Hello, welcome to the Wiggin Sessions. I'm your host, Addison Wiggin. I have with me
Rickards, who I'm sure you're familiar with. But what I'd like to do to start today's session by
having Jim talk
about his own experience. And give us a clue into why he views the world the way that he does,
because I think
you'll find it particularly interesting given the economic times that we're in.
Thank you, Addison. Great to be with you.
Yeah. And it's always a pleasure to talk to you. I learn something new every time. So if you
can, I know the
story, but if you could just kind of bring people up to speed on your experience in life. Start
in New Jersey
in, what is that, in the ’90s, right?
Well, if you like, I can start in New Jersey in the ’90s. I can start in New Jersey in the 1950s,
but I'll try to
narrow it down a little bit. I could probably do it, take 100 hours, but we'll try to do it in
10 minutes. Yeah.
Background, I graduated from Cape May High School. When I was there, it was still largely true,
was growing up there, I went to high school there. It was mostly rural and fishing. Those were
we had the run of things you could do, but most people either were farmers or fishermen. Those
were the two main
things. Now Cape May is a major tourist destination. So there's a summer Cape May and winter
Cape May. The
population actually increased by a factor of five.
It went from like 10,000 year-round population to 50,000 in the summer. There were a lot of
wealthy families from
Philadelphia and Baltimore. The rich New Yorkers tend to go to the Hamptons or to Newport, but
for the wealthy
families in Philadelphia, Baltimore, Cape May was the destination. In the 1880s, it was known as
House. A number of presidents stayed at Congress Hall, which was built in 1813. It's still
there, by the way; I
stayed there not too long ago. It's such an interesting place. So yeah, we never had any problem
because, like I said, there was always a call for help. But, the other nine months of the year
it was rural, and
fairly poor. We didn't feel poor. We were, if you did a demographic analysis, I guess we'd fit
in that maybe
lower-middle class societies, certainly not middle class or certainly not upper-middle class.
But we didn't feel
that way, we had a good time. We played sports. We worked on our studies and so forth.
But my high school class, for example, was 40% college bound, 60%, that was it. So for 60% of my
was class president. It was pretty good, pretty well acquainted with everybody. That was it,
that was the only
they were ever going to wear a cap and gown. That was the only time they were ever going to be
handed a diploma.
was a very big deal, our high school graduation. But I did pretty well academically, and went to
University. So that was my introduction to Baltimore. Got a graduate degree there, so I ended up
for five years. Been back many times since, I still go back for a lot of reasons.
Yeah. That's our fault.
Yeah, it's your fault. But, I love Baltimore, and always enjoyed going back. And I actually lived
there for five
years. Then I got a graduate degree, Master's Degree in International Economics. But it was through
one of the worst
recessions since the Great Depression. This was like 1974. The younger people in the audience don't
remember what it
was like in the ’70s, but that was a really severe market crash. I was getting an early education in
volatility and there weren't too many jobs around. So I said, well, I'll keep going to school. I
went to law school,
went up to the University of Pennsylvania. And then when I graduated, when I got my law degree, I
started working in
New York. I was an international tax counsel at Citibank, but I went nights to NYU and I got a
graduate law degree
in taxation. My father did ask me at one point when I was going to stop going to school. But, by the
time I was 30,
I finished up.
Yeah. You might turn that around on my kids.
Yeah, exactly. Yeah. But I was banging out the degrees, I got four degrees. But it was the
Citibank and then that was a portal or gateway, whatever you want to call it to the world.
Citibank, one of the
reasons I joined them as opposed to a law firm, they were in business in 98 countries at the
time. This was in
So they had more overseas offices than the State Department had in embassies. So if you really
wanted to see the
world, you could join the foreign service or you could work for Citibank, and I did. And I just
circuits around the world. Started out in Europe, I moved to Asia Pacific and Africa, and I was
the number two
coming up the ranks. So my boss would go to Tokyo, Sydney and Singapore. And I would get
Zimbabwe, Kinshasa and
Nairobi. Nairobi was fun, but yeah, they traveled quite a bit in Africa.
But that was an interesting time. It was a commodities boom. It was actually in the aftermath of
So you could see when cocoa and copper and oil prices had been soaring in the ’70s, which they
were. All this
is coming in. And then it crashed in the ’80s, the early ’80s was the time I was there. So you
could see the
aftermath, how the money was wasted. There was corruption, they'd build a skyscraper and then
it. So when I got there, the windows were falling out, everybody would say, look at this big
skyscraper. So, it
a really good education in development economics, a subject people don't know all that much
about. In the
I changed it up. I left after 10 years at the international tax counsel. I joined an investment
bank that was
the top dealers in US government securities. So we were what's called a primary dealer. People
ask, what's a
Well that is a list maintained by the Fed. And it basically is your permission to trade directly
with the Fed. So
when, the Fed prints money, like how do you print money? Of course, it's all digital, but the
way they do it,
buy bonds from banks and they pay for it with money that comes out of thin air. It's that
simple. It's not more
complicated than that. So the Fed builds up a balance sheet of bonds and the money comes out of
thin air. Well,
Fed needs dealers, they need people they can call to do those trades. And they're very, very
only today, it's about 20, the list varies. But my firm was one of the firms on that list. So we
talked to the
We were one of the few that could, so that was immersion in the Federal finance fiscal policy,
securities market. But this is the mid-to-late ’80s, but that was the time when the derivative
market was taking
off. Of course, traditional futures contracts have been traded in Chicago since the 1850s, but
these were swaps,
options, swaptions, caps and floors, all over the counter, all off the balance sheet.
All, yes, we invented — this part of the team — we invented some of the contracts. I worked on
the first credit
default swap sovereign credit default swap ever. We didn't have any forms. There were no
We had to sit there, and basically we were at the contract, which I did with some teammates who
did the math. So
was a pretty exciting time. In the mid-’90s I changed it up again. You begin to get the idea
that I either
know what I wanted to be when I grew up. I preferred the word eclectic in terms of a career, but
I changed it up
again and joined a hedge fund. I was there for six years. We started to finish in the late ’90s
and made a few
headlines in 1998. This was Long-Term Capital Management. And prior to the financial crisis of
meltdown and Lehman brothers and all that, the LTCM fiasco was the greatest financial panic in
the United States
since the panic of 1907.
It's not that there hadn't been stock market crashes and the Great Depression was stressful. And
Penn Square and
Continental Illinois, a couple of big banks failures in the ’80s. We had the S&L crisis that
the 1980s. So not that there was no financial distress, but in terms of the panics, that
actually did come this
close to taking down the entire global financial system. That was it. And I negotiated that
rescue and lined up
against, I call them the 14 families with the 14 banks. The original deal was 16 banks were
going to put in $250
million each, and that was going to be $4 billion, and that was the rescue amount. But Bear
Stearns dropped out
they got their payback in 2008. No one shed any tears when Bear Stearns failed in March 2008.
But Wall Street
long memories and they remember Bear Stearns turning their back on the rest of the Street in
So Bear Stearns was in distress in 2008, again, no tears were shed. That was their sort of a
payback from Wall
Street. The other one was Lehman brothers, which just didn't have the money. So they scaled down
to a hundred
million. Goldman, JP Morgan, a couple others scaled up from $250 to $400 to make up the
difference. And we
together $4 billion, all cash, in five days. It was five days in September ’98, with no sleep.
It was funny, the
first day you were at the law firm, there were hundreds of lawyers running around in different
rooms. There was
tax room, a bankruptcy room, a foreign syndicated unsecured credit room, due diligence room,
etc. So on the
day everyone's got a suit and tie on. The next day the ties are down, the collars are open. The
day after that
ties are going, the jackets are going, the shirts are half open. No one's sleeping. No one's
bathing. We're just
working around the clock, but we got it done. But we were hours away from shutting every market
in the world.
not an exaggeration. It would've started in Tokyo. And just going around the world, it would've
reopened at some
point, but we were looking at a global shutdown.
From there, I worked at a couple technology companies, ran a stock exchange and did a few other
things. But after
2001, after 9/11, I got tapped by the CIA intelligence community to work on counter-terrorism
finance, which I
for quite a long time. And that was, needless to say, interesting. Some things that I can say
about that and
things I can't. But it was certainly taking a lot of practical experience along the way. They
interested in me because I had converted CitiBank Pakistan to Islamic banking in the early ’80s.
So I was
one of the leading Western experts on Islamic banking. And of course that was a big part of
finance. I did quite a few things there and then did a few other things. But by that point I was
sort of regular
CNBC, doing it. Ultimately ended up doing Bloomberg, Fox News and a lot of other financial
But I also started writing books. And my first book, Currency
Wars, came out in 2011 and was a national best seller. Then followed up after
that with The
Money, which was a New York Times bestseller, not easy to make that
list. And I've
writing books ever since. And around that time, 2014 bumped into you and some of your colleagues
with Agora and different imprints and so forth. And had a long career at this point in
So like I said, a little bit of everything. But if you asked me to stitch it all together, I
would say law,
intelligence, national security, economics, those are all areas where I feel pretty comfortable.
But of course,
learn some lessons along the way. And I had gone, not me, but my family had gone through a
the early ’60s, this is 1962. And at that time the bankruptcy laws were a lot more stringent
than they are
Today, it's yeah, you file, you do some court filings, there's some procedure, but you kind of
walk away without
scratch and start over. But then, in those days they took the house, they took the car, they put
a lien on your
salary. So even if you had a job and you were making money, a lot of it was taken right off the
top to pay
creditors. It was kind of, no easy way out. And so, I was a 12-year-old kid at the time, but
through their own changes. And so, all of a sudden you go from a brand new Chevrolet convertible
Chrysler Imperial where you can see through the floor, to the road, that sort of thing. Not
getting new clothes
the time, living in a bungalow, $35 a month.
I look back on it and I said this for a long time, but I'll say it again. It was the best thing
me. Highly stressful for my family, not fun. I'm not making light of it, but it teaches you how
to rebuild. It
teaches you how to reinvent yourself. It was at that point that we moved. I didn't have any
friends, because I
in one community for, at that point, like I said, I was 10, 11 years old and had a whole network
of friends. All
a sudden that's pulled away and you go into a new… I was in seventh grade, but we actually were
so poor. The
was so poor, we had a six-year high school. So, we were on the bus with seniors as we were
seventh graders. They
were on the back of the bus. I don't know what was going on back there, but as a seventh grader,
you sit in
the bus. But, you learned a lot.
So, I became very focused on studies and got good grades. It's kind of how I got into college. My
closet was a
in the wall. You'd hammer a nail on the wall and you hung your hoodie and your jeans or
whatever. And that was
But, it gives you resilience. I mean, I've never worried about money ever since. I've made a lot
of money, but I
always say if you've ever lived through anything like that, you're like, "You know what? If it
all went away, I
could survive just fine." And that's a great source of strength. It gives you strength for all
the other things
have to do and all the other challenges you face. Because if you've never had a bad day or
you've never had the
wheel of fortune, the reversal of fortune.
Actually, I know people who have been very successful, made a ton of money and had various
all good, but they've literally never had a bad day. And a lot of them are very insecure,
because they worry
that. They're like, "Oh, well, what would happen if this went away?" And having been through
that, I know that
do just fine. You just have to kind of keep focused. Same thing happened in 1998 during the
situation. I was their lawyer, I worked there. I was there from start to finish, but I also had
quite a bit of
invested in the firm. I was the lawyer. I was like, "Wow, I'm working with all these geniuses."
And they were,
did have genius IQs and there were two Nobel Prize winners.
I'm like, "Well, I'll just give them my money. They know more than I do and they'll do fine." And
for four years
did, I mean, we kind of tripled our money and then it went down 92%. So, I wasn't bankrupt,
wasn't kicked out of
house, but that was a real setback. And once again, you just pick yourself up and you go from
there. So, I've
couple of those reversals and they actually make you stronger. I was working with a hedge fund
in the early
and with my partner, we went to a resort in Switzerland. We were meeting with one of the big
hedge fund asset
allocators further out on the lake, kind of like a suburb. But anyway, we ended up downtown, it
was dinner, and
were having a couple glasses of wine and they agreed to give us $50 million, and had a $50
million allocation in
And the guy leaned over to me, the decision maker, and said, "I know what happened at Long-Term
Capital." And he
said, "I wouldn't give money to anyone who's never had a setback, because you know what it's
like. You won't let
happen again. And I have more confidence in people like that than I do people who have never had
a bad day,
that means that they can be a little arrogant or they can miss things." So, I mean, I agree with
that, but of
that's just like agreeing with myself. But, he made a point of telling me that and I thought it
interesting. But it certainly lined up with my experience. Once you've been through something
like that, you
let it happen again. So, yeah, a little bit of law, finance banking, hedge funds, intelligence,
Let's move on. Part of the reason I want to talk to you today is that the Davos agenda was
last week. They got together in Davos, as they do. And you have a unique perspective on not just
what they say,
but also the people who are involved in that entire endeavor. And there's a lot of unelected
people who are
making decisions about the way that the global economy will unfold from here. And they have
ideas about the way
that they want to impose policy, I guess, is probably the best way to say it. So, that's part of
the reason I
wanted to get your experience on the table before you start talking about the Davos set, is what
They kind of annoy me.
Yeah. Well, there's a Davos set, I call them the global elites. And I make the point that a lot
of people who
about them, write about them, the Great Reset, they're different names for it. I think the Great
Reset is the
that's got the most currency at the moment. They're smart people, and they pay attention, and
they can't come up
with some good analysis, but they're several steps removed. They don't actually get invited to
never met the individuals involved. And to a great extent, I have. I've met with. Just
like waving from the audience, but I've just had one-on-one conversations at length with Ben
the former head of the IMF, John Lipsky.
And I once gave a private briefing behind closed doors in Rockefeller Center. Where else? To the
And if there's one group that's even more spooky and secretive than Davos, it's Bilderberg.
Because Davos, you
kind of buy your way in, but Bilderberg is invitation only. It's a much smaller group. But I
briefed the head of
and he was a very nice guy. And at the end, he came over and presented me a gift and I opened
it. It was a vase
a kind of swirling glass, but beautiful. In fact, it's right over here, it's on the shelf near
But, you look into it and it's kind of a vortex. And I thought, "Well, that was appropriate." You
don't want to
sucked into the vortex. So, I've met quite a few of these people. And the point I make is that
we know who they are. You don't have to cook up a conspiracy theory. There’s Mark Carney. Mark
interesting guy. He was the head of two central banks, actually three. He was the head of the
Central Bank of
Canada. He was the head of the Bank of England. And he was the chairman of the BIS. People are
That's the Bank for International Settlements. That is the central banker's central bank. It's
based in Basel,
Switzerland. It's in a skyscraper on a river there. And central bankers from all over the world,
G7 are the main ones, they meet there once a month. And there are no records. There's no
minutes. If there are,
they're not released. There's no accountability. There's no press conference.
That really is secretive. I actually knew one of the guys, he's the vice chairman of the Fed, we
partners in a couple different enterprises. And he was the attendee for the US to represent Alan
Greenspan didn't like to travel that much, so he often skipped the monthly meetings. But my
went. He was the vice chairman of the Fed. He went as the US representative. So, he was inside
the room, told me
lot about it. So yeah. But Carney was the chairman of that. A trifecta, heads of three different
including the biggest and the most secretive. And Bob Rubin, everyone knows him from Goldman
the Treasury, but he's still around. He's the chairman of the Council on Foreign Relations,
which a lot of
think is as secretive as Davos.
So, I could go down the list, but we know who these people are. They're out there. They're giving
to pay attention. But the Davos crowd, the Bilderberg crowd, the BIS crowd, they're known
quantities. And I sort
steer away from conspiracy theories, because you don't need them. That's not because the
They do. And you look for them. But I make the point that you don't need a conspiracy, if you
individuals. In other words, if enough people in powerful enough positions all have the same
goals and they all
agree on whatever it is they want to accomplish and how they want to do it, you don't need a
wake up and do stuff and they're all in sync.
I always find it fascinating to look at where they went to school. What you discover is that they
all went to one
10 places. It's Harvard, Yale, University of Chicago, Stanford, maybe Columbia, maybe Wharton in
or Oxford or Cambridge, the Sorbonne in France. There's a short list of schools. Berkeley, I
would include. They
went to one of them. In many cases, they were each other's faculty advisors. When the younger
one got their PhD,
thesis advisor was another one. And so, they end up both in the same position. Whether it's the
or they're at Davos together or whatever it is, they all went to the same schools, same short
list of schools.
taught each other. They all studied the same text. And they all think this same thing. So, if
you can understand
that, you can actually figure out what they're thinking, where they're coming from. And the
agenda is not that
difficult either because they tell you.
Now, here's where it gets a little tricky. And the IMF is a good example. The IMF is what I call
non-transparent. And what I mean by that is they can't say anything. They can't say, "We're the
IMF and we're
telling you what we do." They have to tell you what they're doing. And they do. There are
academic papers, speeches, spring meeting, fall meeting, annual meeting, etc., etc. But they
have a certain
They have a certain way of speaking. They have words and phrases that are not the least bit
intuitive or plain
English, shall we say. So a lot of times in the work I do, I feel like an anthropologist who
goes into the
studies the natives and comes back out and tells everybody else what's going on.
But I guess what's unusual about me is you have a lot of insiders and they're the people we're
talking about. And
have a lot of outsiders who are throwing stones and criticizing, and, "It's a conspiracy," and
all that. But
don't actually. And they're smart people, and I'm not disparaging anybody. But they don't
actually have the
technical training that you need to understand what the insiders are doing and how they're doing
it. And I'm
in the sense that I have two law degrees and before I went to law school, I got a graduate
economics but especially in development economics. Where I went to school, it's the number one
school, School of
International Studies in Washington. It's part of Johns Hopkins University, but it's their
When you left there, it was like boot camp for one of three places. You either went to the IMF,
or you went to
intelligence community or you went to Wall Street. I joined Citibank, which was the biggest bank
in the world at
time. But, you learned the buzzwords. I was the last class to graduate before they completely
abolished gold as
monetary asset. It was '71. Everyone says, "That's when Nixon went off the gold standard." It's
not exactly what
did. He ended the convertibility of dollars for gold, but he intended it to be temporary. They
were going to go
to it. They just never did. And it wasn't until about '74 that the IMF just said, "Okay, that's
it. You can be a
member and not put up any gold."
But that's when I was in graduate school. So, when we studied national accounts, you had to
understand gold as a
of money. If you're younger than I am and you know anything about gold, you either went to
mining college or
self taught because they completely stopped teaching it in universities. But I caught the tail
end of that. So,
that's part of why I've always thought of gold as a monetary asset. But my point being, I speak
can read their technical papers without a glossary and understand what they're doing. So, I
think my insight
that whole crowd is probably — not probably, but definitely better than anyone who's not in the
Tim Geithner is in the club. By the way, he went to the same school I did. Tim Geithner went to
the School of
Advanced International Studies. So did Madeleine Albright, so did a lot of other people that are
we're talking about. So, I'm a little bit the outlier in the sense that I have that kind of
speak the language, understand it, but I'm not one of the elites trying to take over the world.
Yeah. So, how do you go about translating what you see? Let's say it's a Fed Minute or
something basic. How
do you translate that to the way that readers can understand what is actually being said to
Because it always seems like there's sort of a ghosting effort going on.
Well, that's right.
Tell you one thing, but they mean another thing.
Yeah. And in my newsletters and in my books… People use the expression, "Dumb it down." They go,
"Take it, take this
complicated stuff and dumb it down." I never dumb it down, but I do convert it into plain English.
There are very
few technical terms, or jargon, or integral calculus equations that you cannot put into plain
English. In fact, if
you can't do that, you should stick to the faculty lounge and not try to hold yourself out to the
public. So, that's
exactly what I did. Let me just give you a concrete example. Prior to 2015, the Fed did the taper.
another taper now. We're in the middle of that. But in 2013, Bernanke started the taper. The taper
was finished in
late 2014. And then Janet Yellen took over and they were getting ready for the first interest rate
was the so-called liftoff, which didn't happen until December 2015. A lot of people expected it
sooner. I didn't,
but everyone was waiting for that. So the FOMC was coming out with statements. They meet eight times
a year, so not
quite monthly, but about every six weeks, or so. And they had a code word and the code word was
We will be patient in deciding when to raise interest rates. So, they were definitely telling you
they were going to
do it. And if you were in a carry trade — carry trade is when you short dollars and maybe borrow
means you short, you buy yen or something else, and you invest at a higher yield and you capture the
that trade works fine, as long as two things are true. If interest rates go up, your funding rate
goes up, so you
could very quickly go underwater and if the dollar goes down, you're going to have to pay back more
those are the two dangers. Well, when the Fed said, we're going to raise rates, not saying when,
they were warning
you. If you were a big bank, if you were a hedge fund, if you were in the carry trade, they were
saying, get out
now, or start to work your way out of it because if we raise rates and you're on the wrong side and
you lose money
Yeah. Now, we're in that phase, right, where they're telegraphing that they're going to raise
Yeah. The markets are betting three, for sure, later this year, maybe four. There's some probability
of getting it to
four. Yeah. And the Fed is all about transparency.
What does that do for regular investors like most of the people that are going to be watching
this? What does
that do to mortgage rates? If they start trying to slow inflation creeping its way in, there are
with supply chain and stuff like that, that is related to COVID. But, if they're talking about
that means that the entire economy is going to slow down.
Well, that's my view, in terms of what's going to happen. But, just getting back to the Fed, a
couple things you
to know about the Fed. Number one, they're always wrong. If you want a good forecasting tool,
figure out what
Fed's going to do and assume the opposite. No, I'm serious. That's a very good forecasting tool.
The other thing
about the Fed, they're very, very transparent. They pride themselves on it. They want you to
know what's going
because they don't want any shocks. They never want to do anything where the market didn't see
that could sink the stock market, or cause an asset bubble. It could be in either direction, but
the point is
don't. Just think of the Fed as an institution that never wants to surprise anybody. By the way,
was around in the '70s and '80s when they never told you what they were doing.
And that was part of the big deal about being a primary dealer. You got to talk to the Fed, you
else in the market, because they would drop hints, and then it would filter out from there. But,
if you were in
inside group, that was extremely valuable. Today it's the opposite. They never want to surprise
don't change quickly. I read all these things. Some index inflation ran a little bit hot or
good as they thought. Everyone, oh, the Fed's going to change course. No, they're not. They're
not. They need to
three or four, even six months of bad data in a row before they say maybe we got it wrong. They
don't do it for
month. They don't do it even for two months. Three at the minimum and more like six. So when
they tell you
going to do something, believe them. There's nothing that I do that's easier than forecasting
What do you think of their social agenda at the moment like climate change or the pandemic or
did that come from? Why are they doing that?
Well, this gets back to what we were talking about earlier with the Davos crowd and Klaus Schwab
and Mark Carney
now Janet Yellen, who's of course Secretary of Treasury, have signed up. There is a global
Now here's the thing on climate change. Is there climate change? Of course there is. There has
been for four
years. There's never been a time when the climate wasn't changing. I lived for 10 years on Long
beautiful houses right on the water, a beautiful body of water. You can fish and water ski and
wind sail and
boat and do all kinds of things. But it has a rocky coastline. And the reason it has a rocky
coastline is that
10,000 or 12,000 years ago, it was a glacier, and glaciers move and they push the rocks out of
the way. So when
glacier melts, it becomes a body of water. You get a rocky shore.
That's the difference between New Jersey and Long Island. The glaciers stopped at New York City,
never got to New Jersey. That's why I love Jersey beaches, but in New England we have rocky
were covered in glaciers. It was a glacier. Now you can sail your boat. That's climate change,
but it took
years and that's about the tempo. There can be ups and downs. Why did the Vikings get to
Greenland in the 11th
century? Well, the answer is, it was a lot warmer.
This whole city's buried under ice right now.
Correct. And there were farms in Greenland. Nowadays, it's a glacier, but in the 11th century
there were farms.
not that the Vikings were more hardy and could deal with and live on glaciers. It was that the
I'm not saying it wasn't tough to be a Viking. I'm just saying that there was this early Middle
And then when I grew up, you had to read stories like Hans Brinker and the Silver Skates
or whatever by
Hans Christian Anderson. Well, I pictured everyone in Holland on ice skates, going up and down
the canals. Well,
that actually was true in the 17th century because they had what's called the little ice age in
the 17th and
18th century. And it could still freeze but in those days it was frozen solid every winter and
the summers were
warm. Summers were not warm.
So, whether it's the 11th century warming period or the 17th century cooling period or the ice
age, a lake or a
or whatever, of course the climate changes. That's not the point. What we're looking at is not
climate alarmism, climate panic, climate fear. So then you always say why. These things, once
you identify them,
don't go, ah, I got that figured out there. You're trying to pull something off here. Well, what
is it? And why?
answer is global control. So they want global governance, global taxation and global regulation
and world money.
That's the agenda. So I just gave it to you. It's like, I didn't break into a safe, I didn't
steal it. It's
in what they're doing. Global governance, world money and global regulation, global control.
That's what they
So how do you do that? Well, that's the solution. That's the end game. That's what they want.
Well, if you want
solution, you need a problem, because you're going to go solve the problem.
Can I just be really dumb about this and say, why do they want that? Because I've been asking
to a lot of people like you, but also people around me, who don't even think about this stuff,
what do they need
control for? Why?
Well, it's part of human nature. Alexander the Great, Napoleon, Hitler. You go down the list. There's
a long list of
people who try to take over the world. Genghis Khan. He actually came close. He came closer than
But isn't it weird that we agree — at least some people do — that we set up a system where
you can't actually
take control of the government? You can't take control of society. We believe that we got that
far in 1789. Why
are we still doing this now?
Well, what you're describing, Addison, and you're right about 1789, but that's a very linear
concept. And the
is not linear. And history is not linear. As Buckminster Fuller said, there are no straight
lines in the
and he's right. There are no straight lines in the universe, Euclid notwithstanding. So I think
you have to go
to Aristotle who described politics as a cycle. It went from aristocracy to dictatorship, to
democracy, back to
aristocracy. And Athens had a very radical form of democracy. When they were in their democratic
period in the
to late fifth century BC, now they didn't have universal suffrage. It was for men only. And the
vote. Women couldn't vote and foreigners couldn't vote. And it was a little tighter than we have
the male adults who could vote, they would all show up in the Agora and vote.
And I think it was about 8,000 or 9,000 of them. And they did some crazy stuff. The idea that if
you lost a
you might want to punish the generals or in those days kill the generals. That's part of
history, but they would
have situations where they won the battle and they killed the generals because they didn't like
the way they
You won, but too many casualties, so we're going to kill you. And they did. And that was the
By the way, that is not a constitutional republic, which is what we have.
Which is what we have. I make that point on a regular basis. When people bitch on TV that
democracy, we don't have a democracy and we never have.
We're not supposed to. It was not until the 1920s.
It's a constitutional republic.
By the way, it was not until the 1920s, when you had the direct election of US senators. From 1780 to
were either appointed by the governor or elected by the legislature of the state and they were your
weren't the people's representatives. They were the state's representatives. So the state of
governor of Massachusetts would say, okay, you're my Senator, go down to Washington and look out for
the state. And
so that changed in the 1920s, but that's a really good example of how the United States was never
intended to be a
pure democracy. And the Founding Fathers read their Aristotle. They read John Locke and Thomas Hobbs
but they also read Aristotle and Plato and Gibbons, the rise of the Holy Roman Empire. And they knew
Aristotle and from Rome that pure democracies always turn into mob rule. Reaction to mob rule is an
then the aristocracy becomes corrupt and becomes a dictatorship. And then the answer to dictatorship
is a revolution
and you're back to mob rule. So it was a circle, not a straight line.
Where do you see us right now in society? I feel like there's a lot of mob components, but
there's still some
structure left that people respect.
Yeah. I agree. I think this is the greatest stress test for the constitution since the Civil War.
Now, certainly I
was around in the '60s and there were anti-war protests in the '70s. The Weathermen were planting
bombs on Capitol
Hill, this Capitol Hill riot on January 6th wasn't the first of its kind. They used to put bombs in
the Capitol and
some people were killed, but in terms of the Constitution, this is the greatest stress test since
1859, 1860 and
1861. And it's exactly what you described, which is the Democrats and Progressives and the Pelosis
Sanders and AOC want to push towards something like the Athenian mob, something like direct
democracy. So what does
that mean? Pack the Supreme Court. Get rid of the Electoral College. Let's bring in two new states
so we can get
Get rid of filibusters.
Exactly. Get rid of filibusters. If you get rid of the filibuster and you basically turn the Senate
like the House, it's like having two Houses of Representatives, simple majority rule. Leader sets
this, no one
doubts this is true in the House of Representatives, and it's supposed to be, but the Senate is
supposed to be
different. If you get rid of the filibuster, you erase the difference. And then if you get rid of
College, then all of a sudden the president is just a straight up or down electoral vote.
That's effectively what they did when they went to straight election of senators.
Because they became residents of Washington as opposed to residents of their own
Correct. By the way, I said that happened in the 1920s and it did, that was the first progressive
It actually happened in 1913.
Was it 1913? In 1920 the female suffrage where women were allowed to vote. But that period, the broad
say 1890 to 1920, just to bracket it and what else did we get in that period? The income tax and
In the Empire of Debt, we called it the Revolution of 1913.
Right. But the point is the progressive era we're living through now is the second progressive era.
progressive era was the one we just discussed.
Wilson was the highlight, but it started in the 1890s, William Jennings Bryan and all the things we
the point is there is what I call the liberal ratchet, but progressive ratchet is just as good a
word. And everyone
knows a ratchet is a tool that turns this way, but never turns back. So you turn it and it locks.
Now you don't have
to turn it again. If you do, it'll lock again, but it never goes in reverse. So the progressives are
patient. They get what they can when they can. And then there's a backlash.
What is it? All right. So let me ask you, because I think this is an important question. What
is it that you
think that they want that? I would call myself a libertarian with a small l. I don't vote. I
don't believe in
politics. I frankly abhor politics. But I also think that if you ignore them, then you ignore
them at your
What is it? I've read Lennon, Trotsky, Stalin, I've read what they wrote. I've read
everything that Marx has
ever written and I don't get what it is that they are after. What do they want? They want to
live at the expense
of other people.
Yeah. That's a little simplistic. I think what they want, what progressives want in this country
is a US version
what we just talked about in terms of the global agenda. And they said, "What do they want?"
Well, we just named
the things from the first progressive revolution. So it was the income tax, central bank, direct
senators, etc. So what do they want now? Get rid of the Electoral College, get rid of the
filibuster, pack the
Supreme Court, add two new states, four new senators, etc., which will make it easier to pass
whatever else is
the progressive agenda. We know what that is, because they tell us. This is my point. You don't
have to concoct
conspiracy. You don't have to be a mind reader. You just have to pay attention. They tell you
what they want.
Modern Monetary Theory is a big part of it.
So it's unlimited spending. If you read Stephanie Kelton, who's the big guru on Modern Monetary
Theory, she says
don't even need a government bond market. The idea there's too much debt, "We've got too many
bonds. We're not
to be able to sell the bonds." She's like, "Why do you need a bond market? Just give our
instructions to the Fed
tell them to send the money right to anybody you owe money to." I said, "Why do you have to sell
bonds to get
to deposit the Fed, for the Fed to buy the bonds, to give the money to the Treasury so you can
pay your bills?
do you need any of that? Just have the Fed wire the money directly to you or Raytheon or welfare
So the problem is that it obviates any kind of responsibility for the debt that you might
Well, but Professor Kelton would say, "Who cares?" Remember Alexander Hamilton invented the
and the debate at the time, this is now 1789, 1790 early in the Washington administration, the
debts from the Revolutionary War. We had just written IOUs that issued Continentals. That was
the form of money
they couldn't pay it back. And so the Congress said, "Well, that's easy. Just default, screw
them, too bad." And
Alexander Hamilton said no. He said, "Borrow more money and pay back that debt and you'll
establish your credit.
then when the new bonds come due, borrow some more and pay those and just keep rolling it over."
And all these
people who say, "Well, you'll never pay off the national debt." It's nonsense.
You don't have to pay off the national debt. You do have to roll it over. And that's the
the train comes. You don't have to pay it off, but you do have to borrow more to pay off this
fake Ponzi, in
words. And Alexander Hamilton invented it. That has been going strong for 230 years. Where does
it run off the
rails? Well again, paying back the national debt is not necessary, but rolling over the debt is
has to do with confidence and trust. And if people lose trust in the value of a dollar or lose
trust in the
of the United States to be able to issue new bonds at rates lower than Zimbabwe, then it fails.
That's when it
fails. And that's the Argentina problem.
See problem with Argentina, and again, I've studied Monetary Theory because I always say, if
you're going to
somebody, you have to know more about it than they do. So I've done a deep dive on it. And they
say, "Well, the
problem with Argentina is they print pesos, but they borrow dollars." And whenever you have to
pay back the debt
a currency that you don't print, you can go bankrupt. But if you're paying back the debt in
money you do print,
can never go bankrupt because you just keep paying it back. You just print more money to pay it
back. But there
a couple flaws in that. One is, and this is where Kelton really falls down, she doesn't
economics. She's just looking at a closed economy.
Yeah, like a closed system.
Like a closed system, right. But she doesn't understand, yeah, but other things can happen. There are
other ways to
fail. One of them is exchange rates. One of our newsletters, Tactical Currency
Profits, is focused just on
exchange rates. And yeah, you can print dollars and pay back dollar debt, but if the dollar devalues
other forms of money and you have hyperinflation and we start sweeping the dollars down the sewers,
all of which
just happened before and not that long ago, then all of a sudden it's unsustainable. Nobody wants
your debt. And by
the way, this has happened. I just described it in the abstract, but in 1977 when Jimmy Carter was
United States Treasury issued Treasury bonds, denominated in Swiss francs. They were called Carter
Bonds. It was US
I was a kid at the time, but I remember.
They were denominated Swiss Francs because nobody wanted dollars. And people go, "well, the
dollar would never
devalue 90%." Well actually it did in 1971, gold was $35 an ounce. In January 1980, gold was
$800 an ounce. So
you value dollars by weight of gold, the dollar devalued 90%. That's a 90% devaluation because
it took 10 times
much gold, or 20 times as many dollars to buy the same ounce of gold. So that means your dollar
has gone down in
that example about 95%. So those kinds of extreme evaluations have happened. People just don't
know how to
them. And there was a reputation for the dollar in 1977, because we issued bonds and Swiss
Francs. And we pulled
But that's the point. If you know it can happen, if you know it's a risk, you don't want to push
Whereas the Modern Monetary Theorist and Stephanie Kelton in particular, Bernie Sanders, she's
his main advisor.
He's Chairman of the Senate Budget Committee among other things. They don't understand
so that's where the booby traps are in the exchange rate and devaluation.
All right, let's move this on. I think we've probably beaten a dead horse so far. What do you
cryptocurrencies and the idea of the Fed coin? Which they've floated now, and I think they're in
the period of
accepting public comments on it. Like you have to say the idea and then take in a couple months
Under the Administrative Procedures Act, there have been changes in regulations and this applies in
some fashion to
the Federal Reserve. Yeah, you have to put out a proposal and then you have a certain comment
period. You can rush
it, but generally 90 days and then the comments come in and you have to have hearings. You have to
comments, you don't have to agree. But when you issue the final rule, you have to explain why you
didn't adhere to a
certain comment. So there's a whole process involved, but we're not at that stage yet. First of all,
there's a lot
of confusion between cryptocurrencies and central bank digital currencies.
Okay, that's kind of my question.
CBDCs. I just want to say CVGVs, but yeah, CBDC, Central Bank Digital Currencies are not
cryptocurrencies. Or if you
want to lump it all in, the greatest cryptocurrency in history is the US dollar because they haven't
last time the treasury issued a paper bond, like the kind your grandmother would have at and clip
the coupons, I
think it was 1979. So the dollar has been digital ever since the message traffic is encrypted. So
you can think of
the dollar as a very successful crypto currency. But the difference is that the central bank digital
the same currency in digital forms. So it'll still be a dollar, it'll still be a euro, it'll still
be a Chinese
yuan, it'll still be a Japanese yen. But it will be in digital form only. By the way, you have to
get rid of cash if
you're going to do this, because people will hoard the cash. So there's a whole separate issue.
Yeah. Like they're hoarding coins right now, right?
Correct. Yeah, well the coins actually have some value by metallic weight. If you have a 1965
quarter, it was
actually silver when I was a kid. A quarter was a quarter ounce of silver. And if you got one
from the '60s,
great, but they've been aluminum or zinc or something ever since. But that's a little different.
bank digital currencies are digital. The message traffic is encrypted. But they could
disintermediate the entire
banking system because one of the proposals is that you and I and everybody else in America, or
the world for
matter, have an account with the Fed. It'd be an Addison Wiggin or Jim Rickards' account with
the Fed. We'd have
on our iPhone. There'd be a little Fed coin app on the iPhone. And if I wanted to send you
money, I could just
it, it'd be kind of like Venmo or PayPal, something like that.
But I wouldn't need a bank account, neither with you. No checks, no wire transfers, no fees,
that you know. And MasterCard and Visa charge a 2½% merchant acquirer fee. When a restaurant
sells a lot of
food for credit cards, they don't take those to the bank. They sell them to what's called a
merchant acquirer bundles the bunch and delivers them to, say, MasterCard. MasterCard pays them,
goes to banks who issue MasterCards and collects all the money and then they put it on your bill
and then you
it. So that's like a five-step process with fees all along the way. Well, if you could have an
account with the
you could skip all of that. You could skip all of it, and it would just go from my account to
your account with
So interesting implications for the banking system, but that's a story for another day. So that's
the world of
central bank digital currencies. And the Chinese are furthest ahead. The US is working in the
R&D stage at
probably a year or two away. If it gets to it, then yeah, they'll have the kind of process we
the US is still a couple years away. But the Chinese are furthest along. They're past the pilot
are actually going to use the Winter Olympics starting in about 10 days or so as a rollout of
their central bank
digital currency. If you go to the Olympics, nothing's going.
Yeah, and they regulated blockchain too, right?
They have banished Blockchain. Banished use and Russia has, and actually the United States announced
today that they
want to regulate crypto. So if you're talking about cryptos, if you're talking about Bitcoin,
Ethereum and Ripple
and all that jazz, that's being squashed and regulated. Now the fans, the Bitcoin groupies will go,
"You can never
get us because we're in cyberspace," whatever. Fine, good luck. You'll be hunted down like
Somebody just tried to buy a piece of land from me only in Bitcoin. And I was like with the
environment that's going on right now, I'm not sure that's a good idea.
Yeah, you can do it. But you have to set up your own Bitcoin account. Maybe you have one to turn it
you can buy a cup of coffee with because you've got to buy coffee.
Land is land, crypto is crypto.
I'm sorry? Yeah, well that's right. But yeah. So the answer is, look, those things are out there.
Well, they're here. The central bank digital currencies are coming. There are other things underway.
doing a lot of research on this at the moment. I'm working on a new book and this is the first time
extensively on cryptocurrency so we've got some views there, some research that no one's ever seen
think it may change the debate. But that said, yeah, they're out there, and if you want some, knock
Yeah. All right. So give me one piece of good advice for an individual investor. Somebody
who's trying to
manage their own money right now.
Yeah. Well the key is diversification. Now that sounds incredibly obvious. "Oh yeah, big deal Jim.
It might sound obvious, but it doesn't hurt. But repeat it.
Well, here's the non-obvious part. Diversification does work. Not just in theory, but in practice.
does work, but most people don't know what diversification means. So I run into people all the time.
They go, "Well,
Jim, I'm fully diversified. I've got 50 different stocks in 10 different sectors. I've got
non-durables, mining, etc." And I go, "You're not diversified."
You're in stocks.
"You may have 50 stocks, but you have one asset class. It's called stocks and they go up together
and they go
together." Yeah, there's idiosyncrasies and the thing is, the noncorrelation of stocks exists
when you don't
It's precisely when you care the most that they all go down together. Correlation gets close to
So what's real diversification? Well, okay. Have a slice of stocks. That's fine. I'm not anti
stocks. Have a
cash, have a slice of real estate, have a slice of gold, have a slice of alternatives and that
can be hedge
private equity, venture capital, fine art, whatever, land, farms, etc. That's real
diversification because some
those things will be slightly... Oh, bonds, if we have to mention Treasury bonds. So, like,
bonds, 10-year Treasury bonds. Some of those things are correlated, but not that much. And some
of them are
inversely correlated, meaning when one goes up, the other one goes down. And the one that kind
of the portfolio is cash. Everyone hates cash, because it doesn't have a big yield, but they
that it does reduce volatility and it creates enormous optionality. If you're the one with cash
fall apart, you can go shopping. You're the one who can go out and pick up all the bargains and
no one's better
thanWarren Buffett. So I would counsel diversification, but my caveat would be you need real
faux diversification. So telling me you have 50 stocks, I kind of shrug and go, "That's not
All right. One last question, and then we can end it until the next time. How's that
That sounds good. The questions are not a problem. Sometimes the answers are too long, but I can deal
No, no, no. I'm wondering from your experience, because you've had the experience that you
have had in your
life. What would be the worst thing that somebody could do right now?
Well, it's kind of the inverse of the best thing. If the best thing is diversification, the worst
thing is over
concentration. So when I run into people, I own some gold and they say, "Well, Jim, you have gold.
How do you sleep
at night?" I'm like, "You're a hundred percent in stocks. How do you sleep at night?" And so when I
see people like
they're all in on Bitcoin or they're all in on stocks or they're all in on Vanguard, Fidelity Index
etc., or any asset class, that's an accident waiting to happen.
All right. Sounds good. Thanks Jim.
It's a pleasure. From your bolt old in which I won't say where it is. All right.