Coming up we’ll hear a sensational interview with Dr. Chris Martenson of The Crash Course and PeakProsperity.com. Chris gives a stern warning to those who are becoming complacent and don’t seize on the opportunity to become more self-reliant and self-sufficient during this calm before the storm… and what appears to be an inevitable economic reset. Don’t miss my conversation with Chris Martenson, coming up after this week’s market update.
Listen to the Podcast Audio:
Q&A with Chris Martenson
Mike Gleason: It is my privilege now to welcome in Dr. Chris of PeakProsperity.com, and author of the book Prosper! How to Prepare for the Future and Create a World Worth Inheriting. Chris is a commentator on a range of important topics such as global politicals, financial markets, governmental policy, precious metals and the importance of preparedness among other things. And it’s always great to have him with us.
Chris, welcome back and thanks so much for joining us again.
Chris Martenson: Thank you. It’s a real pleasure to be with you today, Mike, and all of your listeners.
Mike Gleason: Well, since this is actually the first time we’ve had you on in 2017, Chris, to get started here I’d like to have you set the stage for us because many of us continued to be confused and bewildered by the resilience of these markets. So, first off, give us your thoughts on the first 130 days or so of Trump’s presidency, and then how is it that the U.S. equities market continues to soar to new heights despite what appears to be massive overvaluation? Basically, assess for us what’s going on in the political and financial markets here during the first half of the year as we start off.
Chris Martenson: All right. Well, I love how you set that up, because they’re actually coincident in my mind. The first four months of 2017, we saw something that has never been seen in world history, and that was central banks across the globe creating a trillion dollars of new hot money. So, if you want to know anything I think about the markets, we have to start with 250 billion thin air hot money base currency units being created and tossed into the financial systems. That really is a large explanation factor. And of course, there was this idea that Trump was coming in and that this could put some sort of a fresh air, a theme here, but let’s be clear.
Trump was a surprise victory there, and at about 2:30 in the morning (on election night) with the Dow down 800 points, it rallied and got back to green by open, and no question in my mind, but that was official action, the Plunge Protection Team or somebody like that, and so I think that’s the world we’re in now, really. That’s my setup. The macro setup is the authorities are dumping huge amounts of money into markets to get them to go higher. They’re also making sure that markets can’t go down at any point. They do what they can. My view is they’ll do that until they can’t, and then it will break and it’d be very surprising for a lot of people.
Mike Gleason: Expanding the point here, Chris, lately we have been addressing the exhaustion that some bullion investors are feeling. They have spent the past decade watching as the growth in government data accelerated, something you’ve been following and documenting for years, all the way back to your amazing Crash Course presentation, which really opened my eyes when I first consumed that amazing material. The Fed and other central banks have abandoned all restraint, zero interest rates, monetizing treasury bonds, and mortgage securities, and other exotic programs. The federal government has been running massive deficits for even longer, for half a century at least, but none of this, to this point anyway, has seemed to matter.
The U.S. dollar appears to be holding up, the bond vigilantes have never shown up, stock prices are making all-time highs and no one on Wall Street seems to be interested in buying safe haven assets. Now, the upcoming webinar that you’re going to be doing here very soon, and we’ll get into those details later in the podcast, is titled, “The End of Money” and you will be making the case that these fundamentals do in fact matter. Talk for a minute about what you see developing and why you think safe haven investors just need to stay the course despite what appears to be a punishing environment.
Chris Martenson: Well, I’d love to. You have to have a macro view at a time like this. There’s no other way to explain, when you’re in the middle of the largest money printing experiment, and I use that word carefully, in all of human history. To try and think that what guided us in the past is going to be useful during the most extraordinary money printing of all time is, I think, misguided. What do we do with that? Well, I think we have to understand how much is being printed, what that actually means, what it really tells us about what the Fed is thinking, how scared they are. Listen, you’ve got your chips on one side of the table than the other.
Either they know exactly what they’re doing and they’ve got this all under control, or they really don’t. If you have all your chips on the “they’ve got this covered” side, I think it’s a bad debt at this stage. So that’s why we’re having this webinar, is to talk with people who have pretty good insights into who the Fed is, how they were founded, how they were organized, what they’re thinking currently, and really that means we’re in that speculative mode still. Because were trying to figure out, Mike, what’s the Fed going to do? It’s not very fundamental, but we do know that fundamentally, when we back up even further, there always has to be a balance between the money you create and the stuff you buy with it. In this story, the money we create is both currency and it’s debt.
They both operate like money, like if I take out a student loan for $50,000 and spend that money, that $50,000 that went out because of credit expansion. When we look at this story, the world has had the fastest period of credit expansion in the last eight years or so that it’s ever had. It has this extraordinary base money creation, largest in all of history by far. It’s driven up financial assets like stocks and bonds to ridiculous heights. Quite mysteriously, left commodities pretty much completely off of that particular run since 2011 and QE3. So, when we put all of that in one spot, all I see is that the claims no real wealth are increasing, and that’s both the debt and the currency.
With both of these increasing as fast as they are, I know there has to be a correction at some point, and things have gotten really extreme lately, all across the