just say
that.

468
00:33:09,500 --> 00:33:15,900
Dave, you want to buy a bond
corporate bonds treasury, bond

469
00:33:15,900 --> 00:33:20,600
doesn't matter.
You've decided you want one and

470
00:33:20,600 --> 00:33:24,400
you're willing to pay and
there's one at face value ten

471
00:33:24,400 --> 00:33:29,700
thousand dollars and it's paying
3% interest.

472
00:33:30,500 --> 00:33:36,500
All right, and great, I like
that, I'm going to buy it.

473
00:33:37,000 --> 00:33:40,300
And so now you've got a bond,
you paid 10,000, you're getting

474
00:33:40,300 --> 00:33:44,100
three percent interest, 300
dollars a year on your money.

475
00:33:45,800 --> 00:33:50,600
A year from now you find out.
Interest rates have gone up And

476
00:33:50,600 --> 00:33:56,700
we'll say that in the interim,
they've risen, 25 percent 50.

477
00:33:56,700 --> 00:34:02,900
I'm only getting three percent.
I'm gonna sell my bond and I'm

478
00:34:02,900 --> 00:34:08,400
going to buy one and get it 5%
from Okay, now if I want to buy

479
00:34:08,400 --> 00:34:13,800
a bond and I know interest rates
are five percent right now and

480
00:34:13,800 --> 00:34:16,699
you say, I've got a blind, I'll
sell you and I great, what's the

481
00:34:16,699 --> 00:34:19,500
interest rate?
And you to me three percent, I

482
00:34:19,500 --> 00:34:24,900
said, say your plan is to go,
buy a Vine and get 5% said,

483
00:34:24,900 --> 00:34:28,699
well, why would I give you
10,000 for your bond?

484
00:34:28,800 --> 00:34:34,100
That's only paying 3%, when
interest rates have risen to 5%

485
00:34:35,800 --> 00:34:40,300
Huh.
So what has to happen is that

486
00:34:40,300 --> 00:34:44,900
the price of that bond has to be
come down and it does as

487
00:34:44,900 --> 00:34:50,600
interest rates rise that bond
price drops, there is a

488
00:34:50,600 --> 00:34:56,199
correlation directly with
interest rates that bond has a

489
00:34:56,199 --> 00:34:59,400
price that when you want to sell
it.

490
00:35:00,200 --> 00:35:04,900
Is now less than you paid.
For maybe it's instead of

491
00:35:05,500 --> 00:35:10,900
10,000, you're going to be able
to sell it for 9,000, you've

492
00:35:10,900 --> 00:35:15,300
lost 10% of your money.
Now, if you hold it to maturity,

493
00:35:15,300 --> 00:35:17,900
whenever that is you still get
your money back.

494
00:35:18,200 --> 00:35:22,000
But in the meantime, you have a
market value that's adjusting

495
00:35:22,000 --> 00:35:27,500
always continuously to the
changes in interest rates.

496
00:35:27,900 --> 00:35:29,900
So, unless you're willing to
hold it to me.

497
00:35:30,100 --> 00:35:33,500
Already, you're going to have to
take a loss when you sell it.

498
00:35:34,100 --> 00:35:36,900
Now that's true, whether you're
just an investor ordinary

499
00:35:36,900 --> 00:35:41,900
investor, buying Bonds in, you
know, General Motors corporate

500
00:35:41,900 --> 00:35:44,500
bonds or, you know, it doesn't
matter.

501
00:35:44,600 --> 00:35:50,400
US Treasury bonds, any bond has
a fixed coupon an interest rate

502
00:35:51,200 --> 00:35:57,500
and it's always based on one
thousand dollar par value. so,

503
00:35:57,500 --> 00:36:03,800
if you own bonds, You have what
is called interest rate risk for

504
00:36:03,800 --> 00:36:07,700
your investment?
If rates go up the value of your

505
00:36:07,700 --> 00:36:13,100
bonds declines to meet eat the
actual interest rate change

506
00:36:13,200 --> 00:36:17,200
that's out there.
So what we're saying is at a

507
00:36:17,200 --> 00:36:22,800
cheaper price your bond is the
equivalent of earning the new 5%

508
00:36:22,800 --> 00:36:27,600
rate if I give you only 9,000 or
whatever that actual number,

509
00:36:27,600 --> 00:36:33,600
there's a formula that and And I
pay 9000, I'm getting three

510
00:36:33,600 --> 00:36:39,800
percent based on Ten Thousand so
the three percent on 10 as a

511
00:36:39,800 --> 00:36:44,000
percentage of my 9,000 works out
to be that higher interest rate,

512
00:36:44,100 --> 00:36:46,500
okay?
That's that's what is actually

513
00:36:46,500 --> 00:36:50,600
happening.
So, so there's always a risk, so

514
00:36:50,600 --> 00:36:54,400
that was happening.
If bonds treasury, bonds

515
00:36:54,700 --> 00:36:58,800
mortgage-backed Securities,
whatever it is as race continued

516
00:36:59,200 --> 00:37:01,500
to rise.
You got these bonds out there

517
00:37:01,900 --> 00:37:06,600
that are losing value and a bank
that's holding a bond.

518
00:37:06,600 --> 00:37:09,800
Portfolio, is watching those
assets decline.

519
00:37:11,500 --> 00:37:16,900
And they're declining.
So they SVD was forced into

520
00:37:16,900 --> 00:37:19,300
selling because they needed to
pay.

521
00:37:20,400 --> 00:37:24,400
Their depositors who wanted
their money, that's okay.

522
00:37:24,600 --> 00:37:28,500
So it would be like you saying,
okay, you come home, you tell

523
00:37:28,500 --> 00:37:35,700
your wife, I got laid off.
We've got money in the bank and

524
00:37:35,700 --> 00:37:38,800
we have some Investments and we
need to we'll sell them.

525
00:37:40,300 --> 00:37:42,300
And you get to the point where
you have to sell your

526
00:37:42,300 --> 00:37:45,300
Investments because you've got
to pay the bills.

527
00:37:46,800 --> 00:37:51,300
And what happens when you go?
Well, I've got that those Bonds

528
00:37:51,300 --> 00:37:54,700
in there, you could have stocks
that have dropped in price,

529
00:37:54,700 --> 00:37:56,600
you're going to have bonds that
have dropped in price or

530
00:37:56,600 --> 00:37:59,500
whatever.
But the point is, if you're

531
00:37:59,500 --> 00:38:03,000
forced to sell them at lower
prices, you're not really

532
00:38:03,000 --> 00:38:06,600
getting the money out of them
that you expected or the growth

533
00:38:06,800 --> 00:38:08,900
that you had put it in there for
originally.

534
00:38:09,200 --> 00:38:11,900
So your Force, that's what they
call for selling.

535
00:38:11,900 --> 00:38:16,700
It's not the strictest
definition of it, but For

536
00:38:16,700 --> 00:38:19,000
sellings, what they do, when you
get a margin call.

537
00:38:19,100 --> 00:38:23,200
It's just liquidate what you
have on hand, but you are being

538
00:38:23,200 --> 00:38:25,500
forced to sell because of
circumstances.

539
00:38:25,500 --> 00:38:28,200
That's my point here.
Is, what's your choice?

540
00:38:28,200 --> 00:38:31,200
You sell it at a loss because
you need the money, you didn't

541
00:38:31,200 --> 00:38:34,400
want to, but you had to.
Because you have those

542
00:38:34,400 --> 00:38:37,200
obligations.
Yes, Phoebe Bank.

543
00:38:37,800 --> 00:38:41,900
Silicon Valley Bank had to meet
the depositors demands for

544
00:38:41,900 --> 00:38:48,300
withdrawal in order to do so.
They had to sell bonds that were

545
00:38:48,300 --> 00:38:52,100
part of their Reserves.
The reserved portfolio.

546
00:38:54,000 --> 00:38:57,400
So they because they had those
Bonds on the books, it what they

547
00:38:57,400 --> 00:39:01,000
paid for now they taken a
realize loss.

548
00:39:01,300 --> 00:39:06,300
Well, that money isn't there?
So that's what tipped the scale.

549
00:39:07,100 --> 00:39:11,500
Okay, cute things real quick
because I just want to make sure

550
00:39:11,500 --> 00:39:14,200
I understand it because like I
said, I'm still trying to wrap

551
00:39:14,200 --> 00:39:20,500
my head around all this.
You for your, you basically cash

552
00:39:20,500 --> 00:39:23,900
out, those bonds, that are worth
less than what you bought form

553
00:39:24,200 --> 00:39:29,800
because the cash on hand looks
more appealing than holding on

554
00:39:29,800 --> 00:39:30,900
to the bond.
You're rich.

555
00:39:31,100 --> 00:39:34,600
You're basically like, well, how
do we keep the doors open?

556
00:39:34,600 --> 00:39:37,000
Kind of a think we.
Yeah, they didn't have any

557
00:39:37,000 --> 00:39:39,700
choice, they had to sell.
If they were going to meet the

558
00:39:39,700 --> 00:39:44,500
depositors demands and and
imagine yourself as like if you

559
00:39:44,500 --> 00:39:49,000
had to sell something to me.
Meet the demands of creditors.

560
00:39:49,800 --> 00:39:54,900
You're doing that because you're
trying to postpone what may be

561
00:39:54,900 --> 00:39:58,900
an inevitable event.
But as soon as they had to do

562
00:39:58,900 --> 00:40:01,600
that, they realized there wasn't
anything else they could do.

563
00:40:02,000 --> 00:40:06,600
And, and, and it tipped the
scales, it was like, if we don't

564
00:40:06,600 --> 00:40:09,200
do this, we can't Pam.
So it will show.

565
00:40:09,400 --> 00:40:13,800
I mean what we say now, hey, we
can't do this because we'd be

566
00:40:13,800 --> 00:40:17,800
forced to sell bonds at a loss
so you know you Saying up, cut

567
00:40:17,800 --> 00:40:20,000
out.
I want to contain the damage.

568
00:40:20,000 --> 00:40:23,600
I don't want too many people to
know him in trouble, so I'll

569
00:40:23,600 --> 00:40:26,500
just keep selling things.
And if I can get back on my feet

570
00:40:26,500 --> 00:40:29,700
here without people knowing
about it, I can get, you know,

571
00:40:30,700 --> 00:40:35,000
either some help somewhere, get
another job, find some

572
00:40:35,200 --> 00:40:39,100
depositors, and, you know,
whatever, whatever they need.

573
00:40:39,700 --> 00:40:45,200
It was just a function of two
things, the demand by depositors

574
00:40:45,200 --> 00:40:51,400
for their money for Whatever
reason doesn't matter and me in

575
00:40:51,400 --> 00:40:56,400
order to meet that demand being
forced to sell assets at a loss

576
00:40:56,500 --> 00:41:01,400
bonds, and that, the bonds were
down in price because they've

577
00:41:01,400 --> 00:41:04,600
held them for several years, and
they've been declining as

578
00:41:04,600 --> 00:41:06,300
interest rates, continue to go
up.

579
00:41:06,900 --> 00:41:08,800
Gotcha.
Nope, that makes sense.

580
00:41:09,300 --> 00:41:16,000
So, and then was with bonds is
okay, and she's me.

581
00:41:17,500 --> 00:41:20,600
I read an article.
On CNN.

582
00:41:20,600 --> 00:41:26,300
And I've got that, I'm going to
throw that in the episode notes,

583
00:41:26,300 --> 00:41:30,300
as well as your three articles,
but it was an article by CNN

584
00:41:30,600 --> 00:41:34,500
that said that Banks could be
sitting on up to six hundred and

585
00:41:34,500 --> 00:41:41,900
twenty billion dollars of how
they put that on unrealized

586
00:41:42,100 --> 00:41:45,600
losses, unrealized losses.
And that that's a that's what

587
00:41:45,600 --> 00:41:49,100
we're talking about here that
relates back to those bombs.

588
00:41:49,500 --> 00:41:54,900
Again, who are the largest
bondholders banks?

589
00:41:55,200 --> 00:41:58,200
Who owns larger amounts of
Treasury Securities.

590
00:41:58,200 --> 00:42:00,700
It mean, in this issue, we're
talking about bank.

591
00:42:00,700 --> 00:42:02,700
So let's face it.
What would a bank put their

592
00:42:02,700 --> 00:42:07,600
money mostly As treasury bonds
but it's still a bond and the

593
00:42:07,600 --> 00:42:10,900
interest rates have gone up.
And so over time their bond

594
00:42:10,900 --> 00:42:17,300
portfolio declines.
So any Bank So, how many

595
00:42:17,300 --> 00:42:20,500
billions of dollars?
How many trillion 0, or in Banks

596
00:42:20,500 --> 00:42:27,300
and how much money is in bonds?
It's a big number, so I don't,

597
00:42:27,300 --> 00:42:30,900
you know, you could have told me
a trillion and it wouldn't move.

598
00:42:32,000 --> 00:42:35,200
Face me as far as how much money
could be there and unrealized

599
00:42:35,200 --> 00:42:37,800
losses.
Well, let your from CNN so it

600
00:42:37,800 --> 00:42:39,400
probably is go through do it
right.

601
00:42:39,900 --> 00:42:44,900
Yeah.
How there's there's a couple

602
00:42:44,900 --> 00:42:46,900
other factors that are important
here.

603
00:42:47,700 --> 00:42:50,200
The maturity of the bond is an
issue.

604
00:42:51,200 --> 00:42:54,400
You go back to that Bond, you
pay 10,000 for.

605
00:42:54,400 --> 00:42:57,700
It was the 1-year Bond, it
doesn't matter and maturity.

606
00:42:57,700 --> 00:43:00,300
You're still going to get your
money back, okay.

607
00:43:01,900 --> 00:43:06,500
It was a five-year Bond.
You got to wait or you sell it

608
00:43:06,500 --> 00:43:11,100
in boss, but it's going to be a
much smaller loss than somebody

609
00:43:11,100 --> 00:43:13,900
who locked in that price for 20
years.

610
00:43:15,300 --> 00:43:19,800
Say because the flux you take
that two percent differential

611
00:43:19,800 --> 00:43:25,600
between 3% and 5% is rates have
gone up and you factor that in

612
00:43:25,600 --> 00:43:29,900
over the next 20 years, you can
take some whopping losses on

613
00:43:29,900 --> 00:43:33,300
your bonds.
So it depends on the maturity.

614
00:43:33,900 --> 00:43:39,600
Then you've also got default
risk, right us treasury bond.

615
00:43:39,600 --> 00:43:42,800
You don't have that because
they're going to come up with

616
00:43:42,800 --> 00:43:44,500
the money regardless of what
they say.

617
00:43:45,700 --> 00:43:50,100
You know, they'll find a way to
pay, but a company, a

618
00:43:50,100 --> 00:43:53,100
corporation, can't do that of
Corporation.

619
00:43:53,100 --> 00:43:57,600
Can't just turn right around and
they can try to sell more bonds

620
00:43:57,900 --> 00:44:03,600
to pay you but if people want
their money you know that's

621
00:44:03,600 --> 00:44:11,200
that's the issue.
So again, If the corporation

622
00:44:11,900 --> 00:44:15,200
defaults the bondholders lose
their money.

623
00:44:15,400 --> 00:44:17,600
That's what's default risk.
Yes.

624
00:44:19,100 --> 00:44:21,900
And so there's usually a factor
built into the rate for that,

625
00:44:21,900 --> 00:44:25,600
but if it's a specific company
or an industry and those are the

626
00:44:25,600 --> 00:44:29,400
bonds you own, then you can add
that to the interest rate risk

627
00:44:29,400 --> 00:44:33,200
because that affects the value
as well, separate from interest

628
00:44:33,200 --> 00:44:35,600
rates.
I mean, it'll show up in the

629
00:44:35,600 --> 00:44:39,100
interest rate but it'll it'll be
a much greater.

630
00:44:39,200 --> 00:44:44,000
Interest rate than other
comparable bonds, which aren't

631
00:44:44,000 --> 00:44:49,200
at risk.
So now it's important also to

632
00:44:49,200 --> 00:44:55,400
recognize that If rates go the
other way, you bought that boy,

633
00:44:55,400 --> 00:44:57,300
back to the about non you
bought.

634
00:44:57,300 --> 00:45:02,300
You pay 10,000, you're earning
3%, $300 a year, interest rates

635
00:45:02,300 --> 00:45:07,700
go up.
Excuse me down, did the up.

636
00:45:07,700 --> 00:45:12,000
So they go down and now they're
paying 10% one-and-a-half

637
00:45:12,000 --> 00:45:15,300
percent a year later.
Well, I'm not going to get rid

638
00:45:15,300 --> 00:45:19,000
of this, okay?
Why would you do that?

639
00:45:19,000 --> 00:45:23,400
Because the new rates, And a
half, but just the opposite

640
00:45:23,400 --> 00:45:27,000
thing happens, if you did decide
to sell it, you would sell it at

641
00:45:27,000 --> 00:45:31,900
a premium because this with
rates at one-and-a-half, you're

642
00:45:31,900 --> 00:45:35,700
getting three.
The price will go up to

643
00:45:35,700 --> 00:45:39,100
compensate for that.
Differential, gotcha.

644
00:45:39,500 --> 00:45:42,700
Don't you worry?
And that risk is always there.

645
00:45:42,700 --> 00:45:48,200
Any time you hear someone say,
yields went up or yields went

646
00:45:48,200 --> 00:45:52,600
down or Bonds were up and And
Bonds were down.

647
00:45:53,200 --> 00:45:57,700
You need to know whether they're
specifically saying bonds or

648
00:45:57,700 --> 00:46:00,200
yields.
Most people read this and it

649
00:46:00,200 --> 00:46:05,000
just runs right through.
If they say, yields on

650
00:46:05,000 --> 00:46:08,800
government securities, increase
today, that means the price of

651
00:46:08,800 --> 00:46:13,200
the bond dropped, okay?
Okay.

652
00:46:14,100 --> 00:46:17,000
Because sometimes, they'll
present it in a way that sounds

653
00:46:17,000 --> 00:46:23,300
positive, but it's just the sort
of fact, In light of Endor,

654
00:46:23,300 --> 00:46:27,000
they'll quote a - statistic that
has nothing to do with bonds and

655
00:46:27,000 --> 00:46:32,300
interest rates and then they'll
say and the yield on treasuries

656
00:46:32,300 --> 00:46:34,300
10-year treasury Securities
dropped.

657
00:46:35,900 --> 00:46:37,900
That means the bond price went
up.

658
00:46:38,000 --> 00:46:42,800
That's not a negative.
You know, your bonds more bonds

659
00:46:42,800 --> 00:46:47,600
are more valuable rates went
down, so that's happening all

660
00:46:47,600 --> 00:46:49,300
the time.
That's that's the way the bond

661
00:46:49,300 --> 00:46:53,400
market works, okay?
Always have a moving interest

662
00:46:53,400 --> 00:46:58,000
rate.
So, let me ask this, this brings

663
00:46:58,000 --> 00:47:01,400
up to questions and it's too
that I hadn't thought of when we

664
00:47:01,400 --> 00:47:07,400
talked last first is, is there a
way that that the average

665
00:47:08,200 --> 00:47:12,300
Person.
You know, just got a little bit

666
00:47:12,300 --> 00:47:16,600
of savings putting away for
401k's.

667
00:47:16,900 --> 00:47:21,200
You got a savings account?
Is there a way for the average

668
00:47:21,200 --> 00:47:27,000
person to tell what banks may be
over leveraged with bad bonds?

669
00:47:30,100 --> 00:47:33,300
I would say it's not so much.
The over-leveraged you have bad

670
00:47:33,300 --> 00:47:36,200
bonds, you want to know.
Are there banks that are

671
00:47:37,600 --> 00:47:39,800
Flirting with danger in any
sense.

672
00:47:40,000 --> 00:47:42,300
I mean I don't care what they're
doing.

673
00:47:42,300 --> 00:47:47,700
If they're if they're on their
involved in investment, see the

674
00:47:47,700 --> 00:47:53,900
bond issue, wasn't the problem.
In 2008, it was mortgages,

675
00:47:54,300 --> 00:47:57,000
right?
So what you really want to know,

676
00:47:57,000 --> 00:48:00,900
you can you can specifically
look for ya banks that we have

677
00:48:00,900 --> 00:48:04,700
Bond portfolios, and there are
banking sources that will give

678
00:48:04,700 --> 00:48:11,300
you statistics and even rate
independently Banks wants to

679
00:48:11,300 --> 00:48:14,900
watch out for ones to check and
you can do that, just go online

680
00:48:15,200 --> 00:48:18,900
and I'd have to sit down and
your do a Google search because

681
00:48:19,000 --> 00:48:22,300
and I've done it in the past.
At different times, but there

682
00:48:22,300 --> 00:48:27,900
are ways to get information.
And there's you know if you do

683
00:48:27,900 --> 00:48:31,300
it independently like that,
you're probably going to get a

684
00:48:31,300 --> 00:48:34,600
more reliable number to base,
any judgments?

685
00:48:34,600 --> 00:48:39,100
Yeah, that was the other part of
that first question is, are

686
00:48:39,100 --> 00:48:41,200
there sources that are more
reliable than others?

687
00:48:41,200 --> 00:48:45,700
Because a lot of information you
can get through the feds.

688
00:48:45,700 --> 00:48:51,400
You know, on there are various
websites and certain Banks have

689
00:48:51,400 --> 00:48:53,200
websites where they publish
things.

690
00:48:53,900 --> 00:48:57,600
I would just look two
independent sources and the

691
00:48:57,600 --> 00:48:59,500
banks will have financial
statements.

692
00:48:59,500 --> 00:49:03,800
So you know, if there are public
Bank, their public company,

693
00:49:03,800 --> 00:49:06,800
there's financial statements.
Okay?

694
00:49:07,300 --> 00:49:11,900
Now I'm going to say something
here or ask a question because

695
00:49:11,900 --> 00:49:19,600
it occurred to me if because
because in all actuality, even

696
00:49:19,600 --> 00:49:29,400
though it was a massive Number
as far as SBB and and and

697
00:49:29,400 --> 00:49:34,000
signature, it was still kind of
what would be considered a

698
00:49:34,008 --> 00:49:37,600
midsize bank, right.
I mean, this isn't a national

699
00:49:37,600 --> 00:49:40,800
global bank.
S VB was a big bank.

700
00:49:41,000 --> 00:49:42,400
It was a big Bank.
Okay.

701
00:49:42,400 --> 00:49:45,500
One say there were a big bank
because they were dealing, they

702
00:49:45,500 --> 00:49:48,800
were dealing with Venture
capitalists and the and the tech

703
00:49:48,800 --> 00:49:51,500
companies, this is big money.
Okay.

704
00:49:51,600 --> 00:49:54,400
All right.
So not just, it's not just

705
00:49:54,500 --> 00:49:58,700
JPMorgan Chase or you know,
Wells Fargo, but it's still a

706
00:49:58,707 --> 00:50:04,800
very big bank and they're very
well, spread into areas

707
00:50:05,200 --> 00:50:08,700
different areas and stuff.
Okay, I'm going to ask you a

708
00:50:08,700 --> 00:50:11,400
question here and you can just
decline to answer this if you

709
00:50:11,400 --> 00:50:13,700
want, but it's a thought that
came to me as you were

710
00:50:13,700 --> 00:50:19,800
describing this.
Could the interest rate hikes?

711
00:50:21,300 --> 00:50:25,300
Have been done to fold one to
slow, down the economy, slowed

712
00:50:25,300 --> 00:50:29,500
down inflation, but also to
maybe get rid of banks that

713
00:50:29,500 --> 00:50:34,300
maybe you didn't want.
In the financial area this

714
00:50:34,300 --> 00:50:38,300
anymore.
I suppose it could.

715
00:50:38,300 --> 00:50:43,500
I don't know whether the
question would be, why would SD

716
00:50:43,700 --> 00:50:47,400
be fit that profile, though?
I don't know.

717
00:50:47,400 --> 00:50:53,700
I'm just, I'm just throwing out
throwing out ideas made and it

718
00:50:53,700 --> 00:50:57,100
just struck me as odd.
The, the question just popped up

719
00:50:57,100 --> 00:50:59,300
out of nowhere.
So I wanted to ask, I think it's

720
00:50:59,300 --> 00:51:04,700
possible.
I'm not saying SBB was the

721
00:51:04,700 --> 00:51:09,500
actual Target, right?
Sara Lee, but like SV B.

722
00:51:09,500 --> 00:51:12,600
And they just happen to be the
one to pull the first winning

723
00:51:12,600 --> 00:51:17,600
Wonka ticket, so to speak.
Well, you know, depends on

724
00:51:17,600 --> 00:51:23,100
depending on how far astray from
the specifics in front of us.

725
00:51:23,100 --> 00:51:29,700
We want to move.
We can always look at the

726
00:51:29,700 --> 00:51:35,900
possibility that the FED already
knows they don't have control

727
00:51:35,900 --> 00:51:43,500
over things. so, maybe what
they're trying to do is Contain

728
00:51:43,900 --> 00:51:47,700
the potential damage and event
Advanced.

729
00:51:48,000 --> 00:51:54,100
Okay this okay, we're we know
this is going to come down, we

730
00:51:54,100 --> 00:51:58,000
don't know exactly how it's all
going to evolve, but if we don't

731
00:51:58,000 --> 00:52:01,900
do something that makes it look
like we're trying to keep it

732
00:52:01,900 --> 00:52:06,800
together, we're all up a crate
and and this is the problem with

733
00:52:06,800 --> 00:52:12,900
people's analysis of the Fed.
They're convinced that the FED

734
00:52:12,900 --> 00:52:19,300
is there for their benefit to
help them, to help them to do

735
00:52:19,300 --> 00:52:26,900
what's right financially and
help economically with policies

736
00:52:26,900 --> 00:52:30,000
and everything else.
But it's a little more

737
00:52:30,000 --> 00:52:33,600
self-serving than that.
You know, we talked about it

738
00:52:33,600 --> 00:52:39,200
before, but the Federal Reserve
is a private Institution, It was

739
00:52:39,200 --> 00:52:45,200
authorized by Congress but it's
a private institution and it is

740
00:52:45,200 --> 00:52:52,200
a banker's Bank.
And the way it operates is that

741
00:52:52,200 --> 00:52:59,600
the Central Bank provides an
environment for member banks.

742
00:53:01,000 --> 00:53:07,800
To create money in perpetuity
through fractional Reserve Bank.

743
00:53:08,000 --> 00:53:11,500
Which was the other thing that
we want to talk about bird?

744
00:53:11,500 --> 00:53:16,400
Yeah and and collect the
interest.

745
00:53:17,400 --> 00:53:22,000
And they lend money to
individuals corporations.

746
00:53:23,100 --> 00:53:27,100
And government, and they
continue to collect interest.

747
00:53:27,100 --> 00:53:31,800
See, and that's the key here.
They create money, right?

748
00:53:31,800 --> 00:53:37,300
The idea behind the origin of
the Fed was, let's we need to

749
00:53:37,300 --> 00:53:41,400
get it used to be a national
bank and then Andrew Jackson

750
00:53:41,400 --> 00:53:44,600
cost that and said we're not
going to do that again.

751
00:53:44,600 --> 00:53:52,500
So the FED came into existence
under the guise of not being an

752
00:53:52,500 --> 00:53:56,400
ass.
Little bank and separating

753
00:53:56,400 --> 00:54:01,000
itself from the government as
far as being private and that

754
00:54:01,000 --> 00:54:05,200
sort of thing.
But there is, you know, I do

755
00:54:05,207 --> 00:54:08,700
know a bit of collusion if you
will in order to get the charter

756
00:54:09,100 --> 00:54:16,400
or to be are in order for to get
Congress to approve a central

757
00:54:16,400 --> 00:54:23,000
bank. they convinced those at
the time who were behind

758
00:54:23,800 --> 00:54:29,700
institutionalizing the FED
Federal Reserve It's a meetings

759
00:54:29,700 --> 00:54:31,800
behind closed doors and
government.

760
00:54:31,800 --> 00:54:39,100
Officials were promised that if
the FED were organized and

761
00:54:39,100 --> 00:54:44,600
approved by Congress that the
FED would guarantee that the US

762
00:54:44,600 --> 00:54:46,600
government never ran out of
money.

763
00:54:47,700 --> 00:54:51,900
So, regardless of the charade of
issuing treasury, bonds or

764
00:54:51,900 --> 00:54:55,300
whatever, you know, whatever we
see happening.

765
00:54:57,400 --> 00:55:03,000
If there's ever any different to
make up the FED steps in, and if

766
00:55:03,000 --> 00:55:06,200
there's ever a case where there
isn't enough money, from those

767
00:55:06,200 --> 00:55:13,000
proceeds or anything else, the
FED is always there and they are

768
00:55:13,400 --> 00:55:17,200
involved in the marketplace
through the New York District

769
00:55:17,700 --> 00:55:25,300
district district bank and and
they behind some Securities

770
00:55:25,700 --> 00:55:27,800
continuously.
Every box.

771
00:55:28,500 --> 00:55:32,500
But as the 2008, they're also
involved in a lot of other boss

772
00:55:34,300 --> 00:55:37,800
nothing.
But if they if they had done

773
00:55:37,800 --> 00:55:40,400
what they did, I'm not saying
what they did was right.

774
00:55:41,000 --> 00:55:45,900
But if they hadn't done what
they did, in 2008 2010 to go in

775
00:55:45,900 --> 00:55:49,800
and to Market and buy up all
these bonds, we would have

776
00:55:49,800 --> 00:55:53,100
already been in a full-scale
depression, that was a class,

777
00:55:53,600 --> 00:55:58,300
they averted that.
But Question is, should they

778
00:55:58,300 --> 00:56:01,500
have been buying them?
Because all they really did is

779
00:56:01,700 --> 00:56:05,300
again push things out and then
inflate again because the only

780
00:56:05,300 --> 00:56:09,900
reason it was a problem was
because of overextended loans

781
00:56:09,900 --> 00:56:14,500
and cheap and easy credit to
start with anyway.

782
00:56:14,900 --> 00:56:18,100
So that's why the FED exist.
They don't exist for our

783
00:56:18,100 --> 00:56:20,400
purpose, they exist for their
own purpose.

784
00:56:20,700 --> 00:56:25,500
Now, Yeah, they're the ones who
are saying they're managing the

785
00:56:25,500 --> 00:56:28,200
money supply.
All right.

786
00:56:31,100 --> 00:56:36,400
And yet there's an element that
we have to recognize is they are

787
00:56:36,400 --> 00:56:47,700
fiercely. cautious if you will
about their independence because

788
00:56:47,700 --> 00:56:52,600
if people understood that
Independence and how far, how

789
00:56:52,600 --> 00:56:56,400
deep that goes in terms of who
actually pulls the strings and

790
00:56:56,400 --> 00:57:02,400
makes the final decisions about
policy, they would not be happy,

791
00:57:03,200 --> 00:57:06,900
you know, it will be a
regardless of that if you take

792
00:57:06,900 --> 00:57:12,500
that whole conspiracy idea and
set it aside The FED has always

793
00:57:12,500 --> 00:57:17,800
maintained that they are going
to try to avoid recessions by

794
00:57:17,800 --> 00:57:23,000
managing the economic cycle.
And that's why they're involved

795
00:57:23,000 --> 00:57:27,900
in the market, but that's
ridiculous to think that

796
00:57:28,900 --> 00:57:33,100
billions upon billions of
decisions involving trillions

797
00:57:33,100 --> 00:57:38,400
and trillions of dollars can be
managed.

798
00:57:40,100 --> 00:57:44,500
By twelve men around a table.
It just doesn't make sense, but

799
00:57:44,500 --> 00:57:47,100
they're trying to that's what
they say.

800
00:57:47,300 --> 00:57:50,800
Whether they are not, that's
what they're they said.

801
00:57:50,800 --> 00:57:54,000
Their purpose is is we're going
to do these things that we're

802
00:57:54,000 --> 00:57:57,400
going to make this this way.
Obviously, it was a motive

803
00:57:57,400 --> 00:57:59,700
there, because as they create
money, they lend.

804
00:57:59,700 --> 00:58:02,700
It people borrow.
They spend more, they borrow

805
00:58:02,700 --> 00:58:07,100
more money, you know, so there's
a cycle there, but that's good

806
00:58:07,100 --> 00:58:13,500
for the fed and the banks. but
thinking that, you know, again

807
00:58:13,500 --> 00:58:21,300
if you set the concealer any
conspiracy ideas aside The FED

808
00:58:21,300 --> 00:58:26,100
has been done a very good job of
managing things because there

809
00:58:26,100 --> 00:58:30,000
are, first of all, they are the
ones who create inflation, like

810
00:58:30,000 --> 00:58:32,700
by expanding the supply of money
and credit.

811
00:58:32,800 --> 00:58:37,700
They create the effects that we
see in the terms of the loss.

812
00:58:37,700 --> 00:58:41,200
In purchasing power, the US
dollar and higher prices for

813
00:58:41,200 --> 00:58:44,000
goods and services.
That's the result of the

814
00:58:44,000 --> 00:58:47,300
inflation that the FED creates
by expanding the supply of

815
00:58:47,308 --> 00:58:49,600
money.
What?

816
00:58:50,100 --> 00:58:52,100
Whether you think?
It's right or not somebody.

817
00:58:52,100 --> 00:58:55,100
You can argue all day long that
they need to do that.

818
00:58:55,100 --> 00:58:58,000
They have to do it.
It, there's a purpose behind it.

819
00:58:58,000 --> 00:59:01,200
It doesn't matter.
That's why inflation is what we

820
00:59:01,200 --> 00:59:02,400
have.
The problems that we do.

821
00:59:02,700 --> 00:59:08,000
It's cumulative.
It's it's unpredictable and over

822
00:59:08,000 --> 00:59:10,900
time, it becomes more volatile.
Gotcha.

823
00:59:10,900 --> 00:59:14,400
And that's part of what we're
seeing is you get to a point.

824
00:59:14,400 --> 00:59:18,100
It's like you don't have much
room to maneuver when you first

825
00:59:18,100 --> 00:59:21,500
start out, People who are into a
balloon, there's a lot of empty

826
00:59:21,500 --> 00:59:25,400
space in there, lets them out,
blow some in, let's zoom out a

827
00:59:25,408 --> 00:59:28,400
little more in when you get it
to the point where the balloon

828
00:59:28,400 --> 00:59:33,600
is extended, how much more are
to you inject into it before it

829
00:59:33,600 --> 00:59:38,200
pops, right?
So so you got to try to let some

830
00:59:38,200 --> 00:59:43,100
air out carefully, right?
No.

831
00:59:43,100 --> 00:59:46,200
I make sense so they were
fighting their, the effects of

832
00:59:46,200 --> 00:59:52,700
their own policies is what's
happening now and they done not

833
00:59:52,700 --> 00:59:57,000
a good job because the FED
caused the Great Depression and

834
00:59:57,000 --> 01:00:02,500
they've admitted that You know,
it's in the records you they

835
01:00:02,500 --> 01:00:05,600
cost it, they didn't cause the
crash but they caused the

836
01:00:05,600 --> 01:00:08,400
depression.
They caused they created the

837
01:00:08,400 --> 01:00:14,500
conditions that led to the crash
and the conditions were what?

838
01:00:14,600 --> 01:00:18,500
Because the economy is already
in a down cycle before the stock

839
01:00:18,500 --> 01:00:22,500
market crash in 1929.
It's like environment.

840
01:00:23,600 --> 01:00:27,100
Yeah, it's like a fireman who
sets fire to a house just so he

841
01:00:27,100 --> 01:00:29,300
can try this against come back
on his truck.

842
01:00:29,700 --> 01:00:31,000
Put it out.
Yep.

843
01:00:32,900 --> 01:00:35,800
So where does fractional Reserve
banking fit in all this?

844
01:00:36,100 --> 01:00:38,000
All right, that's our banking
system.

845
01:00:38,400 --> 01:00:41,300
And again, that's what we talked
about earlier.

846
01:00:44,200 --> 01:00:48,200
When you put your money in a
bank, the banks lend out.

847
01:00:49,300 --> 01:00:53,200
As much as 90%, they have
required to keep 10% of all,

848
01:00:53,200 --> 01:00:58,500
deposits total deposits on hand.
Now here's what happens.

849
01:00:59,400 --> 01:01:03,500
That's just the first step you
go to your bank and put in

850
01:01:03,500 --> 01:01:10,000
10,000 dollars.
The bank says less is over our

851
01:01:10,000 --> 01:01:12,900
excess reserves.
We're going to loan out 9000.

852
01:01:12,900 --> 01:01:16,600
They'll own the 9000 out.
Okay.

853
01:01:17,700 --> 01:01:25,300
Person gets the 9000 says, I'm
going to use this money to buy a

854
01:01:25,300 --> 01:01:32,300
car. and, Do something else.
I'll put some money in savings

855
01:01:32,300 --> 01:01:35,500
over, buy a new car.
So they go and they put money

856
01:01:35,500 --> 01:01:39,200
down on a car.
Then they put money in their

857
01:01:39,200 --> 01:01:42,600
Bank.
The bank to put their money and

858
01:01:42,600 --> 01:01:45,200
looks out and said, hey, we got
five thousand dollars.

859
01:01:46,700 --> 01:01:50,500
We didn't have before our
reserve requirements are met.

860
01:01:51,900 --> 01:01:57,500
Wear it alone, out $4500, hmm.
Okay.

861
01:01:58,800 --> 01:02:04,100
The guy, the car dealer, the got
the money for a down payment,

862
01:02:04,100 --> 01:02:09,200
puts it in his bank.
Banks is hey we got extra money

863
01:02:09,200 --> 01:02:14,100
here.
Thanks sis we can loan out 90%

864
01:02:14,100 --> 01:02:16,900
of that.
We had what four thousand so we

865
01:02:16,900 --> 01:02:20,900
can lend out 3600 dollars so
they lend that.

866
01:02:21,700 --> 01:02:26,000
Now what happens here is there's
a multiple effect and it works

867
01:02:26,000 --> 01:02:32,800
out to be roughly 8 to 10 times
but they are theoretically is no

868
01:02:32,800 --> 01:02:37,400
limit.
The money supply continues to

869
01:02:37,400 --> 01:02:42,900
expand on its own because of
fractional Reserve banking you

870
01:02:42,900 --> 01:02:47,300
go in cold into your bank and
they know they've got their

871
01:02:47,300 --> 01:02:51,900
deposits, they've got their on
hand.

872
01:02:51,900 --> 01:02:55,800
They know what that total is and
they've got their reserves and

873
01:02:55,800 --> 01:03:00,000
they have just enough money to
loan you money, based on their

874
01:03:00,000 --> 01:03:02,500
Deposit.
They really don't have that

875
01:03:02,500 --> 01:03:05,000
money.
They're just going to create

876
01:03:05,200 --> 01:03:08,500
They're giving you a hunter
because all those depositors can

877
01:03:08,500 --> 01:03:10,500
come in and get their money at
any time.

878
01:03:11,400 --> 01:03:18,700
So the money you get is new
money created out of or buy a

879
01:03:18,700 --> 01:03:25,000
pen stroke or a computer key and
it goes over and over again.

880
01:03:25,100 --> 01:03:31,100
Now, the problem is all the
people who have money in the

881
01:03:31,107 --> 01:03:36,700
bank's, their ongoing day-to-day
Bank activity varies from one to

882
01:03:36,700 --> 01:03:41,500
the next.
Some need their money part of

883
01:03:41,500 --> 01:03:43,800
it.
Some need more of it, some don't

884
01:03:43,800 --> 01:03:47,600
need it.
And at some point though, more

885
01:03:47,600 --> 01:03:52,000
people need it than normal, and
they ask for it.

886
01:03:52,100 --> 01:03:55,800
Again, doesn't matter.
The reason if you have too many

887
01:03:55,800 --> 01:04:03,100
people that want their money
back, Too soon that exceed the

888
01:04:03,100 --> 01:04:06,400
reserves that are on hand, how
do you pay them?

889
01:04:07,400 --> 01:04:13,000
See Silicon Valley Bank tip the
scale so we don't have it aft at

890
01:04:13,000 --> 01:04:16,700
a certain point.
This is all we have so they ran

891
01:04:16,700 --> 01:04:22,000
out of their reserves which
means they were bankrupt.

892
01:04:22,500 --> 01:04:26,200
You know, they didn't have any
more money by building exceeded

893
01:04:26,200 --> 01:04:31,000
the assets.
In all banks operate like that.

894
01:04:31,400 --> 01:04:33,700
Yeah that's the banking system
fractional.

895
01:04:33,700 --> 01:04:39,000
Reserve Banking and I got an
article out.

896
01:04:39,100 --> 01:04:42,200
It's called fractional Reserve
banking the elephant in the room

897
01:04:43,000 --> 01:04:48,100
and it goes through an example,
several examples, really, that

898
01:04:48,100 --> 01:04:55,800
clearly show the problems with
this system and every time

899
01:04:55,800 --> 01:05:02,000
there's a bank problem
regardless of What triggered it?

900
01:05:03,900 --> 01:05:07,800
These people trying to get their
money out and there and and the

901
01:05:07,800 --> 01:05:11,800
reason they can't give it it's
because the bank doesn't have it

902
01:05:12,300 --> 01:05:15,100
again.
It could be a rumor, it could be

903
01:05:15,100 --> 01:05:17,800
unsubstantiated, it doesn't
matter.

904
01:05:18,000 --> 01:05:21,100
Either you have the money or you
don't have the money.

905
01:05:21,700 --> 01:05:25,800
If you operate on a 10 percent
Reserve requirement, you don't

906
01:05:25,800 --> 01:05:31,300
have the money to pay your
depositors if they want it at

907
01:05:31,300 --> 01:05:35,100
the same time or enough of them.
We're not talking about all of

908
01:05:35,100 --> 01:05:38,500
them, only a fraction of them
have to want it.

909
01:05:38,600 --> 01:05:42,300
Just enough to exceed your
ability to pay them.

910
01:05:44,700 --> 01:05:49,300
So did we always operate trip
with fractional Reserve banking?

911
01:05:49,300 --> 01:05:52,800
Or is this just since the
Inception of the fed?

912
01:05:53,600 --> 01:05:56,100
Well definitely.
Since the Inception of the FED?

913
01:05:56,100 --> 01:05:57,400
Yes.
Okay.

914
01:05:57,700 --> 01:06:04,300
And prior to that, when she go
back to a certain point, you

915
01:06:04,300 --> 01:06:06,800
know, you hear people talk about
the printing press but that's

916
01:06:06,800 --> 01:06:10,900
the way it government's operated
in the government still

917
01:06:10,900 --> 01:06:12,800
inflated.
They just printed money that

918
01:06:12,800 --> 01:06:14,300
they need it, if they didn't
have it.

919
01:06:14,400 --> 01:06:19,500
They printed it and you, but
remember all his pain there was,

920
01:06:20,000 --> 01:06:24,300
there was a link between gold
and the dollars, right?

921
01:06:24,600 --> 01:06:31,800
So there was a, there was a
restraint, if you will, and it

922
01:06:31,800 --> 01:06:40,700
caused problems for governments
and it probably, you know, you

923
01:06:40,700 --> 01:06:43,600
want to think that maybe it
reduced the possibility of

924
01:06:43,600 --> 01:06:46,900
governments.
Involved in Wars because they

925
01:06:46,900 --> 01:06:50,100
couldn't fund them.
Whereas if they had a printing

926
01:06:50,100 --> 01:06:52,700
press in their own currency,
they would just print it, you

927
01:06:52,700 --> 01:06:58,200
know, be whatever they wanted.
So anyway, the fractional

928
01:06:58,200 --> 01:07:02,400
Reserve banking has been around.
That's the way central banks

929
01:07:02,400 --> 01:07:05,400
operate.
We're modern Central Banking is

930
01:07:05,600 --> 01:07:07,800
all on a fractional Reserve
basis.

931
01:07:08,400 --> 01:07:11,800
Nobody plays it close to the
vest.

932
01:07:12,500 --> 01:07:16,400
And, and the precedent for that
goes back to when people use

933
01:07:16,400 --> 01:07:20,000
gold as money and the people
that ran the warehouses would

934
01:07:20,000 --> 01:07:25,300
give out receipts that were
negotiable for the gold, which

935
01:07:25,300 --> 01:07:28,600
was their money and then the
bank's decided or not, the

936
01:07:28,600 --> 01:07:31,300
banks.
But the warehouse is decided, we

937
01:07:31,300 --> 01:07:35,100
should lend some of this gold
out because everybody, they were

938
01:07:35,100 --> 01:07:37,100
just turning in receipts.
They weren't coming and

939
01:07:37,100 --> 01:07:41,100
physically getting their goal.
So if they lent out the goals at

940
01:07:41,100 --> 01:07:47,600
interest, They can make some
money without as long as more

941
01:07:47,600 --> 01:07:50,100
people didn't want their gold,
you know?

942
01:07:50,100 --> 01:07:53,400
And then it evolved to the point
where it became paper and now a

943
01:07:53,500 --> 01:07:56,600
digital currency but it's the
same same principle.

944
01:07:57,100 --> 01:08:01,200
Fractional Reserve now been
around for quite a while.

945
01:08:01,900 --> 01:08:04,900
When you said there were some
drawbacks to your money being

946
01:08:04,900 --> 01:08:09,000
tied to Gold, the first one for
government for government for

947
01:08:09,000 --> 01:08:11,500
government.
Yeah, it's a restraint, so

948
01:08:11,500 --> 01:08:14,400
natural restraint.
When you said that, the first

949
01:08:14,400 --> 01:08:17,700
thing I thought is what kind of
downside like they can't spend

950
01:08:17,700 --> 01:08:20,600
like drunken Sailors no
disrespect meant to drunken

951
01:08:20,600 --> 01:08:23,200
Sailors anywhere with exactly
the point.

952
01:08:23,700 --> 01:08:31,200
It restricts their ability to
fund whatever amounts and

953
01:08:31,200 --> 01:08:35,000
numbers of social programs and
everything else.

954
01:08:35,000 --> 01:08:40,700
They think they're supposed to
be involved and wars and see.

955
01:08:40,700 --> 01:08:43,800
I do remember from Studying
history.

956
01:08:44,200 --> 01:08:48,700
That the original idea was is
that there was no emergency

957
01:08:48,700 --> 01:08:52,399
spending, unless it was in case
of War, right?

958
01:08:52,399 --> 01:08:54,200
That was, that was the original
plan.

959
01:08:54,399 --> 01:08:57,899
The only time you got to fire
up, those printing presses is

960
01:08:57,899 --> 01:09:01,100
when you thought they were going
to light fire to your Capital,

961
01:09:01,600 --> 01:09:03,600
right?
That was it in American history

962
01:09:04,300 --> 01:09:09,600
and I find it interesting that
oftentimes to this day, when

963
01:09:09,899 --> 01:09:14,899
they need a huge influx of cash.
Let's just go back to LBJ in the

964
01:09:14,899 --> 01:09:16,800
Great Society.
It was called the war on

965
01:09:16,800 --> 01:09:21,200
poverty, right?
Or it was whatever else and it

966
01:09:21,200 --> 01:09:24,100
makes you.
And again, I know I'm jumping on

967
01:09:24,100 --> 01:09:28,399
the conspiracy train here, but
it makes you wonder how often

968
01:09:28,399 --> 01:09:33,700
have we enacted war or military
interventions?

969
01:09:33,700 --> 01:09:38,899
That we later called Wars for
the reason of being able to fire

970
01:09:38,899 --> 01:09:45,500
up those presses?
Yeah yeah no I agree there's and

971
01:09:45,500 --> 01:09:50,300
and or that it just the fact
that we have that type of a

972
01:09:50,308 --> 01:09:56,400
system allows them to do that,
you know, if they couldn't do

973
01:09:56,400 --> 01:09:57,900
it.
You know that that was

974
01:09:58,300 --> 01:10:02,800
governments were so happy to get
off the gold standard after

975
01:10:02,800 --> 01:10:09,200
World War Two.
Because it was it's like You

976
01:10:09,200 --> 01:10:13,400
know, all their motivations were
put on hold as long as you had a

977
01:10:13,407 --> 01:10:16,000
goal standard.
They were limited, but that was

978
01:10:16,000 --> 01:10:19,700
the purpose right supposed to be
limited.

979
01:10:19,900 --> 01:10:23,500
It was the people that were
supposed to make the decisions

980
01:10:23,500 --> 01:10:27,100
that government was making.
And once that the government was

981
01:10:27,100 --> 01:10:33,000
freed from that, then all the
political and financial

982
01:10:33,100 --> 01:10:38,700
regulations increased.
Let me ask you this real quick.

983
01:10:40,700 --> 01:10:47,700
The feds stepped in and at first
they said, I shouldn't say they

984
01:10:47,700 --> 01:10:51,200
will just name her.
Janet Yellen says, we're not

985
01:10:51,200 --> 01:10:55,200
going to bail you out, right?
That was a Friday and then it

986
01:10:55,200 --> 01:11:01,400
only took till Sunday before she
was like on second thought you

987
01:11:01,407 --> 01:11:04,700
know, and then you can call it
whatever you want but in essence

988
01:11:04,700 --> 01:11:07,900
it was a bailout, right?
And and I want to be clear here.

989
01:11:08,000 --> 01:11:11,200
I'm glad Add that your normal
run-of-the-mill.

990
01:11:11,200 --> 01:11:16,200
Depositor didn't get screwed.
Right, I'm I'm super happy with

991
01:11:16,200 --> 01:11:20,700
that.
But it still remains that she

992
01:11:20,700 --> 01:11:28,000
did an about-face, way fast.
And so do you have any ideas?

993
01:11:28,000 --> 01:11:32,200
You have any thoughts on why she
pivoted as quick as she did?

994
01:11:32,400 --> 01:11:37,400
Because it doesn't necessarily
send, send the message of, don't

995
01:11:37,400 --> 01:11:40,800
worry about this.
This was an aberration, you

996
01:11:40,800 --> 01:11:43,100
know, because if you thought was
an aberration, you two thought,

997
01:11:43,100 --> 01:11:45,200
okay, doesn't need massive
intervention.

998
01:11:45,200 --> 01:11:49,000
We can get through this pretty
quick, so, To make an about-face

999
01:11:49,000 --> 01:11:54,000
that quickly, any ideas on what
it is, she could have seen that

1000
01:11:54,000 --> 01:11:58,200
would have caused her to do that
about face that quickly.

1001
01:11:59,000 --> 01:12:03,900
I think this goes back to what
we talked about earlier, when we

1002
01:12:03,900 --> 01:12:11,700
referred to, you can look at the
numbers when you look at the

1003
01:12:12,300 --> 01:12:16,400
size.
And the scope.

1004
01:12:17,700 --> 01:12:22,900
Of the people involved who are
affected by this, we're okay.

1005
01:12:22,900 --> 01:12:26,100
If these depositors aren't made
whole, what's going to be the

1006
01:12:26,100 --> 01:12:30,100
impact?
And then you're talking about,

1007
01:12:30,100 --> 01:12:34,900
like I said, big money, not the
guy who owes a few hundred

1008
01:12:34,900 --> 01:12:39,500
thousand or a million but large
creditors or large depositors

1009
01:12:39,800 --> 01:12:44,500
where the money is such that
it's you're going to make waves

1010
01:12:45,200 --> 01:12:48,600
if you don't do something like
this, so I think it was more a

1011
01:12:48,600 --> 01:12:55,200
matter of that it wasn't like,
billions of dollars.

1012
01:12:57,600 --> 01:13:04,600
A few thousand at a time, right?
Concentrations of money, just

1013
01:13:04,600 --> 01:13:08,300
huge numbers that would affect a
wide.

1014
01:13:08,300 --> 01:13:14,100
Much wider spread, it will go
out and that and the threat that

1015
01:13:14,100 --> 01:13:18,100
what to whatever extent that
wasn't controlled.

1016
01:13:18,400 --> 01:13:23,400
Not just that.
But how it could, it could be

1017
01:13:23,400 --> 01:13:26,800
played from there you know,
expanded that you could have.

1018
01:13:27,300 --> 01:13:31,400
More contingencies than you
could even imagine.

1019
01:13:31,500 --> 01:13:37,500
So it was just too big to make
that kind of a statement which

1020
01:13:37,500 --> 01:13:40,300
means they were too big to let
it go under.

1021
01:13:40,500 --> 01:13:45,300
Now the share all of the private
owners know the share a stock

1022
01:13:45,600 --> 01:13:49,400
price shareholders and the
bondholders, they lost their

1023
01:13:49,400 --> 01:13:52,500
investment.
Okay, which should have been,

1024
01:13:52,500 --> 01:13:54,500
right?
Because they were the absolutely

1025
01:13:54,500 --> 01:13:56,000
that's the way it is.
That's it.

1026
01:13:56,600 --> 01:14:01,300
It's definitely.
But so I think, you know,

1027
01:14:02,900 --> 01:14:08,600
initially Janet Yellen was
playing the game, as she knows,

1028
01:14:08,600 --> 01:14:12,600
it's supposed to be played, and
she still doing that.

1029
01:14:12,600 --> 01:14:17,800
She just modified her references
once they got together and

1030
01:14:17,800 --> 01:14:26,000
talked to me, I realized it, we
Really let this go because it

1031
01:14:26,000 --> 01:14:28,400
could bring the whole house, the
cards down or something like

1032
01:14:28,400 --> 01:14:31,500
that, you know, was big enough
to worry about.

1033
01:14:31,900 --> 01:14:34,400
That's that's definitely a
factor.

1034
01:14:38,400 --> 01:14:42,100
Any inclination on, whether you
think they can actually contain

1035
01:14:42,500 --> 01:14:46,000
contain to this.
I know contagion has been a word

1036
01:14:46,000 --> 01:14:48,100
that's been thrown around a lot
on this.

1037
01:14:48,100 --> 01:14:50,200
Yeah.
You know, I looked at it word up

1038
01:14:50,200 --> 01:14:53,600
again last night when I was
writing an article and I'm like,

1039
01:14:56,200 --> 01:14:59,900
yeah.
The potential is there.

1040
01:15:00,900 --> 01:15:04,700
Okay?
Because of the size and the

1041
01:15:04,700 --> 01:15:09,200
scope and the position.
We're in, we're more vulnerable

1042
01:15:09,200 --> 01:15:12,100
right now, because of what has
happened.

1043
01:15:12,100 --> 01:15:16,200
Over the last couple years.
I know the credit markets are

1044
01:15:16,200 --> 01:15:19,200
very vulnerable.
They were on a Razors Edge

1045
01:15:19,200 --> 01:15:22,100
before.
You've got banks on a 10 percent

1046
01:15:22,100 --> 01:15:27,400
Reserve ratio so there isn't a
whole lot of wiggle room to

1047
01:15:27,400 --> 01:15:35,500
absorb and contain damage.
So, it's I think we're at a

1048
01:15:35,500 --> 01:15:38,700
point where, yeah, it could, I
felt that way before.

1049
01:15:38,900 --> 01:15:43,000
The problem is, I've seen it too
often, where, I mean, when I

1050
01:15:43,100 --> 01:15:47,800
think back at to 2008 and on
this, like, how did we ever get

1051
01:15:47,800 --> 01:15:51,100
out of that, you know, the way
we did, how could, how could

1052
01:15:51,100 --> 01:15:57,200
people turn on a dime like that?
And by end all lat and accept

1053
01:15:57,200 --> 01:15:59,000
it.
Now, the economy didn't get

1054
01:15:59,000 --> 01:16:01,800
moving that quickly.
And that was a big, Concern.

1055
01:16:02,500 --> 01:16:08,000
But they kept the system from
imploding because the FED jumped

1056
01:16:08,000 --> 01:16:12,000
in and started buying Bonds in
the open market, that's what

1057
01:16:12,000 --> 01:16:16,500
saved them on Market.
His defense purchase of bonds

1058
01:16:17,500 --> 01:16:22,600
and and then course expanding
the credit and getting people to

1059
01:16:22,600 --> 01:16:25,800
borrow and everything else.
But all that did is just, you

1060
01:16:25,800 --> 01:16:34,500
know, It pushed off and grew the
potential.

1061
01:16:36,200 --> 01:16:42,300
Downside, you know, well in
advance if you do, you have to

1062
01:16:42,300 --> 01:16:48,700
take the time to get better.
Or you'll get sick again and

1063
01:16:49,100 --> 01:16:51,800
nobody wants to.
It's not it Defender tries to

1064
01:16:51,800 --> 01:16:55,000
put it off but you know
governments.

1065
01:16:55,000 --> 01:16:58,000
They don't want to hear that.
People don't want to say okay

1066
01:16:58,000 --> 01:17:03,700
you mean I how sick am I?
What is there something else I

1067
01:17:03,700 --> 01:17:05,000
can do?
You know?

1068
01:17:05,200 --> 01:17:08,800
Well that's the way they treat
themselves medically.

1069
01:17:09,200 --> 01:17:10,900
What would you expect?
Financially?

1070
01:17:11,000 --> 01:17:13,500
They're worse.
You can't tell these people.

1071
01:17:13,500 --> 01:17:16,600
They believed everything.
They're told now we Got to a

1072
01:17:16,600 --> 01:17:20,900
point where, you know you
totally ordinary citizen.

1073
01:17:21,000 --> 01:17:23,800
We are going to have to go
through a full scale depression

1074
01:17:23,900 --> 01:17:27,500
in order to get better.
It's and whether we get better

1075
01:17:27,500 --> 01:17:29,500
or not, we're still going to
have one.

1076
01:17:29,800 --> 01:17:32,500
Because that's the end result of
all this.

1077
01:17:33,100 --> 01:17:37,000
Why?
Why can't that he do something?

1078
01:17:37,100 --> 01:17:39,400
They've been doing something for
100 years.

1079
01:17:39,500 --> 01:17:43,400
You just didn't know it and
that's why we're in this fix.

1080
01:17:46,300 --> 01:17:51,600
This next, what I'm going to say
next year, I want to make damn

1081
01:17:51,600 --> 01:17:54,300
sure everyone out there.
Listening is me, this is me.

1082
01:17:55,900 --> 01:18:00,800
this is not anything, Kelsey has
said or anything else but it's

1083
01:18:00,800 --> 01:18:11,700
what I feel in my in my core
This is the first in.

1084
01:18:11,700 --> 01:18:20,000
What will be a long?
Series of cataclysmic changes to

1085
01:18:20,000 --> 01:18:26,600
the economy.
Prepare and prepare and prepare.

1086
01:18:29,400 --> 01:18:33,200
Get your Lifeboat together, get
food in your house, get your

1087
01:18:33,200 --> 01:18:39,600
reserves on hand, do whatever it
is, you need to do to get ready.

1088
01:18:41,600 --> 01:18:46,700
Go see Marcelo.
Down at food storage prep in

1089
01:18:46,700 --> 01:18:48,200
South.
Jordan Utah.

1090
01:18:48,900 --> 01:18:51,900
I had him on the podcast, he he
told you what?

1091
01:18:52,800 --> 01:18:55,400
What?
Hyperinflation looks like.

1092
01:18:55,400 --> 01:18:59,000
He told you, what depression
looks like start reading your

1093
01:18:59,000 --> 01:19:02,100
grandparents journals and
figuring out how you how they

1094
01:19:02,100 --> 01:19:06,100
got through it.
It is coming it, there's no.

1095
01:19:06,100 --> 01:19:11,400
Look, whether it happens today
tomorrow, a year from now, 10

1096
01:19:11,400 --> 01:19:17,200
years from now, Depression is
the natural result of what we

1097
01:19:17,200 --> 01:19:21,700
have been doing.
And as I said at the beginning,

1098
01:19:22,200 --> 01:19:26,200
I questioned, you know, maybe I
didn't know as much as I

1099
01:19:26,208 --> 01:19:28,600
thought.
I knew about economy and I'm not

1100
01:19:28,600 --> 01:19:32,300
saying, I still know a lot about
the economy but I know enough

1101
01:19:32,400 --> 01:19:37,100
that you can't continue to print
money and have it turn out good

1102
01:19:37,100 --> 01:19:40,600
in the end.
It just does not work in a

1103
01:19:40,600 --> 01:19:44,800
capitalist system and we still
do have a remnants of a

1104
01:19:44,808 --> 01:19:47,400
capitalist system.
I'd make an argument.

1105
01:19:47,400 --> 01:19:49,100
We haven't trapped practiced,
true.

1106
01:19:49,200 --> 01:19:53,400
Ilysm in about a hundred years
but there's enough there that

1107
01:19:53,600 --> 01:19:57,700
that it will still have the same
result and printing all that

1108
01:19:57,700 --> 01:20:05,400
money. the other thing I'm going
to say, Take what the experts

1109
01:20:05,400 --> 01:20:08,600
say with a great big grain of
salt.

1110
01:20:10,000 --> 01:20:15,000
Go back to Hurricane, Katrina.
They told everybody get to the

1111
01:20:15,000 --> 01:20:22,600
Superdome And everyone went.
And the horror show that

1112
01:20:22,600 --> 01:20:28,000
happened.
After that was so bad that the

1113
01:20:28,000 --> 01:20:31,800
Saints owner, Mickey Loomis
called in a priest.

1114
01:20:33,200 --> 01:20:37,600
To basically exercise the whole
Superdome rapes, murders

1115
01:20:37,600 --> 01:20:41,700
beatings whatever.
But people listen to The Experts

1116
01:20:44,600 --> 01:20:48,000
The same people who created.
This mess are the ones trying to

1117
01:20:48,000 --> 01:20:50,000
tell you that there's nothing to
see.

1118
01:20:51,500 --> 01:20:54,000
And to move along and maybe I'm
wrong.

1119
01:20:54,000 --> 01:20:56,600
If the spirit is telling you
something different go with

1120
01:20:56,600 --> 01:20:59,700
that.
But if the spirit is telling you

1121
01:20:59,700 --> 01:21:02,300
something is wrong, listen to
that.

1122
01:21:02,700 --> 01:21:09,200
And then prepare because it's
is, as sure, as I know gravity

1123
01:21:09,200 --> 01:21:13,100
works at some point, this all
comes to you.

1124
01:21:13,400 --> 01:21:16,400
We can't keep kicking the can
down the road and we've done

1125
01:21:16,400 --> 01:21:20,700
that for a long time in my
lifetime since the.com bubble.

1126
01:21:20,700 --> 01:21:25,000
Burst, we have just kicked the
can down the road and we have

1127
01:21:25,000 --> 01:21:28,400
exacerbated the problem to the
point now, Now.

1128
01:21:29,500 --> 01:21:32,100
Where I believe this next
collapse.

1129
01:21:33,800 --> 01:21:40,600
Will be biblical in nature.
Please please, please prepare.

1130
01:21:41,600 --> 01:21:44,700
Now Kelsey, if you think I was
hyperbolic there, if you think I

1131
01:21:44,700 --> 01:21:47,900
was off base somewhere, please
push back on me on that.

1132
01:21:49,100 --> 01:21:54,300
I don't feel that at all.
I like I said before, I feel

1133
01:21:54,300 --> 01:22:00,900
that things are out of control.
In terms of being able to manage

1134
01:22:00,900 --> 01:22:05,900
it very well and have been for
quite a while and it's It's a

1135
01:22:05,907 --> 01:22:09,700
matter of time but we're
probably much closer to this

1136
01:22:09,700 --> 01:22:16,400
point than farther away from it.
And and again when you remember

1137
01:22:16,400 --> 01:22:24,000
that, the effects of inflation
are cumulative and unpredictable

1138
01:22:24,800 --> 01:22:28,500
as well as becoming more
volatile every time there's a

1139
01:22:28,500 --> 01:22:31,900
crisis event.
It's worse than the last one.

1140
01:22:32,800 --> 01:22:37,300
And it will be more and more
difficult to sweep it under the

1141
01:22:37,300 --> 01:22:40,300
rug.
So I and I agree with you.

1142
01:22:40,300 --> 01:22:43,700
Is the one one thing that
definitely is clear, is whether

1143
01:22:43,700 --> 01:22:49,000
it happens next month or next
year, whatever it could very

1144
01:22:49,000 --> 01:22:55,300
well happen tomorrow versus a
year or two from now, but it

1145
01:22:55,300 --> 01:23:01,400
will be that much harder to come
out of it because once it does

1146
01:23:01,400 --> 01:23:04,500
occur.
We'll probably stay there for a

1147
01:23:04,500 --> 01:23:08,200
decade or two.
We have thoughts that it will

1148
01:23:08,700 --> 01:23:15,500
ever get better, you know.
I remember when 08 happened.

1149
01:23:21,100 --> 01:23:24,200
I had a lot of free time on my
hands so I read a lot about

1150
01:23:24,200 --> 01:23:27,700
economy.
And I remember when I read the

1151
01:23:27,700 --> 01:23:31,500
last book on it and I just kind
of shut the book.

1152
01:23:31,500 --> 01:23:36,200
I remember thinking, I am more
scared of the feds response than

1153
01:23:36,200 --> 01:23:40,900
I am to the crisis itself.
And I think because we've kicked

1154
01:23:40,900 --> 01:23:44,700
the can down the road so long
that's why it's going to be a

1155
01:23:44,700 --> 01:23:49,400
decade or two.
I think of Devastation.

1156
01:23:49,500 --> 01:23:52,400
I don't know how else to put it.
I know I keep using words like

1157
01:23:52,400 --> 01:23:55,400
that and I'm trying to be
measured but it's really what I

1158
01:23:55,407 --> 01:23:59,200
feel at my core and if I'm wrong
you'll never meet a man who's

1159
01:23:59,200 --> 01:24:04,500
going to be happier to be wrong.
Then I will be Well, you eat

1160
01:24:04,500 --> 01:24:10,400
what you said there about their
response of the fed and the

1161
01:24:10,400 --> 01:24:15,500
government is exactly the
unknown and the bigger

1162
01:24:15,500 --> 01:24:19,700
vulnerability we have because
that's the reason the depression

1163
01:24:19,700 --> 01:24:23,900
lasted, as long as it did
because the government resisted

1164
01:24:23,900 --> 01:24:28,100
the economy's effort to cleanse
itself, and if they had let that

1165
01:24:28,100 --> 01:24:31,900
run, instead of trying to fight
it, it would have worked itself.

1166
01:24:32,000 --> 01:24:35,600
Self out much better.
So, the response.

1167
01:24:36,000 --> 01:24:41,600
Historically, speaking tends to
be that, whatever the problem

1168
01:24:41,600 --> 01:24:49,700
is, it will be worse and last
longer because of interference

1169
01:24:49,700 --> 01:24:52,900
and intervention by the Federal
Reserve and the government.

1170
01:24:55,000 --> 01:24:59,400
What scares me the most on this
is that really the only way I

1171
01:24:59,400 --> 01:25:05,500
could see out of this Is another
horror show, right?

1172
01:25:05,500 --> 01:25:10,000
Which is a digital dollar?
Right.

1173
01:25:10,400 --> 01:25:15,000
A currency a currency.
Yeah, a Currency Reset.

1174
01:25:15,800 --> 01:25:20,800
But in doing just a little bit
of research, every time that's

1175
01:25:20,800 --> 01:25:23,900
been done in any other part of
the world, you can Bank on the

1176
01:25:23,900 --> 01:25:28,900
dollar you have now being 40
percent of its value.

1177
01:25:30,400 --> 01:25:36,700
Before the reset.
Yeah, there's there's so many

1178
01:25:36,700 --> 01:25:41,200
speculations about these things
and on a functional basis, they

1179
01:25:41,200 --> 01:25:48,100
don't make a lot of sense.
You know, one thing is that

1180
01:25:48,100 --> 01:25:53,800
currently we do have a
relatively stronger dollar and

1181
01:25:53,800 --> 01:25:56,700
I'm not talking about where it
is over the last hundred years.

1182
01:25:56,700 --> 01:26:04,400
But the another thing is that
regardless that what are you

1183
01:26:04,400 --> 01:26:06,400
going to do?
We are still coming to people

1184
01:26:06,400 --> 01:26:10,000
and saying, here's something
that's worth something that has

1185
01:26:10,000 --> 01:26:13,300
no power, right?
And it's better that what we did

1186
01:26:13,300 --> 01:26:16,500
have, which used to have value,
but doesn't yeah.

1187
01:26:18,700 --> 01:26:20,600
And I'm like, What's the
difference?

1188
01:26:21,300 --> 01:26:25,500
What do I can't now.
There's a difference between

1189
01:26:25,500 --> 01:26:29,800
accepting that being forced to
accept, right?

1190
01:26:30,600 --> 01:26:34,100
Okay, so we don't know how
that's going to play out, you

1191
01:26:34,100 --> 01:26:38,500
know, we don't know what
specifics there would be and

1192
01:26:38,500 --> 01:26:46,300
what it would be asked to do in
order to save our economy.

1193
01:26:49,600 --> 01:26:51,500
They're going to, they're going
to do something.

1194
01:26:51,500 --> 01:26:55,200
Now again, if the dollar is an
issue or maybe they just have a

1195
01:26:55,208 --> 01:26:59,400
plan that they feel is going to
give them more control and

1196
01:27:00,600 --> 01:27:05,500
finding a way to put it in place
is the issue.

1197
01:27:05,500 --> 01:27:08,300
Not so much that they have to
come up with an alternative.

1198
01:27:09,300 --> 01:27:13,800
No, it's more concern of how can
we get this in place?

1199
01:27:14,700 --> 01:27:19,800
And well, let's you know,
manufacturer and event.

1200
01:27:20,100 --> 01:27:24,900
Let's create a problem and and
there is some historical

1201
01:27:24,900 --> 01:27:29,900
precedent for some intervention
there, you know, there's there's

1202
01:27:29,900 --> 01:27:35,400
some financial and economic
events that It's kind of funny

1203
01:27:35,400 --> 01:27:39,700
how the drawing plans were on
the board before the event for

1204
01:27:39,700 --> 01:27:43,200
the solution to the problem that
occurred, right?

1205
01:27:44,100 --> 01:27:52,900
So yeah, we'll have to see
Kelsey, dude, I appreciate it so

1206
01:27:52,900 --> 01:27:54,000
much.
Is there anything else you

1207
01:27:54,000 --> 01:27:55,700
wanted to say before we wrapped
up?

1208
01:27:56,200 --> 01:27:59,500
No, I think that's good.
I think we covered the things we

1209
01:27:59,500 --> 01:28:01,500
wanted to.
I feel pretty good about it.

1210
01:28:01,900 --> 01:28:05,100
Fantastic.
Well, dude, I have a Wind that

1211
01:28:05,700 --> 01:28:08,900
not you're already in my contact
list, but I have a feeling that

1212
01:28:08,900 --> 01:28:11,400
we're going to be talking a lot
more in the coming weeks.

1213
01:28:12,100 --> 01:28:14,400
Appreciate it very much.
I'll look forward to it.

1214
01:28:14,600 --> 01:28:31,600
Alright, bye everybody.
You're listening to the Mormon

1215
01:28:31,600 --> 01:28:33,300
Renegade podcast.