"The US is bankrupt...and it's only going to get worse from here!" - Jeff Berwick Interview
Published in on November 7, 2013
Jeff Berwick from The Dollar Vigilante chats with Vanessa Collette about the current state of the US economy and the latest news from the Bitcoin phenomenon. Filmed at Cambridge House's Silver Summit 2013 in Spokane, WA. Always entertaining!
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Read the transcript here:
Vanessa Collette: Welcome to Cambridge House Live. I’m here at the 11th Annual Silver Summit in Spokane, Washington. I’m joined by Jeff Berwick, founder of the Dollar Vigilante and CEO of TDV Media– welcome Jeff great to have you back here again.
Jeff Berwick: Thank you Vanessa, it’s always great.
VC: Jeff you have expressed your dislike of the state many times, what is your take on the US government shutdown that we just witnessed?
JB: Well I wish they really shut down they didn't obviously they shut down -- they put up some cones around some parks they put up some closed gates on some national parks…the CIA the FBI the NSA the DEA and like thousands of others alphabet soup agencies all-stayed open – they actually shut down Silk Road I don’t know if you know what that is during that time so it was a obviously a fake shut down um but the funny part to me was how people some people were worried about it. Like did anyone notice any change in their life? The federal government does nothing except for destroy lives and cause problems for people
VC: That’s your take.
JB: It’s definitely my take.
VC: Jeff what does all that tell you about the state of the US economy in general?
JB: Well that's a big part of it is the debt ‘ceiling’ which I call the debt target because they always hit it. That was a big issue that they had, that they were supposedly talking about -- it’s all BS—don’t know it I can swear on your program but it's BS - the US government the federal government is bankrupt, it's insolvent and its the only going to get worse from here they're going into a trillion dollars with the debt per year right now - just to give some sort of perspective in 1980 the total debt of the US government was $900 billion so less than a trillion dollars and now every single year they go up more than a trillion dollars. If you look at the total debt it is now seventeen trillion dollars. If the interest rates were allowed to go to their natural market level that would mean 1.7 trillion dollars per year in interest payments alone and the total tax extortion theft base revenue of the US government is about $2 trillion dollars. So all their a theft would actually go towards interest rate payments alone if interest rates rose and that's why Ben Bernanke he and now the incoming Janet Yellen which is going to be even worse-- just like in Rome it's always worse and worse and worse I will always keep it at 0 percent.
VC: What do you mean by ‘just like in a Rome it always gets worse and worse’?
JB: Well that's what happened in Rome is every Cesar after Cesar after Cesar everyone thought that's going to be the worst one and then this other guy comes in, Caligula comes in and you know just worse and worse in this is exact same in the US everyone thought to George W Bush was terrible now we have Barack Hussein Obama and now they're talking about for 2016, if there even is an election because this whole country is falling apart, if there is we're talking about Michelle Obama and Hillary Clinton as the democrats tickets for 2016.
VC: Haven't heard that one yet..
JB: You're lucky.
VC: Well you’ve said that it was going to get hard to buy gold or silver with paper currency in the coming years – do you see any trend towards that?
JB: Oh, absolutely if you look at Cyprus- when Cyprus happened to all the banks in the Cyprus closed and they actually stole fifty percent of the Cyprus depositors money there was actually a period time actual our research staff called of almost everywhere in the world in and said can we buy gold or silver right now and everyone said no. And that was just Cyprus- Cyprus is a small place as a tiny little island a tiny amount of money in the grand scheme of things. When this starts to really fall apart which i think will happen in the next couple years of years if you don't own gold and silver right now you will not be able to buy it for Fiat currency in the next few years.
VC: And why is that?
JB: Because people won't accept that because it will start to hyperinflate. Europe is going to go into a major crisis.
What happened in Cyprus going to happen in Italy it's going to happen in France it’s going to happen in Spain – in Canada, 100 percent it's going to happen in the US. It’s going happen ken is going to happen in Australia. All these countries actually put in bail in clauses which is what Cyprus did -actual legislation. So as these all start to collapse and this will happen in the next couple years -people won't accept any amount of money for precious metals.
VC: You also said that it's become hard to buy physical gold are you seeing any of that?
JB: Well what I was saying was during that period of time it was very difficult now you still can but it's not that easy really the paper and the physical price are really- it's almost like two different worlds and it's going to get worse and worse – we’re sort of still in the eye of the hurricane right now, people still believe that everything's okay they still believe in green shoots, they still believe in recovery, it's not going to happen. But it is definitely getting harder and harder to buy physical- but to actually by these ETF's, to invest in futures all those things you can still do but that's not real precious metals you don't actually own any precious metal up but as we go further along and I'm talking next one or two years maybe a little longer it'll be very hard to buy physical and actually even if the own physical it will be very difficult to keep it because the governments who purport to own you which are most Western governments actually almost every government on earth will start to confiscate- it's not a crazy idea, this has happened in 1933 in the US.
VC: Now moving over to Bitcoin- Bitcoin has continued to gain popularity and momentum --what do you think of the popularity it’s been gaining and are you still involved in any way?
JB: I'm definitely involved in terms that I love it… It started in 2009, I heard about it in 2011 and it was about three dollars at that point and I started doing some Bitcoin businesses last year or this year sorry I don't
remember exactly but it was around $35 dollars actually when Cyprus happened and it went to two hundred fifty dollars and then it had a draw a major drawback and went down to about fifty dollars per Bitcoin - it's currently as we speak about $210. I believe if Bitcoin continues to have an uptake with the population and continues to be used as a currency it could go to - and I don’t mean to talk about crazy numbers here – but we're talking millions dollars a per Bitcoin.
VC: Wow, that’s quite an increase.
JB: It’s supply and demand and people are starting to realize these paper currencies with just pictures of criminals painted on them and like on the other side there's this pyramid with an all-seeing eye. People are starting to realize they’ve been fooleld. We’ve been fooled since 1913 with the Federal Reserve and we really got fooled – I don't mean we but- the people in general- in 1971. And more and more people, especially younger people who are not seeing any of the good sides of government or central banking – seeing all the negative sides - they're born into two hundred fifty thousand dollars’ worth of debt in the US. You want to go to school -which is pointless, it's mostly useless- costs you a hundred thousand dollars. The younger people are starting to realize – there is starting to be an awakening that all this stuff is BS and a lot of people are gravitating towards Bitcoin- especially in places like Argentina where they have capital controls like real capital controls right now- we're going to see it in the US - we're seeing in the US- even in Germany right now, Berlin there's so many places that accept Bitcoin as currency and the central banks are very scared of this but they can't stop it.
VC: So you're seeing banks cracking down on Bitcoin more and more?
JB: It's really interesting because all over the world every single government every single central bank is doing different things. In Thailand they're trying to crack down. In the US are defintely cracking down- they've actually subpoenaed, a few months ago, anyone to do with Bitcoin to go to New York to talk in front of Congress - which thankfully I did not get subpoenaed- I wouldn't go it they did but thankfully they didn’t. Canada flip-flopped -they at first closed many bank accounts of anyone to do with Bitcoin and now they're kind of saying okay, Bitcoin’s OK. Europe -every country’s different- France is kind of Open to it, you know these governments are all crazy so they change their minds all the time but who cares because they can’t actually stop Bitcoin.
VC: How do you see Bitcoin versus gold and silver?
JB: That's an interesting question -you always ask interesting questions. I think they're both important. The biggest problem with gold and silver is it’s physical. So there was a person who was traveling from Italy to I believe Switzerland recently and he had over a million dollars’ worth of gold in his car and he got stopped by the Mafia -the
the gangs- the cops- the government- and they stole all his gold they said wait -where'd you get it? Because of that it's dangerous because we have a world full of very dangerous gangs right now. The only difference between government and mafia is size and so we have a world full of mafias giant mafias. The one thing great about Bitcoin is they can't stop it - they can't even find out where it is so they took over Silk Road recently they found the person who is running Silk Road.
VC: Not sure everyone is familiar with Silk Road.
JB: Okay so Silk Road was a like the e-bay of a black market - and black market just means free market but they found him - the FBI during the shutdown and he had eighty million dollars worth of Bitcoin - they didn't know his password for the Bitcoin - so they can't get to it- so this is very interesting you can protect some with your wealth putting it into Bitcoin. It's speculative- its new it's different but a the actual designer of Bitcoin designed it almost exactly the way gold was. So to create a Bitcoin you actually have to mine it. You mine it with computers it's incredibly interesting for people who are interested in gold and silver they should really look into Bitcoin as a second option.
VC: And what's the downside risk with Bitcoin?
JB: Well just like with anything like you could say with gold the downside is the government will take it all
Right. With Bitcoins the downside is they turn of the Internet because without the internet you can’t have Bitcoin. The other downside is that the government could come after its so hard that they would a make people stop using it because the less people use it less, the less the value is going to be and that's why the value is rising because it is being used more and more – and is risk everywhere, I call this period of time right now the most dangerous time in human history for capital. It's very dangerous and you have to be very safe.
VC: Just as we wrap up Jeff one of the questions I really want to get to is you with the US shut down- and that was a major economic threat but it didn't really seem to affect gold and silver the way that a lot of people expected - why do you think that is?
JB: Well I actually wrote about that and I think you’re wrong, sorry. I actually think less government there is so the government shutdown I believe about 20 percent so you actually saw the stock market rise and gold and silver fell a bit. And many gold bugs were very confused about that. No - the less government there is the better it is for the economy and the better the economy is the worse it is for gold. Gold is sort of a counterweight to the economy and prosperity and the monetary system so if the government shutdown 100 percent that be very bad for gold.
VC: So you weren’t surprised at all to see how it reacted?
JB: No I was not surprised at all.
VC: Well Jeff, it was a pleasure as ever to chat with you, thank you so much for stopping by.
JB: Oh, it’s always my pleasure.
Subscribe to us on You Tube for more video updates!
Read the transcript here:
Vanessa Collette: Welcome to Cambridge House Live. I’m here at the 11th Annual Silver Summit in Spokane, Washington. I’m joined by Jeff Berwick, founder of the Dollar Vigilante and CEO of TDV Media– welcome Jeff great to have you back here again.
Jeff Berwick: Thank you Vanessa, it’s always great.
VC: Jeff you have expressed your dislike of the state many times, what is your take on the US government shutdown that we just witnessed?
JB: Well I wish they really shut down they didn't obviously they shut down -- they put up some cones around some parks they put up some closed gates on some national parks…the CIA the FBI the NSA the DEA and like thousands of others alphabet soup agencies all-stayed open – they actually shut down Silk Road I don’t know if you know what that is during that time so it was a obviously a fake shut down um but the funny part to me was how people some people were worried about it. Like did anyone notice any change in their life? The federal government does nothing except for destroy lives and cause problems for people
VC: That’s your take.
JB: It’s definitely my take.
VC: Jeff what does all that tell you about the state of the US economy in general?
JB: Well that's a big part of it is the debt ‘ceiling’ which I call the debt target because they always hit it. That was a big issue that they had, that they were supposedly talking about -- it’s all BS—don’t know it I can swear on your program but it's BS - the US government the federal government is bankrupt, it's insolvent and its the only going to get worse from here they're going into a trillion dollars with the debt per year right now - just to give some sort of perspective in 1980 the total debt of the US government was $900 billion so less than a trillion dollars and now every single year they go up more than a trillion dollars. If you look at the total debt it is now seventeen trillion dollars. If the interest rates were allowed to go to their natural market level that would mean 1.7 trillion dollars per year in interest payments alone and the total tax extortion theft base revenue of the US government is about $2 trillion dollars. So all their a theft would actually go towards interest rate payments alone if interest rates rose and that's why Ben Bernanke he and now the incoming Janet Yellen which is going to be even worse-- just like in Rome it's always worse and worse and worse I will always keep it at 0 percent.
VC: What do you mean by ‘just like in a Rome it always gets worse and worse’?
JB: Well that's what happened in Rome is every Cesar after Cesar after Cesar everyone thought that's going to be the worst one and then this other guy comes in, Caligula comes in and you know just worse and worse in this is exact same in the US everyone thought to George W Bush was terrible now we have Barack Hussein Obama and now they're talking about for 2016, if there even is an election because this whole country is falling apart, if there is we're talking about Michelle Obama and Hillary Clinton as the democrats tickets for 2016.
VC: Haven't heard that one yet..
JB: You're lucky.
VC: Well you’ve said that it was going to get hard to buy gold or silver with paper currency in the coming years – do you see any trend towards that?
JB: Oh, absolutely if you look at Cyprus- when Cyprus happened to all the banks in the Cyprus closed and they actually stole fifty percent of the Cyprus depositors money there was actually a period time actual our research staff called of almost everywhere in the world in and said can we buy gold or silver right now and everyone said no. And that was just Cyprus- Cyprus is a small place as a tiny little island a tiny amount of money in the grand scheme of things. When this starts to really fall apart which i think will happen in the next couple years of years if you don't own gold and silver right now you will not be able to buy it for Fiat currency in the next few years.
VC: And why is that?
JB: Because people won't accept that because it will start to hyperinflate. Europe is going to go into a major crisis.
What happened in Cyprus going to happen in Italy it's going to happen in France it’s going to happen in Spain – in Canada, 100 percent it's going to happen in the US. It’s going happen ken is going to happen in Australia. All these countries actually put in bail in clauses which is what Cyprus did -actual legislation. So as these all start to collapse and this will happen in the next couple years -people won't accept any amount of money for precious metals.
VC: You also said that it's become hard to buy physical gold are you seeing any of that?
JB: Well what I was saying was during that period of time it was very difficult now you still can but it's not that easy really the paper and the physical price are really- it's almost like two different worlds and it's going to get worse and worse – we’re sort of still in the eye of the hurricane right now, people still believe that everything's okay they still believe in green shoots, they still believe in recovery, it's not going to happen. But it is definitely getting harder and harder to buy physical- but to actually by these ETF's, to invest in futures all those things you can still do but that's not real precious metals you don't actually own any precious metal up but as we go further along and I'm talking next one or two years maybe a little longer it'll be very hard to buy physical and actually even if the own physical it will be very difficult to keep it because the governments who purport to own you which are most Western governments actually almost every government on earth will start to confiscate- it's not a crazy idea, this has happened in 1933 in the US.
VC: Now moving over to Bitcoin- Bitcoin has continued to gain popularity and momentum --what do you think of the popularity it’s been gaining and are you still involved in any way?
JB: I'm definitely involved in terms that I love it… It started in 2009, I heard about it in 2011 and it was about three dollars at that point and I started doing some Bitcoin businesses last year or this year sorry I don't
remember exactly but it was around $35 dollars actually when Cyprus happened and it went to two hundred fifty dollars and then it had a draw a major drawback and went down to about fifty dollars per Bitcoin - it's currently as we speak about $210. I believe if Bitcoin continues to have an uptake with the population and continues to be used as a currency it could go to - and I don’t mean to talk about crazy numbers here – but we're talking millions dollars a per Bitcoin.
VC: Wow, that’s quite an increase.
JB: It’s supply and demand and people are starting to realize these paper currencies with just pictures of criminals painted on them and like on the other side there's this pyramid with an all-seeing eye. People are starting to realize they’ve been fooleld. We’ve been fooled since 1913 with the Federal Reserve and we really got fooled – I don't mean we but- the people in general- in 1971. And more and more people, especially younger people who are not seeing any of the good sides of government or central banking – seeing all the negative sides - they're born into two hundred fifty thousand dollars’ worth of debt in the US. You want to go to school -which is pointless, it's mostly useless- costs you a hundred thousand dollars. The younger people are starting to realize – there is starting to be an awakening that all this stuff is BS and a lot of people are gravitating towards Bitcoin- especially in places like Argentina where they have capital controls like real capital controls right now- we're going to see it in the US - we're seeing in the US- even in Germany right now, Berlin there's so many places that accept Bitcoin as currency and the central banks are very scared of this but they can't stop it.
VC: So you're seeing banks cracking down on Bitcoin more and more?
JB: It's really interesting because all over the world every single government every single central bank is doing different things. In Thailand they're trying to crack down. In the US are defintely cracking down- they've actually subpoenaed, a few months ago, anyone to do with Bitcoin to go to New York to talk in front of Congress - which thankfully I did not get subpoenaed- I wouldn't go it they did but thankfully they didn’t. Canada flip-flopped -they at first closed many bank accounts of anyone to do with Bitcoin and now they're kind of saying okay, Bitcoin’s OK. Europe -every country’s different- France is kind of Open to it, you know these governments are all crazy so they change their minds all the time but who cares because they can’t actually stop Bitcoin.
VC: How do you see Bitcoin versus gold and silver?
JB: That's an interesting question -you always ask interesting questions. I think they're both important. The biggest problem with gold and silver is it’s physical. So there was a person who was traveling from Italy to I believe Switzerland recently and he had over a million dollars’ worth of gold in his car and he got stopped by the Mafia -the
the gangs- the cops- the government- and they stole all his gold they said wait -where'd you get it? Because of that it's dangerous because we have a world full of very dangerous gangs right now. The only difference between government and mafia is size and so we have a world full of mafias giant mafias. The one thing great about Bitcoin is they can't stop it - they can't even find out where it is so they took over Silk Road recently they found the person who is running Silk Road.
VC: Not sure everyone is familiar with Silk Road.
JB: Okay so Silk Road was a like the e-bay of a black market - and black market just means free market but they found him - the FBI during the shutdown and he had eighty million dollars worth of Bitcoin - they didn't know his password for the Bitcoin - so they can't get to it- so this is very interesting you can protect some with your wealth putting it into Bitcoin. It's speculative- its new it's different but a the actual designer of Bitcoin designed it almost exactly the way gold was. So to create a Bitcoin you actually have to mine it. You mine it with computers it's incredibly interesting for people who are interested in gold and silver they should really look into Bitcoin as a second option.
VC: And what's the downside risk with Bitcoin?
JB: Well just like with anything like you could say with gold the downside is the government will take it all
Right. With Bitcoins the downside is they turn of the Internet because without the internet you can’t have Bitcoin. The other downside is that the government could come after its so hard that they would a make people stop using it because the less people use it less, the less the value is going to be and that's why the value is rising because it is being used more and more – and is risk everywhere, I call this period of time right now the most dangerous time in human history for capital. It's very dangerous and you have to be very safe.
VC: Just as we wrap up Jeff one of the questions I really want to get to is you with the US shut down- and that was a major economic threat but it didn't really seem to affect gold and silver the way that a lot of people expected - why do you think that is?
JB: Well I actually wrote about that and I think you’re wrong, sorry. I actually think less government there is so the government shutdown I believe about 20 percent so you actually saw the stock market rise and gold and silver fell a bit. And many gold bugs were very confused about that. No - the less government there is the better it is for the economy and the better the economy is the worse it is for gold. Gold is sort of a counterweight to the economy and prosperity and the monetary system so if the government shutdown 100 percent that be very bad for gold.
VC: So you weren’t surprised at all to see how it reacted?
JB: No I was not surprised at all.
VC: Well Jeff, it was a pleasure as ever to chat with you, thank you so much for stopping by.
JB: Oh, it’s always my pleasure.
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