Investors are FLEEING the Big Banks… They Know What’s Coming Next 2023-09-21 01:01

Ladies and gentlemen, welcome to Man in America. I'm your host, Seth Hohaus. So we've been tracking the process of what's happening with the banking industry, with the dollar, with BRICS, and there's something, it's funny because I never imagined before getting into this show and doing Man in America that I'd be so interested in these global economics and looking at what's happening with the dollar and the banking system. But the more that I've learned about, the more I realize is that it's actually, it's the money supply that underlies everything. It's the money that gives the elites control over us. It's the fiat, the Babylonian magic money system that is the foundation of the slave world that we live in. And so tracking the collapse and the plans of the financial system to me is one of the most important topics to focus on. And so there's been a lot of recent information that's come out lately about banks closing down, not bank failures, but bank branches closing down, layoffs, and a lot of really, really concerning economic data that's come out about delinquencies on auto loans and house loans and inflation. So a lot of this is mixing together. And so joining us today is Kirk Elliott, my good friend for an economic update and looking at what's happening with the economy right now, what's happening with the dollar, what's it going to look like heading into 2024. So folks enjoy this economic update with Dr. Kirk Elliott. Kirk, it's always good to have you on. Thanks for joining us today. Of course. It's so great to be with you as usual. So there's, as usual, a lot going on. And I know that when we saw Silicon Valley Bank and some of the other banks that were collapsing earlier this year, and then they came out and they assured us that the banking industry is fine, it's safe again. I think that most people, especially these days, whenever the government comes out and says, hey, don't worry about it, it's fine, it's safe and effective, whatever they tell us, we know they're usually lying. And so you sent me a couple of different reports, whether it's layoffs and some money leaving the banking system that are honestly alarming. And I think that are really kind of foreshadowing what's to come. So let me go and just pull up this first one that you sent, which is about the Wells Fargo and this big new wave of layoffs coming. So before we jump into this, how big of a bank is Wells Fargo? It's like if Wells Fargo has massive layoffs, what does that mean? Well, they're they're top five in North America. So you'd have JPMorgan Chase, Bank of America, Citibank, and then actually Wells Fargo, they'd be top four and then U.S. Bank after that. So they're massive. I mean, absolutely massive. So when you think about the problems that they're going through, because I get these comments all the time, say, Kirk, boy, the banking sector, we should maybe invest in their stocks, right? Because as interest rates go up, they're going to be so much more profitable. Well, you know, intuitively, that kind of makes sense until you go the next step, which is people are tapped out, right? People that were living kind of hand to mouth in America right now, one to miss, you know, one to two missed paychecks away from having to file for bankruptcy is the norm. So when interest rates go up, what happens is there's tons of default, right? People just stop paying their loans because they can't pay for it anymore. So so rising interest rates do impact banks profitability when people have a lot of disposable and discretionary income, right? Because, yeah, so interest rates go up. We still have money left at the end of the month. We can go out and go out to eat, go to movies, whatever. But but when people are just strapped every single month and rates continue to go up, it actually has the opposite impact on banks than than prior to people being tapped out because people just simply stop paying their loans. And what's the first thing that they stop paying? It would be like credit card payments. You know, the last one of those bills that people would ever be default on would be like mortgages because they don't want to get they don't want to get evicted, right? They don't want to get booted out of their home foreclosed on. So so like your credit cards, your home equity lines of credit, your your car payments, personal loans, things like that usually go first. You know, it's just like just let them go. House is last. But what we're seeing right now is with adjustable rate mortgages coming due. Right. And over the last 12 months, mortgage interest rates have more than doubled, literally more than doubled. So over the last 12 months, when somebody said, man, I've got this great arm, it's like a three and a half percent or three percent. And now that's coming in at seven. It's like my payments is doubled. Right. So so people are foreclosing, which puts downward pressure on stocks, on banks, and they're just simply having to lay lay people off like this article about Wells Fargo, top four bank in North America, laying off tens of thousands of people. In fact, earlier this year, they actually laid off their entire mortgage division. They just shut it down. It's like no more mortgages. We're getting out for a while until this mortgage mess kind of clears itself up. But this isn't just specific to Wells Fargo's mortgage division. This is the bank as a whole is laying off. Well, I think they've laid off 40000 people in the last two years alone, which is a lot. But they're they're laying off thousands of people at a shot now. One thing I want to throw out there is I was actually pulling up while you were talking. Here's a stat you talk about delinquency. So most people have if they're going to have their credit card, give your house loan and your auto loan. So here what they're saying is that auto loan delinquency rates are now at their highest level since 2008. So what it says here, it says that from for Q2 2023, the auto loan delinquency rate in the U.S. jumped to 7.3 percent up from 6.9 in Q1. Moody's said the auto loan delinquencies will hit 10 percent in 2024. Right. So this is the already it's the highest since 2008. And here's they've got a graph kind of looking at that. But this you mentioned it with the housing. But what's the what's the the bigger picture? What's the bigger thing that's happening here? Because if someone is the people need their houses, they need their cars. Right. So if almost 10 percent of auto loans have become delinquent, which means that those cars are probably going to be seized or they're going to have a repo man like, OK, stop paying your car bill. So that's why it's easy to get a car loan. Right. It's because they'll just come take it back if you don't pay for it. So what's this telling us? Well, it's telling us that that Americans are getting squeezed, right, just squeezed out of buying anything. But that if you start to connect these dots, let's say you were a banker, I were a banker and I were making decisions and you knew that one out of every 10 people that you gave a loan to is just not going to pay it back. Right. So what is that going to make you do? It's like, all right, let's say phase. Well, first thing that you do rather than raise rates would be let's actually just jack up the lowest credit score that we'll take. Right. So if you want to get a loan, they'll say, OK, no loans, less than 800 credit score, FICO score, because at least that way, you know, you're getting the cream of the crop, the best of the best. Right. The people who aren't going to default. Well, then after you've done that, if it still doesn't shore things up, you start to jack up interest rates to make yourself more profitable. Right. So you're going to make it harder for people with good credit to get a loan and you're going to make it more expensive for people with bad credit to get a loan. I mean, that's that's net capital outflow that's going to start leaving that bank because people just aren't getting really good credit scores right now. I mean, here's the thing, for example, this is a couple of years ago. The well, this is maybe more than a couple of years ago, maybe five years ago. The last loan that I had was my student. There's the last thing that I had to pay off. So I paid the dumb thing. What happened to my credit score when I paid it off? I had zero debt left. Right. Nothing. I didn't know anybody a dime. My credit score went from like eight hundred and thirty nine to like seven hundred and ten. It's like, what? Wait a second. I don't even I I paid everything off. I'm a better credit risk now. But the banks don't look at it that way. It's like, well, you have no credit, actually. So so here's where those credit scores are kind of dumb and silly to begin with. Right. It's like we don't want you to have too much credit. We don't want you to have too little. We just want you to be an economic slave to us and dependent on your credit score and somewhere there in the middle. Right. That's how the credit scoring system works. But but here's where only people with amazing credit are going to be able to get loans at a decent rate. Everyone else, their their rates are going to start jacking up. That means not many people are going to be able to get loans. That's going to put even more of liquidity crunch on the banks moving forward and the people who need loans the most. And when you think about it, people with great credit, a lot of times business owners, they need an inventory loans, loans for expansion of their companies or whatever. Well, they're not going to get it unless they have the the cream of the crop. Then people who really need money to to live on, to survive, just to get through month to month, need a line of credit, a personal loan, something, anything just to make ends meet, to get through and tell them maybe find another job or whatever. Well, they're not going to get anything. See, this is where it's forced. The current markets have forced banks to actually go down these two paths, which are both paths to almost banking extinction. Which is just kind of crazy because we think of the banking industry is almost this thing that just is always there. It's like, oh, OK, it's it's the bank. It's always going to be there. And what's also interesting is this whole discussion on inflation, which I was reading an article by Peter Schiff recently about how inflation is that he expects it to go wild in twenty twenty four. And it made a good point in saying that, you know, you look at the cost of a product, right? We're seeing now record high gas prices coming back. But even just things that like if I look at things I'm buying now, say even a case for my laptop that may would have been twenty bucks in the past, it's all of a sudden forty five dollars. I'm seeing that all over the place where I I kind of do a double take because I haven't checked the price on things in quite some time. And like, wait, why is that so expensive? But one of the points that Peter Schiff was making is that a company has its its costs, right? Well, the money is a cost. Most businesses, especially bigger businesses, operate on money that's being lent by the banks, right? Against their receivables or whatever the relationship is. So as money gets more expensive, just the raw product of this money, they're going to have to increase the price of what they're selling. And so but then the price what they're selling is then more expensive to the consumer. But the consumer can no longer get that new credit card to, you know, to kind of keep going. And gas is now up and it just seems like it's really a downward spiral. But something else in the article that you sent me, though, was about the actual bank closures. So they're laying people off so that they're saying is that in the past six months, over a thousand bank branch is closed. And so this is in the past six months, over 200 for PNC, 185 US Bank, 160 for Wells Fargo, 54 for JP Morgan. And this is a tweet from someone that the conclusion that this person is coming to is liquidity crisis incoming in all caps. So what's that mean? I would I would actually adjust the conclusion to actually be worse than the liquidity crisis. I would say you play this out. Let's just say you and your wife are sitting there at the dinner table and you've got problems, right? You've got economic problems. You're you're should we file for bankruptcy? We just don't have enough money. Right. What do you do? The first thing you do is start slashing your expenses. It's like, OK, let's cut this out. Let's not go out to eat. Let's let's, you know, get get away from our big cell phone bill. Let's let's go to a smaller plan. Let's get rid of all the cable or satellite that we have and go down to the smallest plan or get rid of it altogether. Right. You start to cut back is the point because it's not like, well, we could go get a second or third or fourth job each. Right. So usually there's not much you can do on the revenue side unless you add another job. So people will cut expenses. See what what hits the news when it comes to banks is actually a failure, like when Silicon Valley Bank went under, when First Republic went under, when Credit Suisse went right. So so what we're seeing here, though, is not bank failures. This is why it hasn't hit the news yet. What we're seeing is the precursor to going bankrupt. They're cutting expenses because these are all banks where they're just shutting down branches. They're getting rid of their expenses so they can continue to make ends meet. To me, that's worse than the liquidity crunch. This is like these banks, if they didn't close down branches, they're probably going to file for bankruptcy. See, that's always where it comes prior to the worst of all case scenarios is. So I wouldn't be surprised if you see one of these banks over the next six to 12 months actually go under. Right. Because what they're doing right now and these aren't small, right. These aren't these aren't like, oh, we closed a branch. Some of them closed over 200 branches. Right. I mean, this is big, big time cost reduction, cost savings. And so hasn't hit the news yet. But but it's much wider than what that that little post is showing, because what's the top of that post? Eleven hundred and forty four banks. There's not even close to that on that list. These are just a smattering of some big ones. Right. But so this is widespread throughout the entire country. There's eleven hundred and forty four branches that have shut their doors, like literally shut their doors. They're cutting expenses to make sure that they can stay in business another couple of days. Right. That's what that number tells me. Now, what about the money leaving the bank? So this is something I need you to explain to me, because as that article continues, we have a different graph to look at as well. It goes in and talks about how almost one trillion in assets sold, not purchased across these four massive banks, Citadel, JP Morgan, Wells Fargo, Wells Fargo and BOA. So what does that mean that almost a trillion dollars in assets sold, not purchased? So that's just in this part of the same article. This is just the last six months as well. Right. Since Silicon Valley Bank went under. So what that tells us is Citadel securities. Forty five billion dollars of funds have left that fund rather than gone in. So it would be a positive if people are investing, they're growing their asset base. No, it's not that it's the opposite. This is money leaving the system. JP Morgan. I mean, look at that. Three hundred plus billion. Wells Fargo, you know, 80 something billion. Bank of America, hundreds of billions. I mean, just those four. A trillion dollars in just those four of money that's left the system. So if it's left the system, those are deposits leaving. That's people having to take money out to live on or or it's the Fed pulling money out of the system so that capital isn't there to lend out. Right. Because these are all big. These are all Federal Reserve banks. And there might be just be pulling capital out of the system in preparation for a digital currency because you can't have paper currency and digital money running concurrently with, you know, parallel to each other. You've got to get rid of one for the other one to be able to give room for the other one to be born. Right. So so this, I think, is a double edged sword. Part of it is probably just the Fed pulling money out of circulation to get rid of paper currency altogether. And the other one is actually people just having to withdraw money so they can live on so they can pay the bills. And it's not being redeposited back because it's simply just not there. So so this to me shows capital crunch. This shows me a liquidity crisis more than the previous example did, because this is actually M2 money supply. This is M2, which is checking accounts, savings accounts, money markets that are in a bank. It's the highly liquid stuff. Right. That's all leaving the building. It's gone. These banks are shrinking in size. That's that reeks of a capitalization issue where they don't have enough money, especially when you've got defaults now hitting loans across the board. There's money net basically withdrawals rather than net deposits. This is a sign of a massive danger. Thin ice moving ahead. And so do you think that so I'll pull back. So I have a question about it in comparison to something else that I want to pull up. So what you're saying, almost a trillion in assets sold and not purchased. So let's just say that hypothetically that I've got a million dollars with Citadel Securities and they're managing that money for me. And they might let's just say they have that one hundred thousand dollars or so that million dollars they have it invested in Apple stock or whatever it is. Right. And so what this means in this particular instance is that I call them up and I say, OK, sell my position in Apple and I pull all that money out. Right. So it's kind of like it's it's the deposits and the checking and the money, but also the assets of the people. This is people pulling their money out of this system. Whereas. So we also have let's see this right here. I'm also coming up with Twitter. This is from the Kobasi. Is it Kobasi? I'm not sure how to pronounce that. The Kobasi letter, which says since the Fed started. Actually, OK, this might be just before that in terms of numbers. It's almost a trillion dollars again. So since the Fed started raising interest rates in March 2022, a record eight hundred and sixty two billion in bank deposits have been withdrawn. The previous record was 70 billion in the 2008 financial crisis. That means that 12 times the deposits leaving the banks in 2008 have been withdrawn in the last one and a half years, all while the regional bank crisis led to the second and third largest bank collapses in U.S. history. So here's a graph. And I apologize for the audio listeners only, but this so that green line is showing the change in bank deposits from peak. And it's going back to 1973. And you can see highlighted and they're kind of sure there's those gray lines, I think, are showing the different financial crises where you see that a financial crisis is always kicked off or in the middle of you have money leaving the banking system. You can see that within within the decline that happened in 2023. It's like the whole thing just fell off of a cliff. I mean, that to me is like that's a that's bad news, right? It is to me that chart for all those who can't actually see it because it's audio only. It looks like a side view of the Grand Canyon, right? It's like this flat top. It's pretty static for the last 40 years. It's just kind of mainlining. It's just kind of this there and you have blips every once in a while. And then it truly is an order of magnitude just falling off a cliff. Right. So so higher rates are changing the world. Yeah. Higher rates are changing the world. This is money leaving the system. Why? Because people need money to live. Right. They're pulling out. They don't have excess money, actually, to actually start having a savings account and things of that nature, having, you know, excess in your checking account. This is net withdrawals where where there's more money coming out than is going in. Well, when you add that to banks, investments aren't doing very good, right, because they invest in the same thing we do. They own a ton of commercial real estate, residential real estate, companies, stocks, bonds, mutual funds. It's like, ooh, especially bonds. So bonds, the value of those bonds comes down as interest rates rise. That portfolio is just just falling to the bottom of the ocean. Right. Real estate is tanking. Commercial real estate's even worse than residential real estate because it precedes collapses in commercial real estate, always precede collapses in residential real estate because that's the ones that have the jobs. Right. So so you're seeing all of this starting to happen at the same time. No wonder people you've got people leaving their banks, taking money out, plus the investments that the banks actually have themselves. It's a double whammy. That's why I think banking failures are right underneath our nose. I think we're going to see just like CDC and World Health Organization are talking about COVID 2.0. It's going to be worse than the first one. Right. We have to be aggressive on fighting it. You know, it's coming. Travel restrictions, shelter in place, masks, blah, blah, blah. Unless you're Deion Sanders at the University of Colorado saying, hey, see you. If you actually have mask mandates, you're not going to comply, just so you know. And what are they going to do at that point? You know, number one, you know, most highest rated college program in football for TV wise. I mean, it's all the excitement. It's all the rage. And the university is bringing in a ton of money. And finally, you've got the coach. It's like, we're going to say no to these mask mandates. Right. So what what happens is in all of this, you start to see revolt. You start to see new ways of surviving and thriving, because if you have banks that are on the poise, you know, right on the precipice of failure, falling off that cliff. What are you going to do, Seth, in your own mind? Right. Just like every viewer out here. It's like, is my bank next? Is my bank on that list? Should should we actually minimize our cash position? Let's start pulling some out. See, it's a snowball effect that starts to happen, just like it's the snowball effect. And I know I use this illustration of college football because I live in Colorado and we're glad that see you has has, you know, finally a winning program. But here's why perception is reality. So college football changed its rules. We're now college players can make money based on advertising, based on their name. Right. So like the the quarterback of CU now drives a Maybach made three point eight million dollars right in college. So what's that going to mean moving forward? Are you going to want to go to some small, cool school where your coach isn't doesn't have the PR that that Deon Sanders does? It's like, no, I bet next year is going to be the highest recruiting year ever. The best players ever, because they've got this coach that's in the limelight all the time and they all want to make money. So when you've got these stories of bank failures, it's perception is reality. People are going to say, oh, I'm going to I I got to get out. I've got to get I've got to go into something good. And now you're seeing the AI frenzy start to kind of hit the skids a little bit. Right. It's like, is this a bubble that's about to burst? People are going to start to pull out. Here's where these banks malinvestment when added to the actually withdrawal of funds from those accounts. I think banking crisis 2.0 is going to be infinitely worse than what we saw in March. So one question I'd love to hear your thoughts on is so I interviewed Cliff High recently, who's I'm not sure if you follow Cliff, but he's he's a genius. He has some wild ideas, but he's a genius. And I love talking to him and following a lot of what he talks about. And we're talking on this. And I mentioned I may have even brought that exact chart that I showed you this one, which showed I think I lost the place. That's OK. I'll go back to it. But the chart that showed the money leaving the banking system and talked about how nearly a trillion dollars had left. And he made a really good point. We said, look, you kind of paraphrasing paraphrasing like every dollar that you put into a bank. So let's just say that was a trillion dollars that left every single one of those dollars. OK, we look at the requirements. So that one dollar might actually be turning into a hundred dollars or a thousand dollars within the banking systems. But then you get into that. OK, that's at the fractional reserve level. But then you get into the derivatives. Right. So the money coming off of that. So it's almost like in the same way that they've taken our money and they've taken a dollar in the bank and turned it into probably ten thousand dollars worth of derivatives and all kinds of crazy Babylonian money magic. That's the point that he made, because it's not just a trillion dollars has left the bank. That's a trillion dollars. They can't use their system to turn into 10 trillion, 30 trillion, 100 trillion, et cetera. Right. Because he was like, it's way more significant than people think. Yeah. So when you look at the amount of debt, like the total national debt of the United States is like 32 trillion. That's dollar for dollar. Right. That's money that we actually went into debt with. But banks highly leverage derivatives debt to make it real simple. Just say derivatives debt. It's like leverage to debt. It's leveraged at about 20 to one on average. Right. So which means for every let's say you were betting that the stock market was going to go up and it's leverage 20 to one. But the stock market actually goes down five percent. So if it's leveraged 20 to one and it went down five percent, you just lost 100 percent of everything you put in. Right. It's five times 20 is 100. So if it goes down 10 percent. Right. And it's like, do you leverage 20 to one? You just lost 200 percent of what you got put in. You have a margin. Right. Well, at some point. This we have how much derivatives debt do we have globally? It's hard to measure it because it's so much, but it's somewhere between three and seven quadrillion dollars with a Q. Well, that's way more. That's like a thousand trillion is a quadrillion. I mean, that's a lot. Right. So that's our total derivatives exposure globally is three to seven quadrillion. I tell you what, when that bubble burst, there is no bailout in the history of the world that could actually bail that out. That's a that's a system that can't be bailed out. It's like complete. Collapse of an entire monetary system, which is why I think the banks now are actually betting against central banks and betting against the U.S. dollar, which has all this debt, looking more towards BRICS nations, looking towards central bank digital currency as a way to hopefully fix this stuff. So when you to me, I think the worst there's two really bad things that are going to hit the banking sector in the U.S. economy moving forward. Number one, it's a housing collapse for the reasons we just discussed. Number two, inflation is not debt. True, inflation is not dead. We're going to see a reemergence of probably within months because Biden basically got rid of our strategic oil reserve. So he's been spending it, using it. Right. So we haven't had to buy oil for a while to fulfill that for a long time. Well, now it's almost empty because he's he's used it all. So now what? Now Saudi Arabia, I think, is is conducting economic warfare one on one in a brilliant way. It's like Trump playing chess. Right. That's them. It's like, OK, I always think in seven moves ahead versus Biden playing chess, not even playing chess. He's playing checkers. It's like wrong game. Right. So so it's like Saudi Arabia, when they realize we have to replenish our strategic oil reserves and they what are they doing? They're cutting supply, which is going to cause the price to go through the roof. So almost everything that we use in this country is has petroleum based products in it still. Right. So what's going to happen? Inflation is going to rear its ugly head. It's going to go through the roof. And that's going to be really bad for us because we're not oil independent. We're dependent on the Middle East for our oil. And when OPEC cuts production, the prices go through the roof. What's bad for us is really good for the BRICS nations. Why the BRICS nations? Because they just added six of the nine largest oil producers in the world into their consortium of countries. Right. So so when we're talking about economic bad news, the flip side of that coin is probably economic good news for the BRICS nations. This is why this is devastating to America moving forward, because our petrodollar status is gone. Our reserve currency status is gone. This is detrimental to Americans, but it's very beneficial to 50 plus percent of the world's population that are now in the BRICS nations. And they're winning this economic battle. They're winning this economic warfare game. And I hate to say it. They just are. So without I want to just kind of throw a quick caveat out there is that. I know you personally, right, and this is none of this is about fear mongering, because there's people that will say, oh, this is fear mongering and say the banking system is going to collapse. I mean, this is this is what I think of as just taking a sober look at the facts and the thankfully we're not trying to decipher some kind of wild theory that you can't really base in reality. And this is numbers that, you know, money and charts and numbers. It's one of the easiest things to look at without without having to pull emotion into it. And so when you look at all this together, and I'm going to be doing a show, I think later this week, I'm having John Perez on a good friend of mine to talk about real estate, because he's sold a lot of spent a lot of time in real estate. And we just went through the process of selling our house. We just closed on it, which was which was great. I think we got just out in the nick of time. And everything that I'm hearing, everything I'm seeing about the housing industry is showing that it's it's hit the peak and it's not it's sharply dropping. Inventory is drying up. No one's selling. No one's buying because the interest rates are too high. And so but when you add all this together, because this is this is the important part. And this is why I think it's I really enjoy having you on is because we'll take this complex stuff and kind of simplify it down into what does it mean? What does it mean for the average American that is already struggling, already struggling to, you know, pay for gas, pay for child care, pay for the taxes, pay for their their rent, which has gone up or pay for their mortgage, which is, you know, they maybe they bought a house and now they're a six percent right or five percent. So the average person is looking at this and they're seeing that, OK, these charts of delinquencies going up, these charts of money leaving the system, these indicators of the bank, you know, the banks are shutting the branches down. Are these indicators that you're seeing that are telling you that we're getting ready to again? I'm not sure the timeline is, but that basically all this is pointing towards something like 2008 crisis worse than 2008. I mean, what where is the ship going? I would say worse. It's going to be like 2008, except significantly worse. I because the magnitude of the downturn is so much bigger. There's so much money that's leaving. There's so much more debt now. Right. When you have raising interest rates and so much more debt, that's a multiplier effect. Right. That's not an additive effect. That's a multiplying effect. So I think what we're going to see is something infinitely worse than 2008 by I don't I don't know how much worse, just substantially worse where people after after this downturn is done, they're probably not even going to remember how bad 2008 was. It's like a distant memory. This one's going to be nasty. And the only reason I said I don't want to be a fear monger, I don't want to be a prophet of gloom and doom. I would rather everything else were different. Right. But but yet it's not. We're not the policymakers coming up with these policies that are actually causing this. We're just reporting on it and offering a solution. Right. So the solution is you get into tangible assets. It's not paper that do well during times of inflation. You know, bonds do horrible during times of rising interest rates, which is the mechanism to slow down inflation. You know, most equities don't do good during times of inflation. If it's the inflation that we're seeing by printing money so you can have a good inflation, a good inflation would be rising prices because the economy can sustain it and everybody's working. Right. That's actually means a growing economy. The kind of inflation that we're seeing right now is rising prices due to printing money like there's no tomorrow because Americans aren't funding it because there's wage reduction. So when wages don't keep up with the rising prices, that's stagflation. That's what we saw in the late 70s. That was like terrible. This one's worse than that. So if you had inflationary prices and your wages were keeping up with it, you wouldn't even know the difference. It's just a growing economy. That's not what we have now. The price discrepancy to wage discrepancy is at an all time massive chasm in between the two. And this is why I know that this is going to be significantly worse than 2008. Wages are not even close to keeping up with inflation. I guess that's what you're seeing, too. I was talking to a buddy over the weekend who's moving back to his home country in Europe. I know he loved it. He was like, why are you going back? And he goes, look, my fixed costs every month are $7,000. Heating and cooling, electricity, child care, property taxes. Those are the fixed costs every month. $7,000. He said, my wife and I both have to work full time just to get by. And that's what's crazy is that, I mean, growing up, it used to be that, let's just say that someone was making $40,000 a year. That was a healthy salary that you could raise a family off of. But now if you look at a lot of these costs, even someone that's making $100,000 a year as a household, obviously people can downsize and you can be living in a trailer and, okay, maybe your fixed costs go down and you can get by. But it's like, that's not how it should be in America, that the average person is having to live in a trailer to get by. But the price is just, they're just going up. Everything's getting more expensive. And so, do you think that how will the government counteract this? I mean, do you think that they're just going to keep printing more money? And as they print more money to try to inject money into the economy and make it seem like it's healthy, that that's going to further cause inflation to spur? Or what is the solution or is there no solution? Is the solution that the whole system has to break and something new has to emerge because it's at the end? I think that latter, that is the ultimate solution. They're just going to let it break because you look at the two ways that they can slow down inflation. Number one is jack up interest rates really high. So the cost of borrowing goes up so people can't afford to borrow and that will ultimately lower demand for things and prices come down. Well, you can't actually lower rates because that would cause more inflation. But if you raise rates too high and we have all this debt, it's a problem. But the worst problem is massive price increases. So they're going to continue to raise rates. The other way that they can slow down inflation is by stopping printing a money. Well, they're not going to do that. They simply won't because it's the only thing keeping the economy afloat right now, especially after the BRICS nations rising up are taking demand away from the US dollar is the world's reserve currency. And as the petro dollar, that means we have to print money to fund all of our expenditures. There's no built in demand. So they're not going to stop printing money. Actually, they're going to increase the printing of money and which means they're going to have to keep raising rates. To me, there is no solution other than just letting the system break and it's replaced with something else. And say, Kurt, that's so cataclysmic. That's like every reserve currency throughout the history of time has gone through this. They never last forever. You know, we've only been the reserve world's reserve currency since 1944. Prior to us, it was a British pound sterling. Prior to that, it was like the Dutch currency. Prior to that, it was like the Portuguese currency. I mean, so you go back in time, there's always been a reserve currency, but they always squandered their time in the sun, flood the markets with too much of that currency, and they have they're forced to change. We're just happy to be alive during that time. It's not that I'm trying to be a prophet of gloom and doom. I'm trying to explain reality of how macroeconomics works. We've got too much of our dollars out there floating around. The rest of the world no longer wants it. The only fix is to actually change the system and who the world's reserve currency is. That'll actually kind of fix the system. But who does that hurt the most? The people who are the world's reserve currency happens to be us. It'll change our way of life forever. Which is why once we understand that, we navigate through it by allocating properly to take advantage of those trends. That happens to be on this type of a scenario, tangible assets like silver or gold. But I would do silver. When we're not at this stage, like what we were just normal corrections in the past, stock market gets overheated, it corrects. We'll buy stocks on the big, huge dip like we could have in 2009, like we could have in 2002 after the tech stocks came down 80%, right? During Reagan years, during Trump years, the stock market boomed. And if you bought in on those dips, the fundamentals of the market would cause its growth. The fundamentals of this market are just fundamentally different. This debt bubble is global. It's not tied to just any one sector. It's not even tied to any one country. It's a complete system monetary change globally. And the only way to navigate through that kind of chaos is with gold and silver. It really is. I mean, throughout time, it's always been that safe haven investment. When everything else seems to be failing, people always go to gold or silver. That's why nations have fought over it. Why kings and kingdoms have fought over it, right? It's the pathway to peace in your financial portfolio, but it's not the financial peace forever. It's during times of transition, right? At some point, we'll lock in our profits, go back into something else. And maybe that's something else's stocks. Maybe that's something else's bonds and interest rates are sky high. We don't know. What we do know is that there always is an exit. We just don't know what it is until it's in front of us. And that's a really important point because I think most people that watch these interviews obviously know that you are a fan of gold and silver. But the question is like, okay, does that create this bias where the only solution you see is gold and silver, right? Because we want this to be a progress of what their position is. And I've heard some people telling me, say a year ago, people were saying, look, put money into real estate, right? Pull your money out of the system. And they're also recommending precious metals. Most people will at least have that as part of what they recommend, right? It's precious metals. But at that time, they're saying, look, put money into real estate, put money into real estate. Well, what we're now seeing is that real estate prices are dropping. Like imagine in 2007, someone was like, put your money into real estate. And you're like, oh, okay, great. I'll put half my portfolio into real estate. Look what happened. And so you've been following these ups and downs and these dips. And look, now, look, if it was 2009, you might come on the show and say, look, right now is the time to buy real estate. It's hit rock bottom 2009, 2010, like put money into real estate. It's only going to go up. So it's not that you're necessarily, it's more so that you're looking at the broad picture. And just through your own analysis, there's so many different investment vehicles that maybe made sense at different times in history. But because the whole system is breaking, and I think the key question everyone should be asking right now is, how can I ensure that I can maintain the current wealth that I have through the break of the system? Because a lot of people will lose everything when the financial system breaks. A lot of people lose everything when there's a collapse or a crash. So the question is how to make it through. It's really that what you're seeing just based upon historical data and the markets and the rates and everything is that there's just not a lot of options that you feel confident in even recommending. No, I mean, there, I look at the ratio, the ratio between silver and gold, how much silver does it take to buy one ounce of gold today? That's 80 something to one. So I'm a hundred percent into silver. When we come down 60 to one, that's 25%. We'll make my allocation under probably 75% silver, 25% gold. When we're at 40 to one means silver continually outperforming, we're 50, 50 right now. There's also times when we'll be a hundred percent gold. There's times when we're going to probably want to be in equities, right? During that time, like during the Trump years, the first three Trump year stock market was booming. During most of the eighties and nineties, gold and silver made no sense. Gold went from $250 an ounce in 1982 to about $258 in 2002. In 20 years, it went up $8. That's not a good investment, but what boomed during the eighties and nineties, the stock market went through the roof, right? So it's not that I'm against them and real estate went through the roof because interest rates are in decline, right? Interest rates went from a peak in 1983 to its low point about 11 months ago. So rates have been coming down for the last almost 40 years. So that meant real estate should have boomed. See, there's a time and a place for everything. And our goal is to be wise stewards with what God's given us, understand the trends so we can take advantage of them simply so they don't take advantage of us. That's our goal. Certain times in history require certain things to minimize your risk and maximize your return. Right now, because of where we are geopolitically, economically, stocks and bonds make zero sense to me. Gold doesn't even make sense because of where we are with the ratio between gold and silver. That's why I'm 100% silver, but it's not going to take much for silver to outperform 25%. And we start putting gold back into that mix. This is what we start helping people navigate through right place, right time, time to buy, time to sell, time to lock in profits, time to get out completely, right? There's a time and place for everything. This is what we excel at is that relationship piece of that. To me, Seth, the transactions are bookends. You have to buy to get into a trend, you sell to get out of one, but life happens in between those two transactions. That's where we thrive on letting people understand the why and why we do what we do because that piece starts to melt away the financial anxiety that people have. Once you understand why you're doing what you're doing, why you're positioned the way that you are, now you've won because you're in the right place at the right time and you understand why that's our goal as a firm. What's also crazy is that in this equation, you know, say 10 years ago, say you're sitting down with your financial advisor, they might be saying, okay, well, we've got stocks or real estate or, and they're looking just at the financial performance, but we've also got this whole other thing of our financial liberty and our financial freedom and the, you know, things like Central Bank Digital Currency or BIS, the Bank of International Settlements with a unified ledger, where say you put all your money into real estate, they've told us they're going to be putting those assets on the blockchain so they have a unified ledger so they can track it and control it. So that's the whole other aspect of this that I think a lot of modern day financial advisors don't even get is the fact that there's this new world order plan to enslave us and using currency as one of those tools for enslavement. So like that also, you know, comes into the equation. That's why for me, it's like, well, you know, if you're to the point where you're going and you're digging through my backyard to find my buried silver, it's like society is at a much worse place than I expect we'll get to, right. But, you know, can I expect they're going to seize a bank account or seize a 401k or, you know, force convert it into Central Bank Digital Currency? Absolutely. Right. So, I mean, what do you think about that? I think they will use a collapse like this manufactured or non-manufactured, just a regular natural collapse to bring in their change that they want. I mean, this is Rahm Emanuel, right? Never let a good crisis go to waste. So they're just waiting. Nobody would want what they would have, which is a government run digital bank that has the ability to cut you off from buying or selling. I mean, that's not a good selling point. I mean, it's awful. And nobody would say yes to that outside of a big, huge crisis where all of a sudden, even that makes sense. Exactly. Exactly. Well, Kirk, we're at the top of the hour. Just before we sign off, if folks, if you want to get a hold of Kirk or his team, we have a URL set up for you. It's just goldwithseth.com or just call 720-605-3900. If you go to the website, you just scroll down and there's just a form. You plug in your basic information. And how Kirk's team works is they set you up with one of his advisors, his wealth advisors, where they talk through things and really understand what's best for you because everyone has a unique situation. So again, it's goldwithseth.com, 720-605-3900. The information is also in the description. Kirk, it's always fun having you on. And it's great because I get so much positive feedback on our interviews. It's because I think that you're a regular. And actually for now, I think my goal is to publish every Wednesday is when this interview always publishes every Wednesday. But people love you. And I get a lot of positive feedback. People emailing me saying, look, I called Kirk. I talked to his team. They helped me. They even explained things to my husband who didn't want to listen. They helped the whole process. And it's nothing but positive comments, which is just, it's good. And that's why I'm comfortable and confident in working with you and having our relationship. Well, thank you for those kind words. I really appreciate them. And I love my team. I know I'm biased, but I have an amazing team that make me a better person. You do. Well, thank you, Kirk. I'll see you again next week.