Join Badlands Media as we discuss all the lasts news relating to our economy.
Prepare to have your economic perspective broadened as we sit down with Dr. Kirk Elliot and delve into a world where US Treasuries are downgraded by Fitch. Picture a scenario wherein the renowned status of the US dollar as the global reserve currency is under threat. We'll unearth the potential implications, including the possibility of soaring interest rates, inflationary pressures, and the role of the BRICS nations' meeting in August. Inspired by Voltaire, we'll discuss the provocative notion of paper money reverting to its intrinsic value - zero.
We'll also take you on a journey of economic survival in these uncertain times, emphasizing the importance of freedom preservation and investment protection. Learn how a consultation with Kirk's team at Badlands can anchor you in the stormy market conditions. And as if that's not enough, we'll cast our eyes further afield to the upcoming elections in Argentina and the potential for a 20% currency devaluation. Brace yourself as we shine a light on these complex economic puzzles and their potential ripple effects on your financial future.
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Welcome to the Economic Update. My name is Sean Morgan. I'm the host of the Sean Morgan Report on AMP News. I'm here with Dr Kirk Elliott. So, kirk, you know, I saw in the news the US Treasuries like the safest investment on planet Earth, supposedly just downgraded by Fitch, the biggest rating agency, warren Buffett's buying treasuries despite that. I mean. So is this just a matter of perception? What do you think about this news?Speaker 2:
Well, I think it's actually really big, it's actually Huge news. So, when you think about it, the world's reserve currency, which is still the US dollar, has to have the best credit rating available. I mean, it has to, right. But if we don't, I think they're setting the stage for us not being the world's reserve currency. Right? So we had triple a, got downgraded to double a, plus is what it did, so it's a downgrade. Now let's compare that to like a regular bond market. Right, normally the bellwether, you know 10 year, 30 year US Treasury bonds Gonna pay a very low yield because it's supposed to be the safest investment on Earth. Right, and it's been the safest investment on Earth because we have a lot of money coming into America, we're America, we have productivity, we have revenue and it's safe and we have a printing press if you ever get into problems. Right. So now for for if you had a junk bond, which is the opposite end of the spectrum that you have to entice that investor with a higher yield, the higher rate of return, because they need a better return for the risk that they're taking, thinking, okay, I'm gonna invest in this junk bond because who knows if the company's even gonna be around six months from now. So while I'm doing it, I need a higher rate of return. So what does it mean when they downgrade? It means, you know, we've been hearing Jerome Powell say well, we'll probably raise rates again in September, but then we can go on a pause because we're winning this war on inflation, right? So no, a, they're not. And B, I think this kills any pause, because now you have to raise rates because of the downgrade, right? So the rest of the world isn't going to want US Treasuries on a downgrade because perception is now it's not the safest bellwether treasury bond in the world. Maybe the bricks one is, maybe anything else is right, so so, but it's no longer a US Treasury that has a triple a rating. So of course, after that announcement was made, janet Yellen, treasury Secretary, says Fitch, fitch rating doesn't know what they're talking about. And then Jamie Diamond of JP Morgan Chase says this is, this is unreasonable, uncalled for. This doesn't even make any sense. It's like, okay, but it does make sense. I mean, they've been. Does actually look at the? Does they're the best rating agency on the planet just because they downgrade you? I mean, of course they're gonna disagree with it at the federal level, right, but but why did they downgrade? So there's two things that they probably look at more than others. Number one is how much debt do you have? And number two, how much income do you have to sustain that debt, right? So those are the two big things that they would look at. Well, we've got 32 trillion dollars worth of debt and, with the removal of the petrodollar Country signing bilateral trade agreements, no more inherent built-in demand For us treasuries. Well, now they're gonna have to force themselves to print money to pay off our debts. This is a problem. This is why Fitch said well, with that in mind, we and and lowering wages, rising interest rates, inflationary pressures, rising taxes, we we have no choice but to actually downgrade, right?Speaker 1:
So of course the hammer piece and is it relative to the other treasuries out there, the other governments and their fiscal stance? You know, Fitch has to be looking at all the other countries and their fiscal compared to the US debt levels and income levels and it's not looking so good for us at the moment.Speaker 2:
No, and it's not like some of the other ratings. You know, bureaus, that you can actually pay them to get a good grade. So, Fitch doesn't act like that right. They're truly independent. They're gonna give what they think, and I'm sure that analysts is probably getting all kinds of threats. It's like what have you done? Right, but it's not just one analyst. I'm sure it's a board of analysts that is.Speaker 1:
It's the one rating that could change the way we perceive the whole global financial game, and I mean it couldn't be happening at a more appropriate time, could it, with the BRICS meeting in August and Durbin to be announcing perhaps a new currency to challenge that type of hegemony.Speaker 2:
I mean, it's a massive challenge, right and so. But there's other challenges too, right? So kind of a bigger, broader view. You know the BRICS nations meeting that's coming up in August. They wanna replace the US dollars the world's reserve currency. This doesn't help the US dollar, right so? But you making a big change like that, that's a paradigm shift. That's like the pivot of all pivots, right? You actually have to have people running scared to say, okay, this is a good idea, the BRICS nation should be the world's reserve currency, right? So how do you do that? Through systematic destruction of the economy as we know it. So we've got all these inflationary pressures. And Voltaire, right, the old philosopher from way back in the day. He expressed. He had a really good quote that I was reading over the weekend paper money eventually returns to its intrinsic value zero, right? Because when you print without discretion, it's going to devalue, devalue, devalue. It's gonna take more of that junk currency to buy valuable goods and services. It ultimately always goes to zero, right? So here's where you start to look at that, why our currencies are collapsing. But banks are also collapsing, sean. So the bank failures in mid-March, starting with Silicon Valley, were just a warning shot. It was a shot across the bow Because, if you think about it, what do banks need to survive? Banks need high interest rates and a reduction in their loan portfolio to survive. Why do I say that? Because the people with higher interest rates they're not having the propensity to pay off their mortgages and pay off their loans. They're defaulting, right. So higher interest rates means they're bringing in more money. A reduction in their loan portfolio is what they need to survive, because they can't have all these bad loans out there right Now. Borrowers need exactly the opposite. Borrowers end, both commercial and private. They need lower interest rates and more credit to survive. So it's exactly the opposite. So who's gonna win? Are the banks gonna win, you know and basically stick it to every consumer, or are the consumers gonna win and banks fail? There's not a good outcome here, right? So basically, the way I see this ending up is both sides end up losing and borrowers will default and banks will go bankrupt. Because of where we are Now, this actually brings in like a perfect scenario of wealth destruction. So you look at the debt rising interest rates kill people that have debt, countries that have debt. You know institutions that have debt, right? So global debt has gone up 80 times, like 80. From 1971 until now. So what happened in 1971? Hey, the World Economic Forum became a thing and it took us off the gold standard internationally. Boom, at that point, completely fee hot.Speaker 1:
But they also considered it the petrodollar, and that's one thing I know. Maybe you were on a train of thought and you didn't finish it, but I just didn't want to forget this important news that just broke is that Venezuela wants to join the BRICS, and they've got a whole bunch of oil under the ground. They might be too stupid to get it out of the ground with the dictatorship they have right now, but they've got a lot of oil, and so does Iran and Saudi Arabia and all these other countries that are with the BRICS, and so now we've got energy policy that could be controlled by the BRICS and not the US.Speaker 2:
Well for sure. And so the petrodollar now becomes the petrobrick, right. So there's zero demand for US dollars moving forward. I mean, venezuela is big, it might be the fourth largest oil producer in the world, right, but they're so backwards. But you just put some structure to that and they've got a ton of oil reserves. So does Iran, so does all these other countries that are joining these BRICS consortium. So, between 1971 and today, global debt went from 4 trillion to 325 trillion. Okay, that's big, that's an 80 times increase. But moving forward, if you were looking at it on a chart, it's almost like straight up, sean. So between now and 2030, seven years from now global debt should surpass three plus quadrillion. It's like Q. It's like I was looking at the numbers. It's like wait a second, that's not a B or a T for billion or trillion behind the number. It's like what? So we're talking about quadrillions of dollars of debt. So when you have high interest rates and high inflation attached to that debt, you're going to have both sovereign and private defaults. Sovereign, meaning countries are going to go bankrupt. Private defaults, banks, companies and people right, all of them. So here's what happens.Speaker 1:
We're already seeing the signs Turkey, Argentina, certain countries are struggling. Yeah, See over 100% inflation.Speaker 2:
And we saw a kind of a precursor foreshadowing of things to come in France recently. Because what happens when you have high interest rates, high taxes, unsustainable, that you've got countries that start to collapse? Well, france was seeing their pension system about to collapse. So what did they do? They brought in austerity measures and they told the so this is a socialist nation. People pay higher taxes in a socialist nation so they can be taken care of the rest of their life, right? So in France, when they said hey, we run out of money, sorry, every one of you who've been paying higher taxes in our socialist country, you're now not going to be able to get your retirement benefits for a while. We're raising your retirement age, and so that's one austerity measure. The other one that governments take is they lower the benefits. So this is what I see coming in America higher taxes, bail ins, the failure of pension and social security system down the road, because they've truly run out of money, right, and it's almost like a Ponzi scheme in the sense of you've got more people getting benefits than you have people paying into the system now. So there's going to be austerity measures, and Janet Yellen already said too big to fail. No such thing anymore Once the banks started to failing. We're just not going to pay for it anymore. We're going to have the consumers, we're going to have the people who have deposits at these banks bail out their own banks. That's what a bail in is. So, ultimately, the difference between a bail out and a bail in is not much different. We still end up paying for all of it, but it's who has the name on the bill. It's either the US government or it's us. The same is the end result. The government pays for it. It comes through higher taxes and inflation. We still pay for it. They're just not going to. I'm looking at bail ins, which was passed into legislation during Dodd-Frank bill during the Obama administration. I think we're going to see austerity measures moving forward as countries start to run out of money because of this debt and higher interest rates and higher inflationary pressure. I don't see a light immediately at the end of this tunnel, but I do see a light at the end of the tunnel eventually. I just think it's going to get dark before we get to that point of a total change, a change in the system, a change in the way that things are done to maybe state chartered banks get out of the federal system, or some tangible backing to currencies to actually give it something real accountability, transparency all of that needs to be done for this system to change.Speaker 1:
It's designed to break. And that's why the political side is so important, because the regime in charge in the US right now they want to come after investors. They want to increase capital gains tax. They want to increase all kinds of taxes so that it really hurts us, the citizens and investors. Investors will flee the US and go to jurisdictions where they can invest with low taxation, which just brings the system down faster. Let's go back to oil real quickly. I want to make sure that people understand that if we have a political system like we have now, with the regime like the Biden regime, capturing our government and forcing us not to be an oil producing nation, then we're at the mercy of OPEC. We're at the mercy of the BRICS nations if they're determining oil policy. We have to show that we actually have oil production capabilities. We can't shut down all the pipelines. We can't shut down all exploration. Yet that's exactly what the Biden administration is doing. So we are really in a vulnerable place economically if we don't politically change the policy on energy. So I guess people have to figure out what to do with their own pocketbooks now, no matter how it turns out politically. You can't just say oh, don't worry about the white hats take care of everything. We should prepare for the worst, shouldn't we? How can people do that financially, what are their options and how can people talk to your team?Speaker 2:
Well, the easy thing is to allocate into something that's tangible. Get out of the system, do something that's real, not a digital entity you're not a digital transaction Something real like gold and silver. Take delivery of it or store it. So call our office 1706,05,39, and just say Sean sent me at Badlands.Speaker 1:
Yeah. So this is where we could easy thing to do, because it's something you can do right now. Now, politically, vote with your voice, Call your state legislator and say, hey, do what Texas is doing, do what Alaska is doing, and say I'm just simply not going to vote for you unless you actually pass legislation for a state chartered bank to get out of the federal system. So that's down the road. That's something that we should always be working on is maintaining our freedoms, but this one, it's simple. Just give our office a call, say Sean at Badlands sent me, or you can actually just go to the link that we have.Speaker 1:
You can schedule a call with Kirk's team, get a free precious metals consultation, no pressure. You decide what to do, but it makes sense to me right now, with people's retirement money in the system that's about to blow, to try to figure out how to hedge against that. Well, thank you, kirk, for giving us this update. I'm looking forward to see next week what's happening, because Argentina is having elections. They're looking at a 20 percent downgrade in their currency to devalue their currency by 20 percent with these elections coming up. So that's just another piece of the puzzle, another domino that could fall. That could trigger other things in Latin America and beyond. We'll be talking about that next week. God bless, kirk, god bless everyone at Badlands. See you next time.