Speaker 1: How many of those bills are going to have to
be refinanced in addition to deficits of a couple trillion dollars.
As far as I can see, the current administration says, yeah,
we've got the deficit from six and a half percent
to GDP to five point nine percent of GDP, Yet
it's still two trillion dollars. National debt now has flown
through thirty eight trillion, is now sitting at thirty eight
point two trillion as of last week.
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Speaker 3: Ever, And welcome you are listening to and watching the
Financial Survival Network. I'm your host, Carrie Let's. Hey, we
are in mid November. Year is a rapidly coming to
a close. Dennis to Bergain is with us and now Dennis,
great to have you back on. So we're approaching the
end of the year. When you look back, what do
you think this year is going to be known for.
What will we if we even think about twenty twenty five,
besides the fact that it's a round number, what do
you think the biggest things this year were?
Speaker 1: What a good question? Well, thank you for having me on, Carrie.
Always a pleasure to catch up with you. I think
that this will be known. You know, the old saying
is hindsight is twenty twenty So when we look back
at this year, I think that we're going to see
that this was the year that the devaluation of fiat
currency really accelerated. I think that when you look at
what goal has done, what silver has done this year,
that's not a reflection of those metals being worth inherently more.
You can't make more rings out of an ounce of
gold today than you could twenty years ago. So I
think that's very indicative of how quickly fiad currencies are
being devalued. And I think when you look at the numbers,
that that is a trend that is likely going to accelerate.
So I think twenty twenty five, looking back in time,
I think it might be known as the tipping point
as far as fiat currencies are concerned.
Speaker 3: So interesting I was analyzing this really in depth. And
you know, we're both going to Martin Armstrong's conference, the
World Economic Conference in Orlando. It's this week from the
twenty first to the twenty third. I urge any of
you out there who got the money and the ability
to get to Orlando to go there. What Martin has
said and why he's been right and everybody else has
been wrong, is he says the dollar isn't just a
currency unit. It's a system. It's a system of control,
a system of financial management, and basically there is no
substitute for it at this point. And the bricks are
like a nice distraction, but the bricks will never be
a substitution for the dollar for the simple reason that
it's not a question of value. Yes, gold has value,
always has value. We're both into it. It's a question
of a system that functions to basically enable trade to
occur on a global basis and for debts to be
calculated and paid. For lack of a better term, I mean,
what's your thought on that, Well, I.
Speaker 1: Think that I would I would agree certainly that you know,
the dollar in the swift system is where most global
trade takes place. I think a couple of developments that,
maybe to play Devil's advocate for a little bit, I
think a couple of developments that have happened. One, as
of I believe August of this year, the number one
reserve asset as far as central banks are concerned around
the globe is now gold, no longer the US dollar.
So I think the move away from the dollar is unmistakable.
I mean, it's irrefutable. Yet, to use an analogy that
many people have used before, the dollar is still the
best house in a bad neighborhood. So I think I
think that you're you're you're seeing brick. You're seeing countries
work around the dollar. Not not entirely because the dollar
is being devalued, but when you look at what the
United States did when they confiscated Russian assets or froze
of Russian assets that were denominated in dollars, I think
it made the rest of the world say, well, wait
a minute, if they can do it to them, they
can do it to us too. We need to have
a plan beat, and I I think at this point
there are a lot of Plan b's out there. I
would agree none of them are ready to displace the dollar.
As the reserve currency. But you're seeing gold, you're seeing silver,
you know. I think this whole development of the Genius Act,
where we have stable coins now that have to be
back to one hundred percent by US treasuries if you're
issuing your own currency, I think that's a move for
the United States to create another market for US treasuries.
Speaker 3: So I think that.
Speaker 1: Shows some level of desperation. I don't think the dollar
is ready to be displaced anytime soon, but as I said,
I think the twenty twenty five maybe that may be
viewed as the tipping point. And I think at some
point you're going to see the rest of the world say, well,
wait a minute, we need to go back to a
tangible backed currency at commodity back currency.
Speaker 3: And I think that you're going to see that. Yeah,
I agree, but these things take time, right, It doesn't
just happen. And that's why all of the all of
the dollar is going to fail and all that. Sure,
they're right, eventually the system is going to collapse, the
debt it's unsustainable, but it's not going to happen like
according to anybody's timetable. It's going to happen kind of
when it happens, right, Yeah.
Speaker 1: I mean there's an old cliche that the what is
easier to predict than to win, and I think that's
certainly true here. But when you look at, like last week,
the US Treasury bond auction that took place. Wolf Richter
just wrote a piece on this, and I think that
there were six hundred and ninety four billion dollars of bonds, notes,
and bills sold, with over five hundred billion of them
sold with maturities of fifty two weeks or less. So
in that respect, you know, when the United States has
to go out and finance their debt, they're looking a
lot like the payday long owned business. Well, we know,
all loan you money for four weeks, We'll onwn your
money for fifty two weeks. But that's going to create
this this whole debt refinancing snowball. That's going to create
a big problem. So in a year, how many of
those bills are going to have to be refinanced in
addition to deficits of a couple of trillion dollars. As
far as they can see, the current administration says, yeah,
we've cut the deficit from six and a half percent
to GDP to five point nine percent of GDP, yet
it's still two trillion dollars. National debt now has flown
through thirty eight trillion, is now sitting at thirty eight
point two trillion as of last week.
Speaker 3: Yeah, so what you have thought about tariffs, I mean,
like Trump, Trump touched them like they're the key to
salvation of the country, and I just don't see it
that way. Yeah, I agree with you. I mean, look,
I think Trump has a point that one, we don't
manufacture things here anymore. And I think getting investment in
the United States to create jobs. You know, if there's
seventeen trillion dollars in investment, that will be a huge
boost to GDP. So I think in that sense he
is right. The problem is you don't build plans, you
don't make that shift overnight. And certainly we've allowed the
trade scals to be tipped not in our favor. We've
allowed you know, other countries to have access to the
best market in the world without paying an appropriate toll.
Speaker 1: So I think Trump's right about that. But to say
that we can run the country on tariff revenue, I
think is ridiculous when you look at the numbers. What
do we have three hundred billion dollars potentially in tariff
revenue this year two trillion dollar deficit. That's like using
a garden hose on a forest fire. I mean, you might,
it might make an impact for a minute, but you're
going to lose the war. So I just don't see
that as being a solution to the problem.
Speaker 3: Yeah, well that's his story, any sticking to it, right.
Speaker 1: So thank Carrie too. I mean, you look at this,
this idea now of a tariff dividend where all but
the highest earners in the US might get a check
for a couple thousand dollars. That just I that's just
another way of saying we're going to drop some more
stimulus because we don't like what the economy is doing.
Speaker 3: Yeah, it's that. I wish I would just be honest
about what they're doing here, you.
Speaker 1: Know, no exactly. I mean, okay, a tariff dividend, whatever
you call it, it's stimulus.
Speaker 3: Yeah, it's pump priming, right, it's a printing money. And
one of the things Martin Armstrong says is that the
lower interest rates are actually a bad sign for the
economy because it means that demand for capital isn't there.
And you know, I think he's got a point there.
Speaker 1: Well, and you know, look at what Trump proposed just recently,
and it was confirmed by Bill Poulty. The fact that
now they're looking at putting together a fifty year home mortgage,
that that just screams desperation has to let's get this
housing market going again.
Speaker 3: And what about the Trump's idea of printing a five
hundred dollars bill.
Speaker 1: Yeah, you know, I I think a five hundred dollars
bill may become a necessity if we continue to devalue.
I mean, we might why stop there, we might, Well,
maybe we should resurrected ten thousand dollars bill. I think
that had Woodrow Wilson.
Speaker 3: Hot Hey, like basically, you know, like the Zimbabwe you know,
one hundred trillion dollar banknote there, right.
Speaker 1: I had the same note framed in my office.
Speaker 3: Yeah. Right, So if that's the solution, then it's it's
really a pretty easy solution, painless, right, absolutely.
Speaker 1: And isn't it Zimbabwe that had signs on the porta
John's not to use Zimbabwe notes as toilet paper because
it clogged the systems.
Speaker 3: I never heard that, but I'll leave it to be
so I.
Speaker 1: Have a picture somewhere of that very sign.
Speaker 3: I love it. Well, that's the turn of the wheelbarrow
full of marks during the German hyper inflation, and the guy
went in to see if they would take the Marx
and when he came out he found the marks on
the ground and the wheelbarrow was stolen.
Speaker 1: Right, yeah, you know, this is what's the old saying,
same song, different verse. You go back to the Roman Empire,
to Weimar Germany, to John Laws France in the early
seventeen hundreds. I mean, there is one historical instance after
another that we've seen this cycle of currency creation followed
by a prosperity illusion, followed by painful inflation followed by deflation.
In real terms, this is nothing new.
Speaker 3: Now, there's nothing new under the sun, as Virgil said,
and that was said two thousand years ago. So the
question is now, are we all reduced to just buying
gold and silver and bitcoin or well, well, I certainly
think that that's probably a pretty good idea for you know,
a good share of your portfolio.
Speaker 1: When you look at US government finances, just transfer payments.
Now I have hit five trillion dollars annually, So that's Medicare, Medicaid,
Social Security SNAP, and unemployment benefits. Four point nine to
nine trillion was the last number that I saw. Interest
on the debt is one point two trillion, So that's
six point two trillion dollars. And Carrie, I grew up
when I learned math from flash cards and wooden rulers
in school, So I'm giving away my age a little
bit here. But that's a nine billion dollar deficit before
we ever get to spending money on the military and
everything else the government spends money on. This cannot be fixed,
so devaluation has to continue. So yeah, I think tangible
assets are certainly something that every viewer or listener should
be considering very seriously.
Speaker 3: Yeah, so what do you buy? Gold, silver, both bitcoin?
Speaker 1: What do you do you know? I have been just
true confessions here. I was late to the crypto party.
I have been more of a gold and silver advocate.
I would still say that I'm more of a gold
and silver advocate. At the beginning of this year, I
recommended to clients that they wait heavily towards silver just
because the gold silver ratio got to one hundred and fourteen.
It was an all time high. So that was a
kind of a no brainer recommendation. Now that we have
the gold silver ratio back around eighty, I'm a bit
more of an advocate of an equal waiting. I think
you want to own some gold, and I think you
want to own some silver, And I think you know,
by all all research that I have done, I think
this party is just getting started.
Speaker 3: I think they go much higher. Couldn't agree with you more,
could not agree with you more. But one of the
things Martin Armstrong said is the stock market's going to
keep going up. He's saying now sixty two thousand and
sixty five thousand by twenty thirty two, and that's when
he kind of sees the great changes taking place here.
Speaker 1: What are you thinking, Well, first of all, whenever I
get a chance to talk to Martin Armstrong, which is
not as frequently as you, I ask questions and take notes.
So I certainly wouldn't guess Martin Armstrong. I would say, though,
that stocks will be higher in nominal terms, probably not
real terms. So let me just give an example. If
we go back to gold as being money for most
of history. I have an example that I use in
one of the talks that I give that if you
go back to twenty twenty five years ago, the S
and P five hundred divided by the price of gold
per ounce was about five The S and P five
hundred was about twenty seven hundred. Gold was a little
over five hundred dollars an ounce, So if you take
twenty seven hundred divided by five hundred, it's a little
more than five ounces of gold to buy the S
and P five hundred. Today you've got the S and
P at about sixty six sixty seven sixty eight hundred
golds at four thousand. Now you can buy the entire
S and P five hundred for one and a half
ounces of gold. So, in real terms, stocks are down.
In nominal terms, priced in US dollars, stocks are up.
So I think again we're seeing deflation currently in real terms,
but in nominal terms. Yeah, I think Martin's probably right.
In fact, depending on how much the dollars devalued, I
think it could go much much higher.
Speaker 3: Yeah. So, and he's been right all long too. This
isn't like a new forecast. It's in the it's in
this book that I just wrote, the Armstrong Economic Code
that looks looking well.
Speaker 1: And Gary, let me congratulate you on having a number
one Amazon bestseller there.
Speaker 3: I appreciate that, Dennis, And yeah, it's a it's a
real charge, And I feel like I'm doing something useful interpreting,
passing through Martin's words through not a filter, but a mirror,
an amplifier, so the average person can understand what he's saying,
because I think it's really important, especially based on what
we've been talking about, that you understand the gravity of
the situation and the trends where it's inevitably all heading.
So You've got a book coming out pretty soon yourself right.
Speaker 1: As called Portfolio Playbook, and it's investing strategies for the
current economy.
Speaker 3: I think that the.
Speaker 1: Theme of the book is that you really don't want
to buy and hold in this environment. There are many
advisors that are I call them Wall Street advisors that
advocate a sixty forty portfolio of sixty percent in stocks
forty percent in bonds, and I think that investors moving
ahead are going to have to take more of a
targeted approach to be effective. I think a broad market
approach will fail people just you know, we started this
conversation by talking about twenty twenty five what will it
be known for. The Other thing I think it'll be
known for is the year that AI drove the market,
the stock market. This has not been a broad stock
market rally. Sixty to eighty percent of this upside, depending
on how you want to measure it. In this market,
sixty to eighty percent of the rally, I should say
is attributed to AI stock. So I think we've got
a big AI bubble here. I think AI is a
technology that's going to be here for a long time,
just like dot Com was. I'm old enough to remember
nineteen ninety nine and two thousand. I'm old enough to
remember when pets dot Com was a company that isn't more.
And I think we're to see AI companies. I mean,
take take a look at open Ai. Sarah Fryar, the CFO,
and within the last couple of weeks, came out and
said directly and then indirectly that the government may have
to backstop the loans that they need to pull from
investors to continue to keep that company viable. Here's a
company with thirteen billion dollars in revenues and one point
four trillion dollars in commitments. The math does not work.
Speaker 3: So you think they're trying to say they're too big
to fail.
Speaker 1: I think that's exactly what they're trying to trying to
get across. And Sam Alton and the CEO came out
and said that, you know, however government wants to be involved,
that's up to government. But he didn't pooh pooh the
idea of you know, government guarantees. And there's this whole
concern by many in that community that we have to
you know, win the AI race with China. So I
think that that's probably a story we're going to see
continue to develop and continue to rear its head as
time goes on.
Speaker 3: This is exactly like spot Mick. You know, there was
never a space race with Russia. It was strictly in
the minds it was a SiO. You know, it was
just one big SiO. Same exact thing here with AI.
I'm not buying any of this AI space race nonsense.
Been fooled once, I'm not getting fooled again. Dennis.
Speaker 1: You know, it's an interesting perspective I hadn't thought about,
but I would agree.
Speaker 3: With that, Yeah, because it's already been one. You know,
the whole government is being run by AI now, not
where I call it Trump GPT. It's not like Trump
just says, what's the AI say and does it. No,
It's what happens is they actually wargame every situation through
the AI and try to get a broader perspective, better strategy,
and in a lot of respects it's worked. The only
thing they haven't been able to figure out what to
do with Trump GPT is kind of lost, that is,
is the deficit. Nobody knows what to do with that.
But you know, I read a little satire that the
bureaucrats and the unions their last, their last bastion to
protect their government granted monopolies. They're using Kafka GPT, which
it's been has been trained on one hundred years of
DMV customer service loops and you know, and strikes and
all that. But basically they've lost, and you know, we're
just going to have to get used to it. The
only the last remaining place where AI really hasn't grabbed
hold yet that we can see the legal system.
Speaker 1: Yeah, I mean, I think that day is coming. I
mean when you look at a lot of well look
at what Amazon just came out and said. I mean,
they're they're anticipating by twenty thirty three up to six
hundred thousand job cuts. That's crazy. Look at the job
cuts we've already seen this year as a result of AYOT.
So hopefully it's like the Industrial Revolution, you know, we
make advances in one area and it creates higher paying,
higher skill jobs in another area. But I'm not convinced,
and I'm certainly not an expert in that area.
Speaker 3: I don't believe it's at all possible. I do agree
with you. Like thirty thousand less jobs in Amazon, I
think that's directly attributable to AI all these other tech platforms,
and it's only the beginning.
Speaker 1: You know, a.
Speaker 3: Company like Alphabet Google is.
Speaker 1: Run by AI literally yeah, and in Microsoft, and I
mean I know people at all these companies, and AI
is playing a bigger and bigger role in the day
to day management and administration of the company.
Speaker 3: Totally, all right, Dennis, appreciate your coming on. Best place
to find you is still Dennisthubergen dot com. Right, perfect,
all right, that's DNS, d N I S T U
B B E r g E N dot com. The
links in the show notes of this interview on Financial
Survival Network dot com appreciate your coming by. We'll see
you up in Orlando and safe travels.
Speaker 1: Thanks for having me and I will look forward to
catching up with you in Orlando.
Speaker 3: Take care.
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survival Network dot com. Financial Survival Network now more
than ever,