Speaker 1: Frankly, I'm just loving watching this from the theater of
having an alpha male just kind of stomp around the
world doing whatever he feels like, and everybody else just
get in line. Is It's hilarious. You know, I'm really
having fun watching Trump because he is totally in his element.
Speaker 2: You are listening to Carrie Lutz's Financial Survival Network, where
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Speaker 3: And welcome. You are listening to and watching the Financial
Survival Network. I'm your host, Carrie Leutz where with John Rabino.
It's been a while, John, Like, I don't even know
where to pick up with you that so much has
happened in a few short weeks since we last spoke.
You know, it's just one of those things. So we
got to start someplace. I guess interest rates, because everything
goes from interest rates, right hey, Cary.
Speaker 1: Yeah, there's a lot happening. We're kind of in the
middle of a revolution right now. On several different levels,
financial and political, geopolitical, and the indust rate thing is
normally that's kind of a dry topic, but at the
extremes of financial cycles, interest rates become really important. And
what might be happening now is that, well, we had
interest rates spike because we had inflation in twenty twenty two,
and now higher interest rates are draining a lot of
indebted entities, like governments went from having zero interest rates
on their bonds in a lot of cases two three, four,
five percent. Now that they've got to pay that spiking
interest expense is spiking deficits, which means the debt goes
up year after year at an accelerating rate, and so
you enter kind of a death spiral. And the US,
big chunks of Europe and Japan have all kind of
entered that period now where the central banks are kind
of either thinking about cutting interest rates or trying to
cut interest rates, but it's not working. The bond markets
are demanding higher and higher interest rates from governments that
are falling more and more deeply into debt. And if
that turns out to be the case, in other words,
if governments lose control of interest rates, then we are
in a death spiral. You know, that's the end of
this financial system because interest rates will keep going up
and that'll scare bond investors even more, and in rates
will go up even further, and we won't have any
tools for stopping that. So let's, you know, pay attention to,
for instance, Japan's thirty and forty year bonds. Who would
lend money to a government for forty years or fifty years?
That's crazy, but they do that, and the interest rates
on those bonds are going straight up. They're just spiking.
And in the US, what is it our thirty year
that's our longest term bond, and that's above five percent now,
and five percent is a deadly interest rate for a
lot of sectors of the economy. So big deal, Let's
pay attention and see where it goes. But it's potentially
a black Swan event.
Speaker 3: Yeah. We also had a recent bond rating cut in
the US.
Speaker 1: Yeah that in normal times wouldn't make any difference because
Fitch and Standard and Ports have already cut the US
credit rating from perfect to one notch below perfect, and
now Moodies came along did the same thing, which since
the other two rating agencies had already done that shouldn't
have been an earthquake. But when things start to turn,
you know, when the psychology of the market goes from
lass to anxious, then things that wouldn't have been a
big deal in the past become a big deal. And
that might be the case with this. But you know,
the real question is isn't why are they cutting the
credit rating for the US? It's why was the US
a triple A credit when the government has debt equal
to one hundred and twenty five percent of GDP and
that just scratches the surface of its actual indebtedness. You know,
we're a banana republic mathematically right now, So you wouldn't
expect the US to have a perfect credit rating, and
the markets are starting to recognize that now. So it
could be that the latest credit rating cut for the
US is just the beginning of a long series that
take us down to our intrinsic credit rating, which would
be somewhere in the BS I think, you know, not
ceas yet, but somewhere in the BEES.
Speaker 3: So you know, interesting thing about credit ratings I realize,
other than when I lived in New York City, every
place I ever lived in have triple A bond rating
and triple A credit rating, So there's definitely something to it.
Bond ratings. They're not important, right until they are important,
one of those things, right.
Speaker 1: Yeah, Yeah, I mean it facilitates borrowing very cheaply, which
is kind of kind of the problem as well as
the benefit, because if you're incentive to borrow a lot
of money because money is so cheap, like I feel
that way, you know, back when mortgages were like two
and a half percent, I really thought about just going
out and buying a house because I felt almost morally
obligated to take that cheap money that they were offering.
But it's the same thing for governments. I mean, if
you let them borrow very cheaply, then there's this whole
of things they can do to steal elections and otherwise,
you know, spend money on things that matter to them,
and so they'll go out and do it, and then
that leads them over and debted and near bankruptcy. New
York City has been near bankruptcy a couple of times.
And yeah, yeah, and so Florida, where you are now,
is phenomenally well run and in good shape financially, but
that won't last if people in Florida are overconfident and
start borrowing a lot of money. There's a saying attached
to this, something like low interest rates are the cause
of high interest rates or something like that. In other words,
if you borrow a lot of money, your financial viability
deteriorates and then your interest rate goes way up, and
it was the result really of those low interest rates
to begin with. So we're there a lot of big
entities out there, sovereign governments, sovereign bond markets are looking
like they're on the verge of a crisis. So we
got to see how that plays out. And we also
have to think about how how you invest for something
like that, because spiking interest rates are, for instance, not
good for gold and silver because they compete with bonds,
and if bonds yield seven percent and gold yields nothing,
then it's tough competition. But if there's a bond crisis
that leads central banks to really aggressively ease somehow, then
that's good for gold and silver because all that extra
money sloshing around has to go somewhere, and it partially
goes into precious metals. So I don't know from a
gold bugs perspective what I think about what's happening right now,
whether it's good news, whether it's a sign to go
out and buy gold and silver, or whether it's a
sign to pull back and wait for the second stage
of the process. So we're gonna have to see it,
and I don't know what to do exactly right.
Speaker 3: Now, all right, So we have to update an old
financial truism here which says the best cure for for
high price the best cure juice. Now my age is
kicking in here, but the best the best thing for
high prices is to bring low prices. You know, I
know what.
Speaker 1: Yeah, I know that's saying exactly I tried to do
a version of it just now. But it's a it's
a hard one because as you as you start saying it,
you realize you might not have it exactly right. And
when you finish what you think you're going to say,
it's not the right thing. And it's one of those sayings.
Speaker 3: So yeah, best cure for low prices is low prices.
The best cure for low rates is low rates because
you get so much act there into the system and
then and then the rates go up because the defaults
go up, the risk gets higher, and the nest cure
for high rates is high.
Speaker 1: Rates, right, Yeah, yes, the higher the better eventually. Yeah,
but it's it's that the valley you might have to
go through on the way to gold Bug Paradise. You know,
I'm just not sure because you know, stocks are historically overvalued.
Real estate is crazy overvalued in a lot of markets.
You know, house prices are just forty percent higher than
they should be based on people's incomes. So if you
raise interest rates, you crash a lot of overvalued assets.
And the question is what's the number, you know, what's
the ten year treasury yield that crashes the stock market?
And we don't really know, but I suspect five percent
would have a lot of people speculating about it. So
we're not far from that. We we could have one
bad week in the bond market and we're at five
percent for the ten year treasury. So so this is
possibly one of the a short term thing. Normally we
talk about long term trends, Harry, you know, but this
might be a next week kind of thing.
Speaker 3: It could happen any moment here. Let's face it, and
let's tie that in with Trump. Uh, we've had I
guess we're jeez, we're at one hundred what is that
for one hundred and twenty days since he was inaugurated,
almost to the day. I don't know if things have
gotten better or worse, but they sure as heck have
gotten a lot more interesting, haven't they.
Speaker 1: John Frankly, I'm just loving watching this from the theater
of having an alpha male just kind of stomp around
the world doing whatever he feels like and everybody else
just get in line. Is It's hilarious? You know, I'm
really having fun watching Trump because he is totally in
his element. You saw the Middle East trip just.
Speaker 3: Later here, oh man reba art bit. They rolled up
the camels, the horse emials.
Speaker 1: That's right, they had a camel, paid for it.
Speaker 3: Why didn't they put it in one of those carriers
like an emperor and just carry him across.
Speaker 1: You know, he's probably saving that for some other visit
to another country, but it's it's probably something that might happen.
And they gave him a four hundred million dollar yet
for yeah, and and and and so he gets back
here and the press is like, well, isn't that corrupt
that you're accepting these giant presents from people and He's like,
they offered it to me. What am I supposed to
say except thank you?
Speaker 3: Yeah, it's an insult, right insult to them.
Speaker 1: And so he and he and he totally skates.
Speaker 3: You know.
Speaker 1: The press is like, well, you know, there's nothing we
could do about it, So okay, let's move on to
the next thing. Are you really gonna run again in
twenty twenty eight, you know? But yeah, it's fun to watch.
He's accomplishing a lot in these visits. He's he's because
everybody he visits is obligated to invest in the United
States in some way. That's sort of the price of admission.
They have to, yeah, send three hundred billion dollars or
a new car factory or something like that back to
the US. And that's good, that's very that's very good
for us here. So so yeah, he's he's accomplishing a
lot of stuff. He's closed down the border. He's uh,
he's ripping DEI out of big institutions by the roots.
Speaker 3: Yeah, so he will one other thing, Uh, you know,
we're talking about the border and all that. The deficit
has actually decreased, you know, as a result of more
tariff revenue coming in and less theft, because why don't
they just say Doge is there to get rid of theft,
because it's theft. I mean, why do we have to
call it fraud abuse, whatever, it's theft? Call it for
what it is. I mean, I'm a grand scale.
Speaker 1: DOGE found out that a big chunk of the political
class is participating in a gigantic money laundering scheme now
involving NGOs and and quasi governmental agencies that aren't really
part of the government, but they kind of are at
the same time, and they're they're providing all these sinecures
for out of work political class people, swamp creatures, you know,
and they're all making huge amounts of money because the
initial capital comes from the government, comes from taxpayers, and
then it just gets spread out. You know, the Clinton Foundation,
for instance, it was either the Clinton Foundation or USAID
gave Chelsea Clinton something like thirty million dollars. Yeah, how
could that happen?
Speaker 3: You know, and and for her wedding, right, yeah, yes, yeah.
Speaker 1: And so that you know, take that and then multiply
it by thousand, and you get the graft that is
now going on out there. So if DOGE doesn't do
anything else, never cuts any spending at actual departments or anything.
The fact that they identified this criminal activity, this wandering
that's going on, is very good, you know. And if
if we start purp walking some of these people into courthouses,
that's gonna helpait phenomenal.
Speaker 3: Yeah.
Speaker 1: But at the same time, it looks like the deep
state has gotten to a lot of Trump's people, So
we're gonna have to see. So did you see Dan
Bongino and Cash Ptel speaking together. They were interviewed together
just in the.
Speaker 3: Last get that already, right?
Speaker 1: Yeah, they said Epstein killed himself, and there was something else.
There was another thing that was that they all along
have been saying something different and now they started saying
the thing that the deep state wants them to say.
So the question is who got to them and how?
And yeah, well, I mean which of their children did
they see Ia threatened to till or something like that. Oh,
they will totally do that, you know, because if if
you're in government and your kid gets into a car wreck,
there's no way to trace that back to the CIA
or or any number of other horrible things happening to him.
So I mean they could just what is it, Kilberden.
Speaker 3: The Tesla is it driving right into a into an embankment.
Speaker 1: And you know, the CIA has the capability of hacking
into self driving cars. I'm taking over right that that
capability exists out there somewhere and somebody bad has it.
So we're just seeing the beginning of that as a
control threat. So so anyhow, Yeah, there's just so much
going on right now.
Speaker 3: Or what Tavy Let's say, maybe they didn't really mean
it and they're just playing the script until they turn
the script on the players could be.
Speaker 1: Here's hoping, you know, because we still got We've got
the Epstein files out there. We've got all kinds of
things that Kennedy was supposed to do as far as
vaccines go, and food additives and stuff like that, and
he had to compromise a lot of his goals in
order to get through the Senate, you know, to be
actually approved by the Senate. So we don't know how
much is just promises he had to make if he
doesn't do the things he says he's going to do,
so we'll see. I mean, so much still has to happen,
but so much has happened. So from a political theater standpoint,
this is hilarious. From a good governance standpoint, there are
positive things to point to. So I'd give Trump his
first hundred days, one hundred and twenty days. And as
you know, because there's chaos, a lot of bad things
are happening, but he's accomplishing some really big things.
Speaker 3: Well.
Speaker 1: The biggest, of course, is that if he keeps war
from breaking out in Ukraine or the Middle East, that
alone is that alone makes himigrant president. You know, if
he gets us through the next few years without a
nuclear war with Russia, China or Iran, big deal. And
he seems to be trying that, although it looks like
Israel is trying to get a green light to bomb
Iran's nuclear plants, and that would be a black swan.
If something like that happens, I would be bad.
Speaker 3: But yes, but let's talk about China, because so Trump
is pushing for a resolution to the Ukraine Russia war.
When push comes to show, Zelenski will have to toe
the line or we'll do what we did in Vietnam.
Bao Dao remember him. It just yes, we.
Speaker 1: Assassinated the head of South Vietnam because we didn't like him, That's.
Speaker 3: Right, And that was a bill from there.
Speaker 1: That was actually John Kennedy, who was generally seen as
a pro peace president. You know, that's what got him killed.
That he didn't want to fight all the wars that
the deep state wanted to.
Speaker 3: Play it, so certainly one of the reasons.
Speaker 1: Yeah, yeah, yeah, but so even he is capable of
doing something like that. So you know, if Kennedy's capable
of assassinating somebody, somebody that they don't like, Trump is
truly that.
Speaker 3: These guys are like this Gordon Coke on the train, John,
that's so great. Yeah, the bag is there, and then
Macron gently hides it and the other guy hides the spoon,
and it's like, no wonder, no wonder. If the world's
such a mess, everybody's high, you know.
Speaker 1: And and it's not a surprise at all. These guys,
the people running Europe are just flat out degenerates, with
the exception of the lady in Italy. I like her.
Yeah she's a guy in Hungary too, Oh Victor Orburn Sorry,
but see he's not really running Europe. He's he's standing
on the sideline saying Nope, we're not going to do that. Nope,
we're not going to do that. And they're they're telling
the world destroy you if you don't do that, and
so I you know, I hope he survives and becomes
the template for European leaders with a little bit less authoritarianism.
But but there guy's running the big countries, you know,
and the UK and France. It's not a surprise at
all to see them hanging out doing coke on the
train while they're trying to supposedly keep us from out
of World War three. You know, they're coke is probably
actually good if you're a warmonger, right, because that would
that would fire you up to ship those long range
missiles to Ukraine.
Speaker 3: What the hell? Yeah, and so that's psychosis.
Speaker 1: Yeah, yeah, So so it's not a surprise given how
they are most times. You know, these guys basically actively
want to start World War three. Oh yeah, probably because
they want to distract their populace from the mistakes they've
made in running the country. I mean, you can't have
open borders for a decade and then get reelected. You
just can't do that if you're honest. So you have
to steal the election post ten years of open borders,
and you do that in a couple of ways. You
make your political opponents illegal, which they've done in France,
they're trying to do in Germany about Romania.
Speaker 3: Romania, they did that to the guy then.
Speaker 1: They yeah, but then they let a populist run. He
looked like he was going to win, and then he lost,
So they probably just stole that election.
Speaker 3: Yeah, well they removed him from the ballot, I thought,
or declared No, they declared the election invalid.
Speaker 1: Yeah, but then he won and then they yeah, they
had a new election. They let an ally of the
guy that they banned run as a populist, as a
you know, a maga Republican kind of guy, and they
let the election happen. And that guy was winning big
going into election day, and then he lost by a
pretty sizable margin when the actual votes were counted. So
that sounds an awful lot like twenty twenty in the US.
Speaker 3: You know, this is a template around the world, Bolsonaro.
Anyone you don't like who appears to be a populist
who might actually want the best for his country immediately
gets or not immediately, but over he's removed by with
extreme prejudice or law fair in their corrupt court system.
You know, the US is beginning. The court system is
beginning to look a lot like every other country's. One
thing I wanted to go over though, So you know
that if China withdrew its backing from Russia, the war
would be over in three months because they wouldn't be
able to sell their oil and it would be over
for Russia. They would have to seriously think about ending
the whole ploy. I think that's what's happening behind the
scenes with the China US trade negotiations, because if the
US embargoes all Chinese te whether it's through a tariff
or they just say no more, the US will find
a way to find get most of the other stuff.
You know, the rare earths are hard because not because
they're rare, but because the production. We've allowed China to
monopolize it. But that can be resolved. They probably have
a stockpile of all that stuff, all the unobtainium right
that we don't even know about. So the question is
those negotiations. China is behind the eight ball, their economies imploding,
both the economy and their infrastructure from all the tofu
drag construction, and we see signs that they're closing down
the fentanyl labs and the precursor companies they're doing. It
was a deal really made, and effectively we gave China
ninety days to prove that they're going to live by it.
Speaker 1: Well, no doubt the US is trying to separate China
and Russia because that's a scary alliance. The US nightmare alliance,
of course is Germany, Russia and China. And you know,
we were kind of heading in that direction before we
blew up the nord Stream tube pipeline. But yeah, I'm
not sure what you would have to give China and
Russia though, to to you know, break the diplomatic bonds
that they've created, because they're doing a lot of financial,
diplomatic and trade stuff together and that's really good for them.
And how far will they trust the US, Like if
they blow each other off and and you know kind
of sort of alie with the US, how long can
they trust us to keep that promise? So I don't know.
I think the US would have to offer those guys
a lot to make it both while because we're not trustworthy.
Speaker 3: You have to understand that China and Russia really aren't
natural allies. They flowed a war against each other China
would ideally like to colonize Siberia to Siberia is a
land without people, and China is a people without land,
and there's resources there. All this and there's a lot
of historic because China views Siberia as one of their
lost provinces from some ancient thing when probably a couple
of guys went there and made you know, Chinese food,
and they claimed it for their own. But they're not
really natural allies. We pushed them together, so separating them.
If we bring Russia back into swift, bring it back
into the world you know of you know, the World
Community of Nations, I think that's enough to pull them apart.
Agreeing not to put NATO in Ukraine and allowing them
to keep what they have and basically removing Zelenski one
means or another. Russia would be happy because they really
don't like China. There's no love between these two countries
since since when it was in the sixties when they
had their break because they didn't like each other's form
of communism. So it's going to be really interesting to
see if my theory's correct. I think it is, because
I think there was a lot more that took place
in those negotiations in Switzerland between the US and China,
than they're talking about the rampant ip theft. And you
haven't heard China making many threats against Taiwan lately either,
the last one with some military maneuver around the island
and planes buzzing it like I think it's closed two
months ago. That was the last thing you heard about
in the papers. But you have seen a lot if
you watch those YouTube channels of basically China's industrial economy
shutting down literally factories, unpaid workers, civil unrest. It's not
something they can afford. It's not something she can afford.
I think we're going to see a change in leadership
in China in the near future, John, we'll see that.
Speaker 1: Okay, what you're describing would be really good, But this
sounds like a big ask because you know that the
recent history, I mean, NATO has poisoned so many wells
and everything. But the other thing with dictatorships is that
the guy in charge usually tries to stay for too
long and then there's chaos when he leaves. Finally, and
you know, both g and Putin have been in power
for a long time and there's no obvious successor so
you get the potential for a civil war when either
one of them leaves or is deposed or whatever, and
so you can't really you can't necessarily trust them. I mean,
you might be able to trust promise from Putin, but
how long will Putin be there? And so you can't
know who's going to come next, and so so there's
more chaos no matter what kind of a deal we
cut right now, there is more turmoil coming, I think,
just because you know, the world has so many dictators
in powerful places that aren't going to go easily, and
so when it happens, yeah, so so in other words,
the end of history is not anywhere near, but there's
still going to be a lot of crazy stuff going
on out there. But I would I'd be happy if
we just don't knew each other for the next ten years.
You know, if we avoid a nuclear war for ten years,
that would be a pretty big win considering where we
started three years ago.
Speaker 3: Yeah, well, interesting times. May we live in interesting times
and that we definitely are. So if you want to
check it out, go to John Substack orbino dots stack
dot com. I actually set up a substack recently, but
don't worry about that the links are all in the
show notes and book meant to tell you John. The
book the world, according to Martin Armstrong conversations with the
master forecast are passing one thousand copies probably tomorrow sold
with no giveaways, no discounts, no nothing that people just
buying the book, great reviews, links in the show notes.
You can find it in Amazon or wherever fine books
used to be sold. And John, we'll catch up with
you in a few weeks. Be well.
Speaker 1: Thanks Gerry, take care, thanks.
Speaker 2: For listening to carry Letz's Financial Survival Network, your solution
to today's trying times. For the latest, go to Financial
Survivalnetwork dot com. Financial Survival Network now more than ever