Unlocking Insights and Unveiling Economic Realities

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Hello, everyone! Chris Martenson here, and welcome to a special episode where we’ll be “Unlocking Insights and Unveiling Economic Realities.” Today, we’re going to take a focused dive into the intricate world of finance, exploring key concepts and unveiling hidden truths that can impact your financial decisions.

In this episode, titled “Unlocking Insights and Unveiling Economic Realities,” I’ll be your guide through a thought-provoking discussion that goes beyond the surface. From dissecting market trends to demystifying economic jargon, we’re here to empower you with the knowledge needed to navigate the complexities of today’s financial landscape.

So, grab your metaphorical data paddle, join me, Chris Martenson, and let’s embark on this journey of unlocking insights and unveiling economic realities together. Whether you’re a seasoned investor or just getting started, there’s something valuable for everyone in today’s exploration of the dynamic world of finance.

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This is a companion discussion topic for the original entry at https://peakprosperity.com/unlocking-insights-and-unveiling-economic-realities/

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Until Something Breaks?

Thanks for this interview, Chris. I’m trying to better understand what might cause something to “break”. At around 8:08 in this video, you mention that asset prices will just keep getting propped up until that point. What type of event/trigger could cause that to unfold/happen, and is it fair to say that it would equate a housing crash/depression unlike anything people in our lifetime have ever seen?
Thanks for your time.

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Things that could cause a break:

  1. War in the middle east causing oil flows to be disrupted. The double whammy of oil shortages and sky-high prices are not things that the Fed's interest rate policies can address.
  2. The US goes forward with seizing Russia's sovereign reserves 'to give to Ukraine.' This leads to an exodus from US treasuries leading to higher interest rates and a weaker dollar that put the Fed in a box. Print more to buy those treasuries and drive the dollar even lower, don't print and watch spiking interest rates do things you'd rather not have happen.
  3. M2 growth going negative does what it always does (with a lag) causing a seizure of system liquidity...all those massive derivative bets are now lacking sufficient system liquidity to keep the whole charade going...something breaks...the FED has to print like crazy, but they can't keep it all together. Markets seize up, crash, The Great Taking gets activated...
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Have You Guys Heard Of “the Great Taking?”

I watch each of your discussions and I have yet to see evidence that you have read “The Great Taking” or have changed your investing habits to protect yourselves from it. You talk as if it’s full speed ahead using the traditional investment vehicles you’ve always used. It seems you aren’t using anything new or obscure to provide for your own protection and “safe harbor” in case someone tries to implement “The Great Taking.”
So I conclude one of the following has to be true:

  1. you haven’t read “The Great Taking.”
  2. you have read it but have concluded there is no legitimate threat.
  3. you have read it, believe there is a big threat to “owners” of common investment vehicles, but have not taken any significant actions yet.
Did I miss something from your conversations? As of this week, I am personally completely out of “The System” to the extent I can be aside from a small amount of unsecured creditor cash in the bank. (My wife and I have Philadelphia municipal pensions which we can’t touch or modify, so we’re stuck with that exposure.) I like listening to your analysis and data but it’s not useful for investing purposes if “The Great Taking” is a thing. Paul says at least once per session, “We have no choice but to play by the rules of the system as currently configured,” which I judge to be “bad faith.” Instead of that, one could exit the system but that would be hugely disruptive to both of your income streams. I hope that hasn’t blinded you to the risks of “The Great Taking” if it turns out to be even partially true. I, for one, would be very curious to hear definitive statements from you about your professional and personal actions taken in reaction to “The Great Taking.” These conversations reveal nothing along those lines. It’s as if you never heard of the book and its warnings.
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The Great Taking has been covered quite a bit here. Perhaps look over recent content or do a search.

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I’ve read every single item here on TGT. Now I’m curious what, if anything, Chris and Paul THEMSELVES have done about it. Their discussions in this format seem unaffected by it. Can you point me to actions they have personally taken re: TGT? Have they converted all their stocks and bonds into some other forms of wealth/investment? Have they paid off all debt? Has Paul gone into another line of business since being a financial planner/advisor sounds like he still guides clients into traditional vehicles like stocks, bonds, etc? Does Paul educate clients about the threats described in TGT?
What have you done differently @preppy, if anything?

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I understand your position entirely. I’ve followed Chris for long enough to trust that he’s always acting in good faith, but that doesn’t negate your (and my) concerns. Here are a few thoughts I have:

  • I don't think Paul or Chris have discovered any loopholes that would protect traditional investments from The Great Taking, but they have said they are searching for them. It is possible that they want to exhaust any overlooked options before really diving into threat mitigation. Hopefully this search yields positive results.
  • I get the impression that Paul does not believe The Great Taking to be a high probability threat, so it would make sense that he would encourage financial growth via traditional means to fight the present threat of inflation vs an ultra-conservative approach to fight what he sees as a low-risk threat. I'm personally somewhere between you and Paul on this issue, but probably closer to you. I could be completely wrong about Paul's mindset. I'm just going off my feelings based on the videos.
  • I think that the way one approaches the threat of The Great Taking is wildly influenced by the amount of wealth they hold. If you have millions, you can tuck a couple hundred thousand worth of gold and silver under your house and live like a king in the event of The Great Taking, while also having the majority of your wealth managed by someone like Paul and growing. If you only have a few hundred thousand or less, then it seems like the decision to stay in the market with such risk becomes much higher because there is more at stake.
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I agree with what both johnsonbrown and thc0655 have put forth. I have watched various reactions and analyses from Doug Casey (https://www.youtube.com/watch?v=M5-qvST4_iE) 15:50 mins begins discussion, George Gammon (https://www.youtube.com/watch?v=fCaKY6Bskf4), and others on which aspects of TGT to take seriously. They seem to have their doubts as to how realistic it is that this would happen combined with leaving one with a sense of depression and hopelessness. Doug Casey mentioned that maybe real estate investments wholly owned might be one possibility. The Doug Casey episode goes into what happened in the Great Depression, that led to people being “ground to dust” following the Bank Holiday declared by FDR.
Perhaps Chris’ lack of reply to your questions pertains more to an attitude of "They can’t POSSIBLY go there…I’m not even going to contemplate what that entails.)
A reasonable reaction perhaps, because in 2019, how many would’ve contemplated that in 2 weeks time that the entire world would’ve locked people in their homes and stalled the ENTIRE world economy? Yet that is exactly what happened.
thc0655, you took the rather unpleasant tax hit to cash out your IRAs and go to more secure, physically held assets. And in the process I imagine you ended taking a ~35% financial hit when you include state and fed taxes putting you into higher tax brackets if done all in one year.
So maybe the calculus is, "Do I want to limit my IRA and other brokerage-related losses to those ~35% tax-related losses or risk much higher losses by keeping within the system and potentially risk not being able to keep ANY of my supposed wealth if the TGT is implemented.
If the TGT is several years away, trying to keep tax losses to a minimum by cashing out IRAs in such a way to not put you into the highest 37% brackets -(2023 and 2024 Tax Brackets and Federal Income Tax Rates - NerdWallet).
Personally, this is the approach I am taking: Converting PSLV and PHYS held in IRAs into actual physical via taking cash distributions and then purchasing physical PMs. Another possibility might be to invoke the provision in each of these products to take redeem your shares and taking physical delivery, but this involves some paperwork and you have to me a rather high threshold (400 oz of gold and 1000 oz of silver). I’m guessing that doing this would probably result in the IRS considering this to be a taxable event.
Anyway, it’s a perplexing predicament to be in re: TGT. At this point, I think that ANY diabolical plan THEY could implement should be on the table. Doing nothing and covering your eyes and putting your fingers in your ears and saying, la-la-la-la-la doesn’t seem to be the best reaction IMO.

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It’s a ridiculously (on purpose) topic that requires careful thought, study and planning.
For a variety of reasons, not everybody is in a position to exit ‘the markets’ or even believe yet that they need to.
Such is life.
Let’s consider FDIC insurance and banking…I’ve covered this many times. Is FDIC capable of covering a truly massive banking failure? No, not even close. It is a fraction reserve backing of a fractional reserve system.
Do I still have bank accounts? Yes.
Why?
Because TINA (there is no alternative). At least for me because I have decided it’s more important to spend my time being an information scout than trying to Rube Goldberg my payment systems to evade the banking system.
Such is life.

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Working On The Farm

I found Paul’s comment that perhaps everyone should have a year-long stint working on a farm as part of their college education a bit bizarre, as both he and Chris commented on in the video. But please bear with me.
While I agree with the sentiment, I don’t think this is a workable plan unless this is heavily subsidized. In spite of what city dwellers may think, farming is a highly skilled occupation with an extraordinarily long learning curve. Chris can probably chime in on the learning curve involved just in gardening, and this is minuscule compared to the learning curve involved in running a successful farm. To the extent that most people involved in farming nowadays were born to it and had a 20-year apprenticeship before taking over the operation.
Joel Salatin is a Virginia farmer who has become somewhat famous in the regenerative agriculture scene. Once upon a time, he allowed visitors to assist with his farming operation. He found — I imagine to his disappointment — that he could not run his operation this way. The time taken to instruct his visitors overwhelmed the value of their work
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One way the plan could work is to have students grow their own food on farms attached to their colleges. (Their tuition would provide the subsidy needed to support this.) But there’s nothing quite like having fire blight or plum curculios decimate your fruit crop to bring you face-to-face with the difficulties of running a successful agricultural enterprise. It’s good to see this when you’re not dependent on your orchard to stand between you and starvation.
At any rate, I doubt most students would not be comfortable with killing and butchering their chickens, cattle, and pigs. Don’t get me wrong, I don’t like these activities either, but if you want to eat hamburger… I think most people would adopt a “plant-based” diet immediately.
In the end, I think it’s better to leave farming to the farmers. If someone wants to learn about farming, there are plenty of high school and college programs that will fill them in. Maybe some of those courses should be required.

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I expect those I hire to manage my money to be expert risk managers. Even a mediocre risk manager (like me) knows that the potential impact of a risk needs to be considered in addition to the probability of the risk happening. Like Thc0655 I’m disappointed with the “business as usual” approach of the discussions between Chris and Paul.

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Re: FDIC insurance. Not only does the FDIC not have more than 2-3% of the sum necessary to cover all the possible bank balances it insures, there’s no statutory time limit on how fast they have to make bank customers whole. If just 20% of the bank balances had to be covered by the FDIC in a massive crisis, they’d have to go to Congress with a request for a massive funding request. How long, if ever, would that take? And even if they got it, how long would it take for all the customers to be made whole after going through the FDIC bureaucracy which would be easily overwhelmed by the volume of claimants clamoring for their money? FDIC only works when there isn’t any significantly-sized crisis. How many customers would have to wait 3 months, 6 months or year before getting their balances restored? What would the second and third order of effects of that be? Yikes!

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  1. Crop failures from climate disruptions and BAD policies and problems with supply chains cause the physical world to fail around us. People can no longer get food and critical necessities. (as in early covid)
  2. Failures in the electric grid that leave people in the dark freezing or dying of heat stroke.
    Chris talks about political and monetary policy failures. However, bad political decisions come back to haunt the physical world, so I’d add at least the above two failures that are the logical results of anti-farm sentiment and poor energy policies.
    Just as the Feds sent Covid checks to billionaires, there will be idiot responses to these physical failures that will quickly impact the financial system.
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Of Course They Know Where Food Comes From - Whole Foods/amazon And Trader Joe’s. . . (insert Your Local Upscale Grocer)

When my daughter was in preschool she visited the family farm. When she came back to school and talked about milk from cows, several kids told her “No, milk comes from Kroger”.
There are ongoing efforts to have school gardens so kids do know how things grow. The community gardening fad during covid was also a step in the right direction. I think the point about not butchering meat is one of the main holes. I like the idea of having colleges grow their own food. Rice university in Houston does some on campus and of course the midwest land grant universities all have ag departments, many with facilities on campus. Perhaps a good idea would be to have an ag course required - several choices from produce to dairy to eggs to meat that kids could select from. And a great disciplinary option --assigning disruptive students to mucking out barns.
Unfortunately, most sane farmers wouldn’t take lazy, entitled city kids for any subsidy. Farm work is hard and much of it is at least semi-skilled. That said, a few years ago there was a movement for family farm tourism (sort of like ecotourism). You could bring your kids to a working farm/ranch in sort of a B&B experience and really learn where food comes from.
I wonder if PP could facilitate some of this. We continually hear younger folks stuck in a city say they would love to learn homesteading skills. Meanwhile, we have people starting out on the land (and a few long established but struggling) who could use some willing help. Maybe PP needs to facilitate some sort of “Spend your vacation on the Land” program to match those of us with land with people who would be willing to bring their families to live on the land for a week or two. A family could bring all the skills the family has and be willing to do anything needed to help out. The farmers would do their best to provide an apprenticeship experience, not just have guests mucking out stalls or chopping wood.
It wouldn’t be easy. City people would need to prepare by a good fitness program. No couch potatoes need apply. Farmers would need to figure out what work would help the farm and how it could be taught to a greenhorn. And any family member that comes needs to be willing. You couldn’t bring your sullen, spoiled teen and expect farm hosts to deal with that.
And safety is always an issue. Teens get killed by making dumb (inexperienced and arrogant) moves with animals and machinery. Even adults who know better end up making mistakes where severe injuries result.

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That’s a neat idea.

Local school / kid-oriented program for day trips or a weeklong summer school with hands-on training on a few farm and garden skills.

Family/adult “working ranch” program to help around the farm while learning a few skills.

Some schools have 4H programs and future farmers, but not all.

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The cities may have 4-H programs but they don’t tend to do things that would be useful on a working farm - Neither things that need hard physical labor nor things with animals. [Dog grooming doesn’t count.]

Maybe we need to look at having summer camps on working farms/ranches if we could figure out the safety issues. It might be the best we can do these days is summer camps/day trips at community gardens. A single visit isn’t useful. The kids really need a chance to learn to work with gardening.
Something that might work with safety is the agreements parents signed when my daughter went to an invitation-only public school music magnet. Parents and teen both agreed that they would absolutely follow rules and code of behavior. One warning and then the kid sat outside the front door for parents to permanently remove the brat. Worked well. For a music and arts magnet, there weren’t issues with drugs and little fighting.