ROBERT WILLIAMS: Hi there. I’m Robert Williams, Publisher at Agora Financial.

I’d like to thank you for joining me for this exclusive event with two of the world’s most renowned financial experts Peter Schiff and Jim Rickards.

Even if you think you don’t know Peter’s work, odds are that you do. Peter’s brilliantly timed 2006 trade against the housing market inspired the book – and the academy award-nominated movie – The Big Short.

And like Peter, Jim Rickards also has an eerily accurate track record of forecasting events. Jim’s the man the U.S. Government itself turns to when they want to know what’s about to happen in the financial markets. Although you probably don’t know this, Jim worked with multiple branches of the U.S. Intelligence network to build a system called Project Prophesy, which accurately forecast terrorist activity using financial data.

Now, for the first time ever in public, we are teaming up with these two financial superstars to issue their most serious warning.

The warning concerns a Category-5 hurricane ready to make landfall.

As you’re about to discover, the United Stated federal government will soon be forced into default.

In fact, Peter says in his latest best seller, The Real Crash, that Armageddon is inevitable.

And Jim writes in his book that the system almost collapsed in 1998. It almost collapsed again in 2008.

Now, says Jim, it’s three strikes and you’re out.

The next collapse—the Big Drop—is coming.

That’s why we’ve all joined forces to deliver an important warning to Americans for 2016.

Much of today’s content has never been released to the American public before now, including financial proof that the federal government is already completely insolvent.

Last resort manipulations by the Federal Reserve, actions just taken, have now moved the day of reckoning even closer. The likelihood of a system-wide failure over the next 12 months is very real.

Now, I want to be absolutely clear on something right from the top.

Nothing can prevent the crisis at hand from occurring. Every emergency fiscal measure has already been exhausted, and policymakers at the highest levels of government have begun preparing themselves – and their families – for financial Armageddon.

Many of them, in fact, are following the strategies Peter and Jim outline in their books.

There’s still time for Americans to prepare, too, which is why I’m calling on the two men who’ve made it their missions to throw Main Street America a lifeline yet again.

Now, a word of caution before we peel back the layers of the coming crisis.

“Be ready to feel outraged, troubled, and – frankly – scared.”

Imagine a world where the banks have frozen your assets, and the government can’t provide basic services, like police and fire rescue.

Well, you can still avoid becoming collateral damage.

I’ve prepared a limited number of American Armageddon packages.

Inside the package you’ll find two things you cannot buy anywhere else, at any price…

First, this package contains copies of Peter Schiff’s latest bestselling book, The Real Crash, fully updated for 2016.

Next, the package includes an updated copy of Jim Rickards’ The Big Drop, with a hidden “unauthorized chapter.”

You’ll also find some surprise bonuses we’ll talk about later.

And I’m offering this complete package – for free – until my supply runs out.

In a few minutes I'll show you how to secure your free package while there’s still a few left.

Let’s kick this off with Peter, and then will get to Jim’s warnings in just a moment…

Peter, you sent a letter to investors dated August 22, 2006.

In it, you describe in detail the housing bubble on the verge of bursting. You even gave investors a blueprint for profiting from such a crisis.

Now, it wasn’t to short the homebuilders. You said the greatest opportunities would lie in the downward spiral of the financial sector.

Needless to say, you were eerily prophetic. But did you understand just how right you’d be?

PETER SCHIFF: Not only did I understand how right I was going to be, but I actually expected something much worse to happen as a consequence.

And I still expect that, because what happened in 2008 wasn’t the end of the crisis. It was just the beginning.

But in looking back at the prior bubble in the stock market… At the time, I recognized the difference between the stock market bubble and the real estate bubble.

In the stock market bubble, people were speculating with their own money. In the real estate bubble, they were speculating with somebody else’s money. It was the bank’s. It was the lender’s.

So my blueprint for profit was to short the mortgages themselves. Wall Street had created these packaged products of mortgages – particularly the subprime mortgages – which were bundled in a way to create the illusion that these mortgages were ultimately high credit quality.

In fact, many of these subprime mortgages were rated AAA. But of course, some of them were rated much lower than that. It was the lower tranches that we were recommending shorting.

And that was the first letter in a series of three that I sent out trying to get people interested in the hedge fund that we were establishing – specifically to short subprime mortgages.

Now, trying to find investors for my hedge fund, I accepted an invitation from the Western Regional Mortgage Bankers Association, which was a group of 3,000 mortgage bankers.

I went there in later 2006 to talk about the coming collapse in the mortgage market and the housing bubble – and to try to find investors for my hedge fund.

You can see the entire one-hour presentation on YouTube. But what you can't see on YouTube is the workshop that I gave subsequent to that speech, which was specifically on the hedge fund that we’d created to short subprime mortgages.

And of the people who attended my workshop – maybe there were 50 to 60 of the 3,000 people that came – only one investor invested in that hedge fund.

“A book was written about these types of trades. And, in fact, more recently it turned into a movie, The Big Short.”

But imagine 3,000 people having the opportunity in the mortgage industry to short subprime mortgages – a year before they collapsed. And only one individual with the foresight to take advantage of it.

My warnings were specific. I didn’t just say, “Oh, we’re going to have a crisis.” I went into every specific detail of what the problem was and what was going to happen.

I have yet to see anybody write an explanation of the 2008 financial crisis – in hindsight – that is better and more accurate than what I wrote before it happened.

ROBERT WILLIAMS: Peter, how did you see this crisis coming a full year, perhaps a little bit more than that, before the President, Wall Street, Congress? How did you see that crisis coming when no one else could see it?

PETER SCHIFF: Well, I saw it a lot earlier than 2006.

You can go back to the internet and look at the extensive writings from 2004 and 2005 in which I described – in every detail – the housing bubble. How it was being inflated and what the source of the problem was.

I blamed mainly the Federal Reserve. I blamed Alan Greenspan and their low interest rates. But I went into all the problems in the appraisal industry, in the securitization industry. I went into the problems with Fannie Mae and Freddie Mac.

In fact, one of the predictions I made back then – and I repeated that in my original book, Crash Proof – was that both Fannie and Freddie would, in fact, go bankrupt.

That’s exactly what happened.

What I wrote about was that after the housing bubble burst, and we have this financial crisis, instead of learning from its mistakes and recognizing its role in creating the crisis, the government would double down on those mistakes.

That we would have the easiest monetary policy ever.

That the government would try to reflate the housing market and the stock market, which I also wrote would go down with the housing market.

I didn’t know what they were going to call it. They ended up calling it “quantitative easing.” I just knew that they were going to do it, and I knew that the result of that would be dramatic.

That the crash I was writing about in that book was not the 2008 crash. That was the precursor to the crash.

“The real crash is the one that’s
still coming.”

It’s the one that is the consequence of all of the policies that the government has pursued ever since the 2008 Financial Crisis.

ROBERT WILLIAMS: That gets us to your latest book, Peter, The Real Crash, in which you’re warning investors that the real crash has still yet to come.

 

2008 was just the tremor before the earthquake. In fact, you say that Armageddon is inevitable.

The next government shutdown won’t be theoretical. It’ll be real.

Home values will plummet. Jobs will disappear. Credit will dry up. The dollar will crash. And the government cannot be depended upon to provide basic services like police and fire rescue.

PETER SCHIFF: To me it feels like 2007, early 2008, all over again.

I’m screaming as loud as I can about this looming economic hurricane that’s just off the coast, and nobody can see it coming. And nobody wants to give me any credit even though I was right before.

Plus, the average American is ill-prepared for everything. That is the consequence of all this bad monetary policy and the moral hazards of the United States government.

Americans are not prepared at all for the events that are about to unfold.

If you go back and you look at the footage of the Great Depression, you see how civil Americans were. How orderly people waited in soup lines and bread lines.

That’s not America today. We have an America of people who feel entitled and are dependent.

When they first introduced welfare in the Great Depression, they called it relief.

People were embarrassed to take it. They didn’t even want to admit it. Some people actually paid the money back. They felt so guilty about having gotten money that they didn’t earn.

We don’t have that type of ethic, those types of rugged individuals, in America today.

“We’ve got a society that thinks that they’re owed a living.”

When this collapse comes, they’re going to be blaming somebody.

It’s going to be dangerous, especially in some of our cities. You see how they react to minor problems. You see how they celebrate when a team wins the Super Bowl or the World Series. You get rioting and looting.

Imagine what would happen if there was a genuine economic crisis.

Imagine what’s going to happen in our cities if the dollar collapses, and then we have shortages of goods – because the government imposes price controls.

Or what if there’s rolling blackouts because the government is rationing power. Because that’s what the government might do.

We had gas lines in the 1970s because the government didn’t allow the market to function – and they put in price controls. Well, do you think we’re any smarter now? No. We’re dumber! So we’re going to repeat those mistakes.

So imagine what’s going to happen in this country when there are shortages of basic goods, shortages of food, shortages of energy.

ROBERT WILLIAMS: Okay, let’s turn to Jim Rickards for a moment.

Jim’s one of the world’s most sought after financial experts.

So while Jim couldn’t be here in person, he has agreed to the next best thing.

He’s join us from an undisclosed location over video conferencing.

Give it to me straight, Jim.

You’re the man the U.S. government turns to predict and avoid financial threats.

You’ve been one of the rare Americans to gaze inside the books of financial intuitions that many think are rock solid, including the balance sheet of the Federal Reserve itself.

When you factor in the nation’s entitlement programs, you and I both know that the national debt actually exceeds $100 trillion.

So Jim, tell me: Is America already insolvent?

JIM RICKARDS:

We're not technically insolvent. Insolvent means your liabilities exceed your assets. U.S. has a lot of liabilities, the 100 trillion that you mentioned, but we have a lot of assets too. The problem is, we can't sell the assets. The United States owns Yellowstone Park. Are we going to auction Yellowstone Park to the highest bidder to pay our bills? Obviously, we're not going to do that. But we do have a problem. We're facing a debt crisis and a currency crisis. Even if we're not technically insolvent, that doesn't mean we can't have a crisis of confidence in the debt and the currency.

Here's the thing with debt. The key is sustainability. It doesn't mean you have to be debt free. People say America can't pay off it's 20 trillion dollars in debt. You don't actually have to pay it off, but what you do have to do is roll it over. You have to maintain the confidence in the market. That's called debt sustainability. By the way, the guy who figured this out 230 years ago was Alexander Hamilton. After the Revolutionary War, the Congress, in typical U.S. style, said, we're not going to pay those war debts. Hamilton said, wait a second, pay the war debts, make yourself a very strong credit, then you can borrow more and then pay off more debt. That's been growing ever since. Alexander Hamilton invented the government bond market. He was the first person to realize that if you a good credit, you could always pay your debts by borrowing more, paying off the old debts with the new money.

The problem is, it has to be sustainable. It has to be the case that the debt is not too high in relation to the gross domestic product, or the GDP. 30 percent, 40 percent debt to GDP, that's a sustainable level. The market will give you a vote of confidence, but that's not where we are. We're at 100 percent debt to GDP. That's if you just count the debt, the 20 trillion dollars of Treasury bonds notes and issues that are out there. But if you count the contingent liabilities, Medicare, Medicaid, veteran's benefits, student loan guarantees, federal home loan bank system, federal deposit insurance, on and on and on. Add that up, and this is more like 1,000 to 1, not 100 to 1. The US is basically heading for Greece. We're heading for bankruptcy. We're heading for a crisis of confidence.

The key is to get this, somehow, back to sustainability, but guess what? It's too late. We can't do it. It's out of control. Right now, there are only two solutions. One is default. The other one is inflation, but inflation is just another kind of default. Let's take the simple default. This would be a deflationary scenario, where prices are actually going down, very much like the Great Depression. When prices go down, the real value of the debt goes up. The same amount of nominal debt, say 20 trillion that we mentioned, actually becomes more like 30 or 40 trillion because the value of each dollar is going up in deflation. That's when we would actually default on the debt, meaning not pay it. We would look like Argentina in 2000. We would look like Greece in 2015. That's not likely to happen, because the United States can always print the money. Why would you default on debt, denominated in money that you can print? The answer is, you wouldn't.

That points to the other direction, which is inflation. If you actually just said mild inflation, say 3 percent inflation for 25 years, that cuts the value of the dollar in half. That's the way out. But the problem is that the central banks want inflation, but they can't get it. I call this Mick Jagger-nomics, in honor of Mick Jagger. Mick Jagger and The Rolling Stones had a song; “You Can't Always Get What You Want”. That's the problem in central banking today. The central banks want inflation, but they can't get it. As they say, you can't always get what you want.

What are they going to do? It makes monetary policy easy to forecast. They're going to keep printing money. Right now, we're done with QE 3, quantitative easing version 3, but look for QE 4 in the not too distant future. Look for more currency wars. Look for a cheapening dollar. Look for, what they call forward guidance; that's just promising not to raise rates for a really, really long time. All these things are out there. They're all in the central bank toolkit, not to mention negative interest rates, zero interest rate policy, and all the rest. But it looks like none of it's working, so what's the end game? What happens when the debt keeps going up and up and up, and growth doesn't keep up? If you have enough growth, you can pay your debts, but if the debt's going up 3, 4 percent a year, and you're growing at 1, 2 percent a year, which we have been, or even worse, what if we have a recession, and that debt just keeps growing, what do you do then?

This is when the crisis of confidence hits. People are just going to wake up, and they're going to decide that they don't want dollars. By the way, this happened several times before, most recently in 1977. Not too many Americans know that 1977, the United States Treasury had to borrow in Swiss francs. That's right. These were the famous Carter bonds, named after President Jimmy Carter. The US Treasury, nobody, wanted dollars. They could issue debt, but it had to be denominated in Swiss francs. That's how low confidence was in the US dollar. We could quickly get to that point again. By the way, not just the dollar. We're talking about the euro, the yen. We're not going to have a weak dollar and all these other currencies are showing strength. They're all going to be weakening, relative to important things, like gold.

What's the solution then? What happens when you have this global liquidity crisis, and there's a complete loss of confidence in the dollar? The answer is, the International Monetary Fund is going to ride to the rescue with world money. They don't call it world money. I call it world money because that's what it is. The technical name is special drawing rights or SDRs. This is money the IMF can print. It's pretty easy to understand. The US central bank, the Federal Reserve, they have a printing press. They can print dollars. The Bank of Japan can print Japanese yen. The IMF has a printing press. They can print these SDRs.

Flood the zone with 10 trillion SDRs that'll get the job done. That'll reliquify the system, and the dollar will be toast, because with 10 trillion SDRs floating around, they'll get the inflation one way or the other. You'll still have dollars. I'm not saying the dollar's going away, but it'll be like a Mexican peso. If you go to Mexico, you get some pesos, and they're usually worth less by the time you come home. That'll be the dollar. It'll be local currency, walking around money, but it'll be grossly inflated, relative to where it is today. The SDRs will be the real world money.

This crisis is coming now. But the problem is, when the crisis hits, it'll be too late. Every one of these things I just mentioned is happening. It will get worse. But when it hits, you're going to turn around and say, how do I get SDRs? They're going to be hard to get because that's government money, that's not walking around money. Give me some gold. You might find that the Mint is back-ordered. You can't get your hands on gold. You're trying to get dollars out of the bank. You're finding the ATMs are locked down. The banks are locked down. I'll sell my stocks. Exchanges are closed. All this has happened before, by the way. None of this is invented. This has all happened many times before. The time to prepare is now. When the crisis hits, it'll be too late.

THE DEATH OF A
NATIONAL TREASURE

ROBERT WILLIAMS: The United States recently passed a very troubling milestone. The national debt now exceeds the value of the entire U.S. economy.

Any homeowner underwater on their mortgage knows what happens when you owe more than the value of your home, and none of the outcomes are good.

America has to borrow every month just to pay the $86-billion interest on its debt. More than 14% of all government revenue is now being sucked up by interest payments.

To keep up the government’s illusion of solvency, policymakers are quietly refinancing the debt to the tune of billions of dollars every week.

Imagine extending the mortgage on your house to 80 years.

Well, the Treasury’s secret rollover mission has extended the length of America’s debt to levels never witnessed before in history. Something I believe is unconstitutional.

Their behavior is shockingly similar to how the banks twisted and contorted subprime mortgages ahead of the collapse of the housing market.

 

Now, the first casualty in all of this will likely surprise you.

It’s something near and dear to Americans. In fact, most of us regard it as our greatest national treasure.

Warning: What Peter and Jim reveal next might be difficult to read, but just try to keep this in mind. The devastating events to follow will also trigger the greatest legal transfer of wealth ever witnessed.

Peter, Jim and I want to make sure you’re on the right side of history when it happens.

So, Peter… is it fair to say that the recovery we’ve been hearing about is artificial? It’s not real?

PETER SCHIFF: Right. It’s not a recovery at all. We haven’t recovered from anything. We’ve just gotten sicker.

This is the biggest bubble the Federal Reserve has ever inflated. The consequences for the average American when it bursts are going to dwarf anything that was experienced in the two prior bubbles.

Everybody knows in their hearts that the country is in a lot worse shape than the leaders are pretending.

The Federal Reserve wants to pretend that everything is great. That their policies have solved the problems. But the economy is in worse shape than ever.

There’s never been a recovery where at the end of the recovery people are worse off than at the beginning. But that is the truth for most Americans.

So far during the recovery, their net-worths have gone down, their real incomes have gone down, their debts have gone up. They’re in worse shape financially than they were when the recovery began.

So what kind of recovery is that, where you get sicker?

“The extent of this recession is going to be much more obvious when the lifelines run out.”

Right now people have a reprieve in the form of cheap gas. That’s not going to last.

And they’re still able to borrow money. Credit is still flowing. The government is still making it possible – for Americans who don’t have the income to survive – to borrow to make up the difference so that they can still pay their bills. But their net-worths are negative.

I think soon, in this coming crisis, that borrowing ability is going to go away. Americans are going to be left with their incomes, which are going to continue to diminish, and a cost of living that’s going to continue to rise.

And that’s going to impoverish a large segment of our society.

ROBERT WILLIAMS: So Peter, you’re saying that the Federal Reserve predictably will fire up its printing presses again. And when that happens, it'll be the kiss of death for the dollar. America's national treasure – dead?

PETER SCHIFF: Absolutely. You see, what the government is going to conclude incorrectly, they’re going to say that their policy worked.

It just wasn’t big enough.

That quantitative easing was the right medicine. They just didn’t have a large enough dose.

That’s what Paul Krugman has always been saying. That we just needed more stimulus. The problem was we didn’t take on enough new debt. The government didn’t spend enough money.

So I think we’re going to go all-in on stimulus and quantitative easing. We’re going to load the boat.

“The government is going to prepare what I believe will be a lethal dose
of stimulus.”

We’re going to overdose on it.

What’s going to be the fatality will be the dollar and the whole government bubble, which is reflected in the value of the dollar, the value of our bond market.

All of that is going to come collapsing down, and the confidence that people had in the institution of the Federal Reserve is going to be gone – finally.

People are going to see it for what it is and see the dollar for what it is, and I think we’re going to lose our status as the issuer of the world’s reserve currency.

And I think that’s going to be a profound change in the American standard of living.

ROBERT WILLIAMS: Jim, we turn to you again.

You’re the world’s foremost Currency analyst.

In fact, you literally wrote a best-selling book called Currency Wars.

And as the financial threat advisor that participated in the pentagon’s financial warfare scenario…

Tell our readers why the dollar’s loss as the world’s reserve currency is so devastating.

JIM RICKARDS:

Think of the dollar today as the only anchor we have. We used to have a gold standard. I think our viewers understand that. The dollar was actually backed by gold from 1900 to 1971. The Federal Reserve, our central bank, wasn't even created until 1913. Before that, in 1900, Congress passed an act, saying that the dollar was defined as a weight of gold. At the time, 1 ounce of gold was equal to 20 dollars and 67 cents. Let's just say 20 dollars, for a round number. An ounce of gold was about 20 dollars. The Fed was created in 1913, and we were still on the gold standard at the time. We had a gold standard and a discretionary monetary policy side by side.

Until 1968, from 1913 to 1968, the law said that the money supply could not be more than 2 and a half times the amount of gold, depending on what the price of gold was. Gold was 20 dollars an ounce, approximately, from 1913 to 1933. In 1933, it was revalued to 35 dollars an ounce. People say, gold went up from 20 dollars an ounce to 35 dollars an ounce. That's not how I think about it. Gold is gold. I think of the dollar going down 75 percent. That is what happened. The dollar was devalued 75 percent against gold, meaning it took more dollars to get an ounce of gold. The dollar was worth less.

The 35-dollar price was maintained from 1933 to 1971. Of course, the gold standard was over in 1971. But in 1968, the Congress passed an act. Prior to that, the money supply, as I mentioned, could not be more than 2 and a half times the amount of gold. That was repealed in 1968, which meant you were still on a gold standard, but there was no limit on the amount of money the Fed could print. That was done around the time of the Vietnam War and Lyndon Johnson's Great Society. We were spending money on war and domestic programs, all at the same time. The world looked at the US. Clearly, we were on a non-sustainable path, but politicians went ahead anyway.

Since 1971, we've had no anchor at all. '71 to 1979 was an experimental period. You had floating rates. That was a Milton Friedman idea. Milton Friedman was a great economic historian, a great libertarian, great writer, great philosopher, but a really lousy economist. He left us with a couple of pretty bad ideas. One of them was floating exchange rates. It's one of these things that works in theory, but not in the real world. The reason is currency wars. Milton Friedman didn't think we'd have currency wars, but of course, we do. That was an experimental period. But the problem is, it got out of control. There was no anchor. We had borderline hyperinflation.

How many Americans remember that from 1977 to 1981, we had 55 percent inflation. Not 15, 55. Meaning that the value of the dollar was cut by more than half, just in a five-year period. A lot of people say the dollar's lost 93 percent it's purchasing power since 1913. That's technically true, but you can lose 90 percent, and then 90 percent of what's left, 90 percent of what's left, et cetera, on and on. You can have a lot of 90 percent collapses, but here was a five-year period. We lost over half just in 5 years. You don't have to go back 100 years. There was currency chaos.

That ended in 1980. Two individuals stopped the chaos, stopped the hyperinflation. Paul Volker and Ronald Reagan. Paul Volker said, I'm going to kill the inflation and restore confidence in the dollar, whatever it takes. What it took was 20 percent interest rates. He took interest rates to 20 percent. He killed inflation. Killed the economy, too. We had a really bad recession. At the time, the worst recession since the Great Depression. We've had a worse one since, of course, beginning in 2008, but at the time, that was the worst recession since the Great Depression. But it worked. It got inflation out of the system. Between 1980 and 1983, inflation fell from 15 percent to 3 percent. That was an incredible drop. Ronald Reagan lowered taxes, reduced regulation, got the economy moving again.

In 3 years, from 1983 to 1986, the US economy grew over 16 percent, in real terms. Do you know how incredible that is? Today, in the past 12 months, growth has only been about 1 percent. Since 2009, we've been averaging about 2 percent a year. But here was a three-year period where it was averaging over 5 percent a year, 16 percent, as I said, in 3 years. This was the age of king dollar. In fact, in January 1985, the US dollar hit an all-time high, based on certain indices. From 1980 to 2010, through Democratic and Republican administrations, James Baker, under President Reagan and President Bush, and Robert Rubin, under President Clinton, in the '80s and '90s, we had pretty good growth. This was the age of king dollar.

It was stable until 2010, when President Obama, in January 2010 in the State of the Union Address, announced a new currency war. He didn't say currency war. He called it the National Export Initiative. He said, we're going to double exports in 5 years, but the only way to do that was to trash the currency, and that's what we did. I told you earlier, 1985 was the all-time high for the dollar. August 2011 was the all-time low. We trashed the dollar just to get a few exports out there. That's the system we're still in. The problem is, it's starting to wobble.

I've recently spoken to Ben Bernanke, the former chairman of the Federal Reserve, and another fellow named John Lipsky. John's an economist, great guy, the only American ever to head the IMF. The International Monetary Fund, people, were surprised to hear me say that. They go, wait a second. There was a deal after World War II, an American could head the World Bank, but there was always going to be a European, or some non-American, to head the IMF. How does an American get to be head of the IMF? The answer is, we had a surprise resignation from our friend Dominique Strauss-Kahn, who was hauled off in an Air France jet at JFK, put under rest. He was the head of the IMF. He had to resign unexpectedly. They weren't ready with a replacement. Lipsky was the number 2 guy, which the American is, the Deputy Managing Director. He got promoted to active Managing Director. I spoke to him, also.

I spoke to Bernanke; I spoke to Lipsky, 9,000 miles apart. One conversation in Korea, one conversation in New York, three months apart. They both used exactly the same words to describe our system. They said the system is incoherent. I know they didn't rehearse it for my benefit. They're just telling me that that word is in the air. Again, the fellow who ran the Fed and the guy who ran the IMF, both using the same word, incoherent. There's no anchor. We don't have a system. This is getting wobbly. It's like a children's top when you spin it, it spins nicely for awhile, but what happens when it runs out of steam? It starts to get wobbly, and then it hits on its side and it goes flying. That's the point we're approaching, that point of chaos. We need systemic reform, or we're going to get systemic collapse. It's going to be one or the other. We're getting closer to that point of collapse.

ROBERT WILLIAMS: Peter, as you’ve mentioned already, this is where it really gets scary. You say the dollar would collapse wiping out all savings and sending consumer prices into the stratosphere.

I think you even said that Walmart would seem like Nieman-Marcus.

PETER SCHIFF: Absolutely. Ironically, so far the dollar has been the primary beneficiary of the government policy.

We’ve had this rally in the dollar because so many people around the world actually believe that our problems have been solved – and that the economy is in good shape and the fed is going to be able to raise interest rates.

But I think this is the biggest sucker rally that the dollar’s ever had.

Just as the dollar is about to be destroyed, literally, people have piled into it. It’s the most crowded speculative trade on Wall Street – buying into the dollar. But once people recognize the gravity of that mistake, I think it’s going to be a very sharp and quick ride down for the dollar. And that is going to be a game changer.

ROBERT WILLIAMS: Again, Jim.

Most people don’t know this, but in the late 1990s you were the lead attorney for a hedge fund called Long Term Capital Management.

When the fund blew up you personally organized a bailout that saved the entire financial system from collapse.

They profiled your work in a best-selling book by Roger Lowenstein.

You’ve seen just how dangerous a single bank or fund failing can be to the fragile world economy.

So let me ask you this…

Can expect more bank failures in the coming crash?

JIM RICKARDS:

We can absolutely expect it. Unfortunately, it's very sad to say. Let me give you the basis for that. I don't like to make claims without backing it up with some analysis and facts. Anyone can make a claim and say, the world's coming to an end or we're going to have a collapse. That's easy. The hard part is, can you do the analysis and back it up and make a persuasive case that this is exactly what's going to happen? I think we can. Let's just look at the recent sequence of collapses. I'll start in 1998.

What happened in 1998? You had the Russian financial crisis, you had the hedge fund, Long-Term Capital Management, and yes, I was the general counsel. I was their lawyer. I negotiated that bailout. I had a front row seat on that one. The world was just hours away from closing every stock and bond exchange in the world. People don't know that. All they know is, they woke up that morning and somehow Wall Street had written a check, and the hedge fund was bailed out, and the Fed cut interest rates the next day, and somehow things got better, and the stock market took off. What they don't know is that we were hours away from complete systemic collapse. If the money had not changed hands, and there were some close calls, everything would've been shut down.

What happened in 1998 was that Wall Street got together and bailed out a hedge fund. They really bailed out themselves, because the hedge fund owed a trillion dollars to Wall Street. They put up 4 billion of cash to save the trillion-dollar IOU that was owed to them, because if Long-Term Capital had failed, all the Wall Street banks would have failed, starting with Lehman Brothers, by the way. That's why Lehman Brothers was no surprise to me in 2008 because they almost failed in 1998. That was bailout number 1.

Bailout number 2, 2008, what happened then? It wasn't a hedge fund that was in trouble. Wall Street was in trouble. We were hours, if not days, away from the sequential collapse of every major bank in the world. That is not an exaggeration. Have a look at a great book, Too Big To Fail, by Andrew Ross Sorkin. He goes through this in a lot of detail. Bear Stearns had already failed. Fannie Mae and Freddie Mac had already failed. Lehman Brothers had already failed. Morgan Stanley was next, probably just a couple days behind Lehman. Then Goldman, then City Bank, then Bank of America. Would JP Morgan have been the last guy standing? Don't know, but maybe, maybe not. The point is, they were like dominoes. The dynamic had started. Every single one of them was going to fail. What happened?

Central banks, Federal Reserve, US Congress, got together and did the bailout. You all remember the TARP. By the way, when they voted for the TARP, they voted against it. The stock market fell 771 points in one day, from a much lower base, by the way. That was a huge collapse in one day, and the Congress said, oops, maybe that wasn't such a good idea. They came back and voted for it. The Fed printed 4 trillion dollars of money since 2008 to maintain this bailout. They did tens of trillions of dollars of swaps behind the scenes with the European Central Bank. People in Europe wanted dollars, too. Those banks had dollar liabilities. The Fed can print dollars, but the European Central Bank can't print dollars. They can only print euros. What were the European banks, Deutsche Bank, and all the rest, where were they going to get dollars?

The answer is, the European Central Bank prints up a bunch of euros, the Fed prints up a bunch of dollars, and they swap them. Now, the European Central Bank has dollars under the swap. We were getting the euros. They've got to undo that at some point. By the way, none of this was known at the time. It all came out years later when Congress insisted on hearing about this. They guaranteed every money market fund in America; they guaranteed every bank deposit in America, they printed and swapped tens of trillions of dollars. They did every single thing possible. Look at the sequence. 1998, Wall Street bails out a hedge fund. 2008, the central banks bail out Wall Street. 2018, let's maintain the ten-year tempo. It might be 2018; it might be sooner. It might be 2017, might be any minute now. When the next bailout hits, who's going to bail out the central banks? Because the central banks have not normalized their balance sheets.

I said the Fed printed all this money. They started out the last crisis at 800 billion, and they printed up to 4.2 trillion. If somehow they had gotten their balance sheet back down to 800 billion, I'd be the first one to say, nice job, guys, you did it, you bailed out the system and got back to normal. But they didn't. They never normalized their balance sheet. They're still at over 4 trillion dollars. What happens when the next crisis hits? Are they going to go to 8 trillion? 12 trillion? Legally, they can, but they're going to hit some invisible confidence boundaries. There's going to come a time when people just say, you know what, I'm out of here, get me some land, get me some gold, get me some art, silver, anything, water, natural resources, but get me out of the dollar. It'll be just like 1977 when the Treasury had to borrow in Swiss francs because nobody wanted dollars.

This is the problem. Each collapse is bigger than the one before. It's not as if we have a collapse and then we fix it, and we move on. What happens is, we paper it over, it gets bigger, we have a bigger crash, none of the problems are solved, they're just getting papered over. By the way, what'd you hear about in 2008? Too big to fail, right? All the banks, too big to fail, too big to fail. Guess what? Today, nine years later, those banks are bigger. They have a larger percentage of all the banking assets in America. They have larger derivatives books. Everything that was too big to fail in 2008 is even bigger and more dangerous today. No problems have been solved.

Everybody knows this. I say, everybody, I'm talking about the international monetary elites, the Treasury Secretary, the finance ministers, the PhDs at Harvard, the people at the IMF, the kind of people who go to Davos, the Bank for International Settlements, they all understand this. They're actually warning each other. I'm a bit of a geek. I read all these technical papers. I see them warning each other, but who's warning the everyday citizen? Who's telling you and your neighbors and your family members, savers and investors, that this is coming? We're heading towards a World Central Bank monetary crisis. The solution's going to be world money, but that's going to be the end of the dollar.

FED UNLEASHES
ECONOMIC PEARL HARBOR

ROBERT WILLIAMS: I talked with Peter and Jim at length about the coming Great Depression.

We all believe that this one, the one ready to make landfall, will be far worse than the depression of the 1930s.

That is, because in the coming crisis Americans won’t have the benefit of falling prices.

See, cheaper groceries and consumer goods provided much needed relief to people who lost their jobs in the 1930s.

But this time with a crashing dollar, instead of getting the comfort of falling prices, Americans will have to suffer the agony of rising prices.

As it stands now, despite the fiscal arson that U.S. policymakers have committed on its people, the deception of a strong dollar is holding.

The past 18 months have witnessed a rally in the dollar, but the following chart unmasks the illusion.

 

Despite Americans enjoying more purchasing power than they’ve had in almost 15 years, it’s never taken longer for a single unit of currency to move through the U.S. economy.

Americans are scared – business owners and consumers alike. And they’re holding onto their dollars.

You’re probably scared, too. I know I am.

That’s why it’s never been more important to begin trading your historically overvalued dollars for other assets that will soon enjoy dramatic valuation explosions.

“Your dollars will never buy you more than they will right now.”

And that’s why I’ve prepared a limited number of American Armageddon packages…

Inside your package you’ll see exactly which assets to buy with your inflated dollars.

I have a limited supply of these packages that I’m giving away for free to everyone who participates in today’s event.

All I ask in return is that you take action quickly.

As Peter and Jim reveal in this next section, the Federal Reserve just attacked America again. I don’t believe they did it on purpose, but history will likely view the Fed’s latest measure as an economic Pearl Harbor.

The real crash is now gaining momentum with every passing second.

Keep in mind as you’re reading that your artificially strong dollars could make you very wealthy as the crisis evolves...

Peter, now this next point is going to scare the hell out of a lot of Americans, but you consider U.S. treasuries to already be subprime assets at this point.

PETER SCHIFF: Well absolutely. One of the reasons that I understood the problem in subprime mortgages is because I knew that a lot of the people – in fact, all of the people who were taking advantage of subprime mortgages – were using adjustable rate mortgages. Meaning that the interest rates on their mortgages could rise.

In fact, most of these mortgages were started with what they used to call a teaser rate – where you had an introductory, very low rate of interest on your mortgage.

That meant a lot of people who otherwise couldn’t qualify were able to qualify because they could make the teaser payments.

But I knew that eventually those rates would reset to levels that the borrowers couldn’t afford – and then they would end up defaulting.

Well, the government has done the same thing. The United States’ national debt is like one gigantic adjustable rate mortgage to a subprime borrower who is not going to be able to pay if interest rates rise.

We’ve got this teaser rate right now thanks to the Fed. But if interest rates go up, the U.S. government is in the same position as the subprime borrower – with lots of debt that they can’t afford to pay.

ROBERT WILLIAMS: Jim, this one’s for you.

China’s treasury holdings have fallen about $200 billion as it raises money in support of its flagging economy and stock market.

This would be the first time that China has pulled back from treasuries on an annual basis. Scary, isn’t it?

JIM RICKARDS:

The oldest joke in banking is, if I owe you a million dollars, I have a problem, but if I owe you a billion dollars, you have a problem because I have an option not to pay you. I can just default on my debts, sleep in the next day, and you just took a billion dollar loss. Guess what? We owe China 2 trillion dollars. We actually don't have a problem. They have a problem because they're sitting on 2 trillion dollars of US Treasury debt. They've just slowly begun to wake up to the fact that we're not going to pay them in real terms. We might write the check, but we'll inflate the currency. That's the American way. That's how we always get out of this. We'll say to China, here's your 2 trillion dollars, good luck buying a loaf of bread because we just printed the money and your money's worthless.

The Chinese see this coming. They're not dumb. They understand it, but what can they do? They're trapped. Why don't they sell their Treasuries? They can, but it's the deepest, most liquid market in the world, but it's not that deep, and it's not that liquid. You can't dump 2 trillion dollars of Treasuries. You can do it in small ways, and that's exactly what's happening. There's a Treasury report that comes out periodically, and it lists the foreign holdings of US government securities. This is actually reported, with a slight lag. We see the Chinese- every report that comes out, their Treasury position goes down a little bit. They're getting out of Treasuries as fast as they can, but they don't want to do it any faster than that. They can't do it any faster than that because the market's not that deep.

What are they doing? They're doing two other things. This is really the end game, because when the dollar goes down, there are only two candidates for the new global reserve money. One we've talked about, special drawing rights. The other one is gold. There's not a central bank in the world that wants gold, but they may have to go to gold, just to restore confidence. Meanwhile, it really looks like the SDR is the favorite solution of the elites. What is China actually doing on those two fronts? One thing they're doing, they're buying thousands of tons of gold. They have been for the last seven years. No one knows the exact amount. We have to estimate it based on Hong Kong imports and mining output, but my best estimate is 4 to 5,000 tons. Some people think it's actually more than that.

Bear in mind; they are only 33,000 tons of official gold in the world. All the countries in the world, all the sovereign wealth funds, all the central banks, combined, have about 33,000 tons of gold. Here's China, buying 4,000 tons, just in the past few years, over 10 percent of all the official gold in the world. What they're doing, they're building up this gold supply. I talked earlier about the Treasuries were going to inflate the currency. The dollar has no greater friend than China. China wants the dollar to be strong. The US government doesn't. We want a weak dollar so we can get out from under our debt. China wants a strong dollar, but they know they're not going to win that.

They know we're going to inflate the dollar. They're sitting there with gold and treasuries, and here's the dynamic. If we honor our dollar obligations, which we won't, but if we do, the gold's not going to do much, and they'll collect their money on the Treasuries. But if we start to inflate the US dollar, which we will, the value of the Treasuries is going to go down, but what's going to happen to the value of the gold? It's going to go up. In other words, they're constructing a hedge. If it's all good, they sit like this; gold doesn't do much. But if the Treasuries go down in real terms, the gold goes up. What they lose over here, they make over here. China's protected. They're building this gold hedge. A golden Great Wall of China, if you want to think of it that way.

What's happening on the SDR front? A lot. First of all, the SDR has just been expanded to include the Chinese yuan. The SDR is the most exclusive club in the world. People join fancy clubs, maybe not that many members. Until recently there were only four components of the SDR: US dollars, pound sterling, Japanese yen, and the euro. Beginning October 1, 2016, they added a fifth currency, the Chinese yuan. You know that expression from the '60s, you're either on the bus or off the bus? The Chinese were off the bus; now they're on the bus. Now, they're part of this SDR.

But there's more to it than that. You and I can't have SDRs, at least not very easily. It's not walking around money for everyday people. This is big boy money. This is government money. Governments settle their debts to other governments. It'll be used in the future for things like the price of oil, financial statements of major corporations, et cetera. China is building up their SDR position. When the IMF prints SDRs, they hand them out like candy on Halloween, to all the members. China gets the share, but a very interesting thing- we know how many SDRs China has received from the IMF because the IMF reports that. We also know how many SDRs China has because we can just look at the People's Bank of China balance sheet. But here's the interesting thing: The amount of SDRs they report is greater than the amount that they were given. That means they're out in the market buying more. China, through stealth means, is buying more SDRs than they've been given, another way to dump dollars and get SDRs.

The Chinese are smart. They're doing this in very small steps. They don't want to cause panic, but they're getting ready for panic. They're getting ready for that day when either gold or SDRs are the way to go. They're also the prime mover in a new market for private SDRs. I said that SDRs are issued by the IMF, only given out to their members. That's true, but it's just another currency. There's nothing stopping any corporation from issuing a bond, denominated in SDRs, where the value of the bond on settlement would be in SDRs, consisting of these five currencies.

The thing is, one currency can go up, and another currency can go down. The SDR itself is pretty constant because it's got five different currencies in it. The IMF, working hand in glove with the Chinese, July 15, 2016, came out with a paper encouraging the creation of what they call the MSDR, that stands for market SDR, as opposed to the OSDR, which is the official SDR. The OSDR, that's what countries give to each other. The MSDR, this is this new private market. Guess who the biggest underwriter on the first issue of private SDR bonds by the World Bank was? China. They're issuing them in China, to Chinese investors. Chinese banks are the underwriters. China's all over this. China, they see the end of the dollar. They're doing the two things they need to do, buying gold and creating a market in SDRs and buying SDRs themselves. They're getting ready for this. You should be getting ready for it, too.

They have more SDRs than they've been given. The only way you can get them is to buy them, and there's a secret trading desk inside the IMF, did you know that? Top secret trading desk. They make a market. If China calls up, says, offer me SDRs. IMF calls Hungary; you got any SDRs? Yeah. Bid, boom, done, they go to China. It's another way for China to dump dollars. It's not actually top secret, but you have to be a geek like me to read 27 layers deep on the website. You can find this. The IMF is what I call transparently non-transparent. They actually put everything out there. They, first of all, rely on the fact that nobody's going to read it. Then they rely on the fact that those who read it won't understand it. Then they rely on the fact that those who understand it are working for them and won't talk about it. The number of people in the world who read it, understand it and are willing to talk about it, it's like four people. It's a small crowd.

ROBERT WILLIAMS: All right, Peter and Jim, it’s time.

Let’s give our readers an idea of what the real crash will look like when it hits.

Peter, we’ll start with you…

PETER SCHIFF: Twice in the last 15 years the U.S. stock market’s been cut in half.

Certainly in the absence of massive money printing, a huge round of quantitative easing, it’s going to happen again.

The Fed may try to avert another Black Thursday (1929) by printing enough money. In such a scenario, the dollar would crash instead of the market.

I do believe that the Federal Reserve may intervene in time to prevent the stock market from collapsing, but only at the expense of the dollar – and then ultimately the bond market.

See, the fed can’t save everything.

If the fed is going to save the market and try to save the real estate market as well, then they have to sacrifice the dollar.

But of course if the dollar collapses, then it might not matter that your stock portfolio didn’t go down. Because if the stock market stays the same and the dollar goes down, well you’ve still lost because your stocks are priced in dollars.

So the market would have to go up dramatically in order to keep you whole.

I don’t think there’s any way they’re going to get the market to rise enough to offset the loss of the value of the dollar in which your stocks are priced.

ROBERT WILLIAMS: So it’s almost like it’s a hidden crash. It’s not overtly apparent, but it’s still happening.

PETER SCHIFF: Yes. I think you’ll be able to see the crash better if you measure it in something that’s more objective. Something that the Federal Reserve can’t create and that would be gold.

Remember, the important thing is not what the stocks are worth in terms of the dollar – because the dollar’s a moving target.

You don’t know what the dollar’s going to be worth.

“The dollar isn’t any real wealth. It represents a claim on wealth.”

So the question is, “What could you buy with your dollars?”

A better way to value stocks is to price them in gold because gold is real money. Gold has real properties, and there is a long history of the stock market priced in something as stable as gold.

If you go back historically – when the market gets to about 20 to 1 – that’s a very expensive stock market.

In 1929, the Dow Jones was about 20 ounces of gold. But when it bottomed out in 1932, the Dow was down to one ounce of gold.

That was a huge collapse.

Now, the stock market didn’t get back up to 20 ounces of gold again until 1966. Then it went back to one ounce in 1980. So it made the round trip.

In 1980, the stock market was the same price in an ounce of gold as it was in 1932.

In 2000, during the height of the stock market bubble, the Dow was worth 40 ounces of gold. Unprecedented.

During the ensuing bear market that really ended around 2008-2009, I think the Dow Jones got down to around eight ounces of gold – maybe a little less.

But right now it’s recovered. That ratio is around 16 to 1.

Now I don’t think it’s going to make it to 20 to 1 again. I do think we’re going to take out that low of around 8 to 1 or 7 to 1, wherever we were back then. And I think we’re going to revisit the 1 to 1 ratio again that we saw during the depth of the Great Depression in 1932 and at the end of the 1970s bear market in 1980.

Remember, the stag-flationary period of the 1970s brought the Dow back down to one ounce of gold.

So I think we’re going there again. I think the Dow Jones is going to trade for one ounce of gold.

I just don’t know what the price is going to be. Is it going to be with the Dow at $5,000 and gold at $5,000? Is it going to with the Dow at $10,000 and gold at $10,000? Or could it be Dow $20,000 and gold $20,000?

See, the important thing is not where they meet, but that they do meet.

ROBERT WILLIAMS: Thanks, Peter.

Jim, what’s the crash look like through your eyes?

JIM RICKARDS:

You can make the analysis of financial panic and financial crashes and collapse pretty complicated, but there's actually a very simple way to think about it. The best description of a financial panic I've ever heard is, everybody wants his money back. Simple as that. Everybody wants their money back. This has to do with the definition of money. A lot of people think they have money, but they find out the hard way, they don't. Money is what you carry in your pocket. Pull a twenty-dollar bill or a ten- dollar bill out of your wallet. That's money. Or hold a gold coin, I think that's money, too. When you put your money in the bank, it's not money anymore. People think it's money. The government wants you to think it's money. The economists actually have a name for this. It's called money illusion, but it's not money.

When you put your money in a bank deposit, that's an unsecured liability of an occasionally insolvent financial institution. Look at the balance sheet of a bank. Where are the bank deposits? They're on the liability side. They're not assets; they're bank liabilities. Maybe they'll pay you back, maybe they won't. What if they shut the banks, which they did in 1933 in the United States, two years ago in Greece, a few years ago in Cyprus? These things actually happen a lot more frequently than people realize. You run into people that go, I've got money in stocks, money in bonds, money in real estate. No, you don't. You have stocks, bonds, and real estate, but you don't have money. If you want money, you have to sell those things, and that's the problem. In a panic, everybody wants their money back. Everyone's dumping everything at once. What happens when everyone sells everything at once? The price goes down. Your money is disappearing before your eyes. By the time you get it sold, you've lost half of your so-called money, and then by the time you get money, half of it's gone.

This is the problem. People dump assets to get cash. They think they have money, but they really don't have money. The next panic is going to be so severe that regulators will not be able to keep the markets open. I mentioned earlier, 1998, Wall Street bailed out a hedge fund, 2008, central banks bailed out Wall Street. In the next panic, maybe 2018, maybe sooner, they're not going to be able to print the money again. You'll get SDRs at the end game, but when the panic initially hits, they're not going to bail it out. The G20, the group of 20 major economic powers in the world, already agreed on this in Brisbane, Australia in 2014. They came up with the bail-in plan.

The bail-in plan says, instead of printing money to get depositors their money back, they're going to say to depositors, sorry, we're closing the banks. We're going to reprogram the ATMs, you can only get 300 dollars a day for gas and groceries, tell me why you need more than 300 dollars a day. And by the way, your 200,000 dollar deposit? 100,000 of that's going to be money that'll be a deposit. The other 100,000 is going to be converted into equity of a bad bank. Here are your stock certificates. See you in 10 years. They're going to close the stock exchange. Think that can't happen? Guess again. The New York Stock Exchange was closed for five months from July to December in 1914, so it has happened. I know it was a while ago, but that could happen again. That's what they do in extremist. Money market funds are going to suspend redemption. You know, you talk to people about money market funds, they go, "Oh, I can call my broker, put an order in, sell some shares, the money will be in my bank account the next day." What if your broker's closed? What if the power grid's down? What if the banks are closed? What if the money market fund suspends redemptions? That means they decide not to pay you your money.

By the way, the law just changed. The SCC just issued a new regulation. For the first time since the money market funds were created in 1977, they are allowed to suspend redemptions. Probably in your monthly account statement there was a little flyer, you know, you open it up, throw it in the trash. I know I do. If you'd read the fine print, you would find there was a notice saying, when you want your money, you can't get it, so all this is already happening. The laws are already in place. The notices have already been given. The whole system is set up to basically lock down, shut down, freeze, and make it so that you can't get your money back. You know, prices might not fall because there won't be any prices. That's one of the reasons they shut down the Stock Exchange, by the way, so there's no price discovery, so you won't even know how much money you lost, but I guarantee it will be a fortune.

By the way, when the regulators come out, they'll say this is temporary. They'll use the word temporary. You know who said temporary? August 15, 1971, Richard Nixon when he suspended redemptions in gold. You can find it on YouTube, easy to find. He said, "I'm temporarily suspending redemptions in gold." That was forty-five years ago, and there's still no gold standard, so that's what regulators mean by temporary, they mean we'll never lift the freeze.

Until there's a new Bretton Woods type of arrangements, maybe an SDR, maybe gold, maybe a gold-backed SDR, there'll be something, I'm not saying it's the end of the world, we're all going to live in caves. What I am saying is that they're going to reset, reform, the global monetary system, and if you're on the wrong side of that trade, relying on dollars, your wealth could be wiped out.

PREPARE FOR A ROLLER COASTER RIDE THROUGH HELL

ROBERT WILLIAMS: Your free American Armageddon package contains two items you cannot buy anywhere else in the world, at any price.

First is Peter’s The Real Crash. The newest edition is in a custom gold jacket, and it’s only available through our company, Agora Financial. I’m even covering shipping and handling costs.

Next is a completely updated version of Jim Rickards’ The Big Drop, with the exclusive “unauthorized chapter.”

But due to the aggressive nature of this crisis – and since taking immediate action is so vital to your financial survival – we’re about to discuss a few steps you can take immediately ahead of the package arriving in your mailbox.

Only a precious few will survive the crisis and still be whole.

Even fewer will parachute out of the crisis richer and happier as a result.

America’s power base and policymakers are already protecting themselves and their families.

Many of them are following similar strategies to those Peter and Jim outline in their books – like Warren Buffett and Donald Trump .

“Ask yourself, are you truly prepared for what’s coming?”

Because what’s coming will be far more serious than a financial crisis.

If you think that only those with invested assets will get hurt, the real crash will impact you even worse.

What will you do without Social Security or a pension check?

What will you do when there’s no food on the shelves or police to protect you, and your local bank was burned to the ground?

How about when a desperate government seizes your financial assets?

There isn’t an American alive outside of the armed forces who can possibly be prepared to live through such a doomsday scenario.

Tell us, Peter… with a bankrupt government, what happens to entitlement programs like Social Security, Medicare, Medicaid, food stamps, unemployment benefits, Fannie and Freddie?

Gone?

PETER SCHIFF: Well, those benefits, those entitlements, are the reason the country is bankrupt.

First of all, nobody is entitled to anything.

You’re not entitled to somebody else’s money. You’re entitled to what you earn yourself, but you’re not entitled to what somebody else earns.

Of course the government maintains the illusion that some of these entitlement programs are actually funded – the Society Security “trust fund.”

But there is no trust fund. There’s nothing there.

Every dime that the government has ever collected in Social Security taxes has already been spent. They spent it going to the moon, fighting the war on poverty, fighting the Vietnam War, fighting the war on terror.

That money is gone.

Yes, the government has replaced it with an IOU to itself, but that’s not real. You can’t write yourself a check and then count your uncashed check as an asset.

If I buy a government bond, that’s an asset to me because it’s a liability to the government. But the government can’t own its own bond and claim it as an asset, because it’s also an offsetting liability.

So the trust funds have never been there.

The entitlement programs are run based on the same principles as a Ponzi scheme. That’s all it is.

You’re not entitled to the proceeds of a Ponzi scheme.

As long as the government can keep up the charade, it’s going to pretend that these are solvent programs. But eventually they are going to implode.

And ultimately, again, I think that in order to avoid the political embarrassment of having to admit that there’s no money – and that we can’t afford to make the payments – they’re just going to run the printing presses.

Meanwhile, a lot of people now – record numbers of people – are taking disability early from Social Security.

So the whole thing is broke.

In fact, right now the government is already paying out more in Social Security benefits than it collects in taxes. And that’s during this so-called recovery.

What’s going to happen in the next recession?

If you think this was a bad recovery and, of course, this was the weakest recovery ever – wait till you get a load of the next recession.

“If the recovery’s this bad, wait till you see what’s in store.”

So this whole thing is going to implode.

The government is trying to keep it going by pretending there’s no inflation. Cost-of-Living Adjustments (COLAs) didn’t go up at all. So last year people on Social Security – I think for the first time – didn’t get an increase in their benefits for inflation. Because the government claims there is none.

Well, that lie can only go on for so long.

But what they’re really doing by pretending there’s no inflation is cutting Social Security benefits. But they’re going to have to cut them a lot more.

In fact, they’re basically going to eliminate them completely – either honestly by not paying or means testing the program… or dishonestly by just printing so much money as to render the benefits worthless.

ROBERT WILLIAMS: Jim, would a desperate U.S. government attempting to service its debt seize personal assets of Americans?

Would it go into their bank accounts? Would it go into their 401(k)s?

We know desperate people do desperate things. Is this something American’s have to be worried about?

JIM RICKARDS:

Americans should absolutely be concerned about that, and for that matter, these things are not only going to happen in the future, but some of them have already happened. People don't realize it. First of all, as far as closing the banks are concerned, this is the official policy of the G20. As I mentioned earlier, look at the Brisbane communique from 2014, they said, "We're going to bail in depositors." That means you're not going to be able to get your money back, so that's the first thing that's out there.

401(k)'s have already been forced to buy treasuries. Now, people say, "Wait a second; I have a 401(k). Nobody forced me to do anything." Really? Check your account statement, read the fine print. Here's what happened. A lot of people had money market funds in their 401(k)'s. There used to be two kinds of money market funds: prime funds and government funds. The prime funds, you could buy high-grade commercial paper, maybe from a good company, like IBM, maybe some bank commercial paper, etc., that was in the fund, and then a Treasury fund would have treasury bills and short-term notes, and other kinds of liquid assets. These were the two kinds of money market funds.

The prime funds paid a slightly higher yield, and a lot of people went into them for that reason, because they wanted a little bit of yield, and they were both pretty liquid, but as I mentioned earlier, the SCC just changed the rules. They said that money market funds can now suspend redemptions. They can say, "You can't have your money back. We're locking it down," but that only applies to prime funds, it does not apply to government funds, so the 401k trustees, the administrators, you know, these are regulated by the government, because they have tax preferences, there're certain laws that require a certain fiduciary acts on the part of the people who administer them. The people who are administering them said, "Wait a second, we promised our investors, our 401k beneficiaries, that they could get the money. These prime funds might suspend redemptions, the government funds won't," so they mandatorily, involuntarily converted your prime fund into a Treasury fund.

Now, I'm sure they sent you a notice, and maybe you had to fill it in and send it back if somehow you wanted to stay in the prime fund, but nobody did that. They just kind of shrugged and said, fine, go ahead. A money market fund's a money market fund, but money market funds all over America, probably yours, have already been involuntarily converted from prime to government securities. That makes you a forced buyer of US Treasuries. I'm not saying that's a horrible thing. At least right now, absent a panic, you can get your money, but in a panic, you might not be able to, but my point is, this is already happening.

Another example. The banks are being forced buyers of US Treasuries. Now, right now, the big buyer of US Treasuries is the Federal Reserve. That's how they print money. They print money and buy government securities, or they call a dealer and offer to buy the government securities, and the dealer sells it to them and delivers the security, and the Fed pays for it with money that comes out of thin air. That's literally how the Fed creates money, so the Fed's the big buyer. They bought $4 trillion out of the $20 trillion of US Treasury debt, about $4 trillion is owned by the Federal Reserve. The rest of it, a lot of it's owned by foreign banks, China, Japan, Taiwan, others we've mentioned, but we also said they're starting to dump them. Who's going to buy them?

Well, the answer is the banks. In the 1950s the bank balance sheet was about 50% US Treasury securities. Today that amount's down around 10%, even a little bit less, so there's a lot of headroom between 10 and 50, so the government's looking at the banks saying, "We're going to make you buy those Treasuries, so you're going to be a forced buyer." You know, after the bailouts in 2008 a lot of banks couldn't believe their good luck, they said, "Hey, we were broke. Wait a second, the government bailed us out, we're still standing, we still have our phony-baloney jobs, we can still pay ourselves $20 million bonuses. Isn't life wonderful?" Well, it is except for one thing. From now on they're working for the government. The government can shut down any of these banks whenever they want, and when the government says you have to buy Treasuries, believe me, they're going to buy Treasuries, so the government's making the banks buy them. They're making you buy them in your 401(k)'s, even though you may not realize it because of this change in money market funds.

This is the point, as confidence is being lost, the government is getting more and more involved, forcing people to buy treasuries. There's another thing going on called the war on cash. Government is making it impossible for you to get cash. A lot of people say, "I got my money in the bank. I can get cash any time I want." Really? Don't be so sure. You go down to the bank if you ask for $3,000 or more; they're going to file a report with the Treasury called a Suspicious Activity Report, SAR. If you ask for $10,000 or more, they're going to file a report to the treasure called the Currency Transaction Report, the CTR. You know where those reports go? They go to the Financial Crimes Enforcement Network, a top-secret government agency, and they're going to be putting a file right next to Al Qaeda, drug lords, drug smugglers, tax evaders, you're going to be treated like a criminal. You're a perfectly honest citizen, you just say, "Hey, I want some cash because I'm worried about negative interest rates."

What's a negative interest rate? Negative interest rate is you put $100,000 in the bank, you come back a year later, and you only have $99,000. That's a 1% negative interest rate. Instead of paying you interest, they take the money out of your account. That's a negative interest rate. The problem is they can't have negative interest rates if people have cash because they'll just go down to the bank, take the $100,000 in cash, bury in their backyard, so a year later the person who had his money in the bank only has $99,000 and the person who has cash in the backyard, she has $100,000, so that's what people will do, so if you want negative interest rates you have to eliminate cash, you have to take away that backyard option, and that's what they're doing, treating you like a criminal.

I've seen cases where people went in to get cash out of the banks. They said, "Come back in a few days. We don't have that much on hand." You know, you'll see the tellers face turn white. They'll call the manager over, check you out. I mean, you really get the hairy eyeball, you really get treated like a criminal, even though you're perfectly honest citizens. People ask me how's the war on cash going? I tell them, the war on cash is over. The government won. You can't get your money, but what's coming next.

See, once people realize this is true, which it is, they're going to say, "Well, I'll get some gold." You know, the gold's very different. The government has spent so many decades convincing people that gold's not money; they forgot it's money themselves, so they don't regulate gold the way they regulate cash, but believe me, it's just a matter of time. Once the government figures that out, and they see people, "Oh gee, the people aren't getting cash; they're getting gold," there's going to be a war on gold. They're going to impose all these reporting requirements, all these limitations, all these restrictions, any money laundering, know our customer, the whole nine yards is going to apply to gold, so I see a war on gold coming.

My advice to investors is to get gold while you still can. You know, what's going on here? If you're going to slaughter cows or slaughter pigs, what you do is you round them up into a pen before you slaughter them, so they're all in one place. This is what's happening to savers. You're being rounded up into a digital slaughterhouse. You can't get cash; they're going to make it hard to get gold; you can't have walking around money. They're going to get you in these banks, there's only going to be five banks, we know who they are, Citi, B of A, J.P. Morgan, Wells Fargo, a couple of others, we know who these banks are. Ask yourself, am I in one of those banks? Changes are you are, so they're going to get all this money in digital form, in these banks, and then the slaughter comes, negative interest rates are going to take your money away, and then when the crisis comes, you're not going to be able to get it, they're going to lock it down. Get out of the digital payment system, get some gold, while there's still time.

ROBERT WILLIAMS: Jim, your early 2016 book called The New Case For Gold was a smash success, hitting best-seller status.

So what would you say to the people considering buying gold right now?

JIM RICKARDS:

The main advice I would give is you should have physical gold, not what I call paper gold. Paper gold is a euphemism for no gold. There are all these gold products out there; there are gold exchange traded funds, so-called ETFs. There are gold futures traded on the Comex that's the big futures exchange; you can call one of the London Bullion Market Association dealers and get a gold forward contract. The problem with all these is that these are paper contracts. Yeah, you'll have some short term price exposure, but when the gold-buying panic kicks in, when gold's going up hundred, two hundred dollars per ounce, per day, and you're like, "Man I'm really glad I got some gold." What you'll find out, is that those contracts have been terminated at the close of business the day before.

You're not going to get the protection you bargained for. It's exactly like having fire insurance on your house; heaven forbid the house catches on fire, only to find out that the insurance was canceled the day before. That's what's going to happen, and by the way, this is in the contracts. Who reads these contracts? I happen to be a lawyer, in addition to being an economist, and a little bit of a geek, I read the contracts. I've actually read the rule books of all the major futures exchanges. Right now where the futures with gold futures, you can trade it like a paper contract, or whatever, but you can also put a notice and take physical gold. Go down to the warehouse and pick it up, that's perfectly okay, but they've sold a hundred dollars worth of contracts for every dollar of physical gold. What do you think is going to happen when a hundred people show up for a bar of gold, and there's only one bar of gold?

The first guy might get it, but the other ninety-nine people, they're out of luck. What they're going to do, they're not going to let that happen; that's the default. They're going to actually say that we're closing; you can not get your physical gold. You can only trade for what they call Liquidation Only, can roll over your paper contract, but no one's going to want to do that. The point is, you're not going to be able to get your gold when you want it. By the way, this is going to happen, exactly when you want your gold the most, because there's going to be a price spike, a super spike, that's going to cause all these defaults, all these termination notices. There's a high correlation between when you most want your gold, and when you're not going to have it if you have one of these paper contracts.

You'll be sitting there on TV, watching the price go up, and you won't have any gold because they'll pay you yesterday's price, but that's not why you bought the contract. You don't want yesterday's price; you want today's price, and tomorrow's price. You want that price protection, that wealth protection, that you bargained for, and it's going to be gone. The only way to participate fully is to have physical gold. If you have that, then you're good to go, as the price of gold goes up, you own it, you're going to ride that wave upward. I recommend, private, non-bank storage. Do not put your gold in a bank, as if the government does want to confiscate it, or even if they just want to know what you got, that's the first place they're going to look. Even if they don't care about the gold, they might shut down the banks, and you'll be banging on the door, and not be able to get to your safety deposit box, not be able to get your gold.

You want to keep it in non-bank storage, perhaps a home safe. Again, the best security, by the way, doesn't tell anyone you have it. That's really important, or where it is, there are ways to deal with this. Have physical gold, don't put it in the bank. There are perfectly good, non-bank storage firms. The best known, I don't endorse any name in particular, but the best known are Brinks, and Loomis, and Dunbar. There are a few others out there, but there are good local vaults as well. Just ask around, get some references, make sure they have insurance. Make it close to home, don't rely on flying to Switzerland to get it, you might not be able to get there, but there are ways to store it. Get physical gold, keep it in non-bank storage, and keep it safe.

ROBERT WILLIAMS: All of us assume that the government will always be able to provide basic services.

Without further borrowing power, what about police, fire rescue, postal service? Does it all grind to a halt?

PETER SCHIFF: Yeah. Remember, the government doesn’t actually have any wealth.

It only has what it takes from the productive members of society, but the productive members of society have been shrinking because American politicians have made all sorts of promises they can’t keep.

They’ve made promises to bond holders, but they’ve also made promises to government employees with respect to pensions – or just every American with respect to Social Security and Medicare. But then money isn’t there.

Think about this. If the governments are broke, that’s including the local governments – they can’t get the tax revenue.

So if they can’t pay the police department, are they going to be on duty?

If the governments don’t have the resources to pay the police, are they going to be there to protect you? They’re going to be protecting their own families.

Why are they going to be on the job when there’s nothing in it for them?

That’s why it’s very important for people to be prepared.

“Don’t rely on the government to protect you.”

Rely on yourselves because those government policemen may be too preoccupied protecting their own families to work for free protecting somebody else’s.

ROBERT WILLIAMS: As you both know, Agora Financial has our headquarters in Baltimore, Maryland.

We all know what happened in Baltimore. I lived through those riots. They were scary. I could smell the smoke in the air.

There was just panic on the streets. I never thought I’d see an America like that, but I definitely did that day.

Do you see more of this happening in some of our major cities?

PETER SCHIFF: Absolutely and, of course, on a much larger scale.

Those were localized problems. Those weren’t economic problems. Those were more political.

But imagine if you get something that really hits home – where the goods that people take for granted are just not available. Where people can’t get the food that they need – or electricity or gasoline. If goods are really in short supply, it really could get into a situation where everybody is going to have to rely on their own ability to protect themselves, which is one of the reasons that people should be prepared now.

You should have weapons to protect yourself.

One of the reasons that gun control would be so dangerous is so many people will be left defenseless. People need to be able to defend themselves.

That’s why I’ve recommended for a long time – not only people keep guns, but they keep enough ammunition. I think ammunition is going to be in very short supply. You might have a gun, but if you don’t have any bullets, it doesn’t do you any good.

So I’ve recommended for a long time that you stockpile bullets.

Worst case scenario – you can barter them. You can trade them to somebody. They’re going to have value, but they might have a lot of value if you actually need to use them.

Plus when you buy a gun, you hope you never use it, unless you’re a hunter. But you never want to use your gun in self-defense. That’s the last thing you want to do.

But I tell you, the worst thing is not having a gun that you don’t need. It’s needing a gun and not having one. You don’t want to be in that situation.

ROBERT WILLIAMS : Jim, what about you? Should people prepare for urban survival right now?

Jim RICKARDS:

I disagree a little bit with Peter here. I'm not expecting the end of the world, a lot of people put words in your mouth. They go, "Jim Rickards says it's going to be the end of the world." No, I don't think we'll all be living in caves with guns, and eating canned goods. That's not what I expect at all, but things are going to change. There'll be a monetary reset; your dollars will not be worth what you think they are. Society may change, it doesn't have to be the end of the world, but it could be the end of life as we know it. Society may be simpler, more agrarian, more like the 19th century. We just go back a hundred and fifty, years to the mid-19th century.

It wasn't that long ago, probably your grandmother or your great grandparents were around then. Maybe you even knew them when you were a little kid, growing up. They didn't have electricity, they didn't have cars, they didn't have the internet, they didn't have planes. They didn't have any of this, but life was fine. They had families, and they had a community, and they worked, and there were things to do, maybe life will get a little bit simpler.

Of course, we talked a lot about gold, but silver is a good asset to have. I consider having silver for emergencies, like a flashlight and batteries. I live along the coast, and we get hurricanes occasionally, and the lights go out, the power grid goes down. I have a flashlight and batteries handy.

A little silver serves the same purpose. If you go out, if you have to get groceries in a world where the power grid is down, and the ATMs don't work, and the banks don't work, and even the automated scanners at the supermarkets don't work, but you're trying to pay for groceries ... You may find that a gold coin is actually too much. It might be a year's worth of groceries, and you picture people shaving a little bit of gold off and trying to barter it. A simpler solution is to have some silver. One ounce of silver that might be a couple of days worth of groceries. That might be exactly the right quantity of precious metals to have. In addition to gold, for preserving most of your wealth, have some silvers.

I recommend American silver eagles, one-ounce coin, from the US Mint. By the way, don't buy numismatics. Don't buy rare coins; they're not worth it. Just get the new issues from the US Mint. We'll have a different monetary system; I don't think it's the end of the world. Your old money, meaning the dollar, may be near worthless, but it's time to get some new money, which is gold and silver.

LESS THAN 1% OF AMERICANS WILL SURVIVE THE CRASH

ROBERT WILLIAMS: Again, it’s never been more important to strategically trade your overvalued dollars for other assets ready to explode in value.

It’s unlikely that your dollars will ever be worth more than they’re worth this very moment.

Think of the coming crash like a mouse trap.

999 out of 1,000 Americans believing what the President, the Federal Reserve and Congress are telling them will voluntarily walk straight into the trap and never come out. But one out of every 1,000 will be clever enough to eat the cheese and walk away feeling satisfied.

In the subprime mortgage meltdown every American homeowner got hurt as the real estate market endured a devastating revaluation.

Still, a handful of people got richer as a result. Peter’s first book, Crash Proof, proved prophetic and offered investors very specific instructions to grab the cheese without springing the trap.

His latest book, The Real Crash, hits even harder.

Of course it has to hit harder...

“The dollar’s revaluation has the potential to do more damage than a terrorist attack a thousand times bigger than 9/11.”

In this next section, Peter, Jim and I reveal a few protection measures you can take right now ahead of your free package arriving in the mail.

Now, Peter… you say even if you don’t think of yourself as an investor, you need to start paying more attention to your wealth.

We’re in unconventional times. The Fed will be printing so much money that your dollars could become worthless.

In fact, you say when the dollar crashes, Walmart will seem like Nieman-Marcus.

Is there still time for Americans to prepare for the coming crisis?

PETER SCHIFF: Absolutely. In fact, because so many people are confused about what’s going on, so many people have embraced the dollar and have confidence in what the Federal Reserve has created.

You have a situation where real money, gold and silver, are extremely undervalued.

So while prices are going to be going up for people who have dollars, prices will be collapsing for people who have real money. So there’s still an opportunity for people to accumulate legitimate savings.

To get real money while it’s cheap and hold onto it until it’s valuable.

Because once people realize that this is a bubble and the dollar starts to implode, people are going to be scrambling to convert those claims to wealth – to actual wealth.

ROBERT WILLIAMS: Let’s talk about the stock market.

Jim, should people still be in stocks? And if so, which ones?

JIM RICKARDS:

There's a way to be in stocks. My gold allocation, I recommend ten percent gold, I think that's the right amount. Some people try to say, "Jim Rickards said to sell everything and buy gold." I've never said that I have said make a ten percent allocation of your investible assets in gold, but that still leaves ninety percent. I lecture a lot, and I get this question frequently. They say, "Well Jim, thanks for the ten percent gold recommendation. What do I do with the other ninety percent?" That's where my model portfolio comes in; we'll talk about that in a couple of minutes, but as far as stocks are concerned, sure in that ninety percent, along with other things, and we'll get to those.

There's room for stocks, but you got to be very selective. Stocks are going to go down thirty or forty percent. That has happened many times.

The NASTEC went down eighty percent in 2000 after the dot-com boom. The Dow Jones went down twenty-two percent in one day, one day, October 19, 1987. In today's Dow points, that would be the equivalent of four thousand Dow points. If the Dow went down four hundred points, that's all you would read or hear about that evening and the next morning. Imagine going down four thousand points. In percentage equivalence, that's exactly what happened not that long ago, 1987. These things do happen, they happen over and over, the same thing happened in 2008. The thing is, if you're all in stocks and they go down thirty, forty, fifty percent, what if you're close to retirement? What if you have to pay for your children's education? Your parent's healthcare? Your own healthcare, etc.? That's why stocks are too risky, for more than a percentage of your portfolio.

That's why you don't want to follow the herd, but for a slice, with careful selection, as I said on a selective basis. I like things in the energy, natural resource sector; I like gold mining stocks, selectively, water. There're some things that are out there; that are definitely worth considering.

Yes, the key is real diversification, not what I call faux-diversification. Faux-diversification is when you think you're diversified, but you're not. I meet people who say, "I'm diversified, I own fifty different stocks." No, you're not diversified; you have one asset class. You may have fifty companies, but you have one asset class, it's called stocks, and when the stock market goes does thirty percent, you go down thirty percent. Those fifty different stocks aren't going to save you.

Diversification is when you have different asset classes, gold, cash, silver, fine art, etc., but there's a slice for stocks here. My short answer is yes, it's fine to have stocks. Don't go all on the stocks, get some real diversification with the rest of your portfolio, but above all, be selective.

ROBERT WILLIAMS: Jim, in your book, The Big Drop, you lay bare a five-part plan for what Americans should be doing with money.

And this is important…

This is the same plan you’re doing with your own money.

Could you share some of that with us today?

JIM RICKARDS:

Sure, I'd be glad to. I have what I call a model portfolio or permanent portfolio. Here's the thing, you never just set it up and set it and forget it, put a stake in the ground. I change things up around the edges all the time, but here's my basic portfolio. We've already talked about ten percent gold, and I would consider silver in that. Ten percent precious metals, gold, and silver, mostly gold, but some silver. Particularly silver eagles for emergencies, I also recommend fine art. I recommend cash; I have a big slug of cash, about thirty percent. People go, "Wait for a second Jim; you're the guy talking about the death of the dollar. Why would you have cash?" The answer is I might not have it forever, but I like it, for now, a couple of reasons: number one, cash is a good deflation hedge. We've been talking a lot about inflation, and gold's a good inflation hedge, but deflation's out there.

Deflation could take hold, and cash is a good deflation hedge. The value of cash actually goes up in deflation. Prices go down, and the dollar buys you more, that's a good asset in deflation. The other thing cash does, people, it's a little bit technical, but it reduces the overall volatility of your portfolio. Most people understand that leverage increases volatility, if you borrow money, to buy an asset, the asset goes up, you're going to make even more. If the asset goes down, you're going to lose even more. Now, as leverage increases the volatility of any asset, cash is the opposite. It decreases the volatility, because it has no volatility since cash is cash. If you have volatile assets over here, like gold and precious metals, and volatile assets over here like stocks and private equity, a little slug of cash in the middle, and I recommend thirty percent, reduces the overall volatility.

The other thing it does, and this is hard for people to understand, they say cash has no yield, that's true. At least not much of one, but cash has valuable embedded optionality. Optionality means the ability to pivot, and do an asset class when you get better information. If you go all into private equity, or even some of the things I recommend, like gold or fine art, and you decided that was a mistake, or all of a sudden deflation is taking over from inflation, and you want to pivot out, it can be costly, it can be time-consuming. First of all, some of those assets might be locked down, depending on what they are. You might have bid-offer spreads to cross, you might have commissions. You might find that if you are in a hedge fund, they suspend redemptions, etc. Whereas if you have cash, you're always the person who can pivot, and do an attractive asset class. Even if the crash comes, you can go shopping after the crash; you can be the person scooping up all of the bad assets, or a good asset at fire sale prices.

By the way, the king of this is Warren Buffet. Warren Buffet today has thirty billion dollars in cash. It's the most cash that Berkshire Hathaway, his holding company, has ever had. You can look it up; you can look at the Berkshire Hathaway balance sheet. Warren Buffet knows what's coming; he won't talk about it the way I will. Why would he? He'd lose ten billion dollars if he talked about stuff like this, but he knows it's coming. He's the king of this, in 1991, he went out and scooped up Solomon Brothers, a big investment bank. In 2008, he went out and scooped up Goldman Sachs, another big investment bank. Warren Buffet waits for things to burn down, then he takes his cash and buys them at fire sale prices, you can do the same.

There's a lot of benefits for cash. There's a place, I recommend, high-quality bonds, ten-year Treasury notes, it's one of the best performing asset classes. People say there's a bond bubble because interest rates are low. Interest rates are not low, nominal rates are low, but real rates are still high. Real rates are the nominal rate, minus inflation. If you do that, you'll find that actually real rates are still pretty high. That means nominal rates have to fall lower to stimulate the economy. Could be looking at one of the greatest bond markets rallies in history. I like alternative investments, private equity, venture capital, fin-tech, that's short for financial technology companies. I have an investment in a water company, there a number of things of that type that I have. My model portfolio would be gold and silver, fine art, cash. I like land and real estate, private equity, venture capital, hedge funds, and yes, there's room for stocks and bonds, just don't overweight those.

ROBERT WILLIAMS: Let’s talk a little more about gold, Jim.

With gold prices on the rise, we’re starting to see signs of life in the junior mining section again.

Do these companies play a role in a portfolio?

JIM RICKARDS:

I talked earlier about the role of gold and the role of equities. Gold mining stock is just gold and equities together, but you really need to know what you're doing. Here's the thing about gold miners: it's really a leveraged form of gold. If gold goes up, you make a certain amount of money. If gold goes up, a mining stock should go up even more. The reason for that has to do with some accounting rules, but basically, gold mining companies have fixed costs. Once they cover their fixed costs, every dollar increase in the price of gold drops pretty much straight to the bottom line. The stock market applies a multiple to stock. If you make an extra dollar, they'll probably say your stock is worth ten dollars more, because there's a ten times multiple, depending on the market.

A gold mining stock is a leverage bet on gold. It's a two-way street, by the way. If gold goes up, mining stocks go up a lot, if gold goes down, mining stocks go down a lot. You need to be aware of the risks, but we're in a market now where we're in a gold bold market. I expect it to continue for a long time; gold mining stocks will do extremely well, but as I said, you need to know what you're doing because they're not all created equal. Mining companies have certain things in common. They obviously have a mine; they have what's called a feasibility study. They have a capital-raising plan; they have fixed assets. They need geological surveys; they need environmental approvals, etc. All that's the same, the big differentiator among mining companies is the quality of management.

Some of these companies have excellent management; you definitely want to own them. Sorry to say, some of them are frauds. There have been a lot of frauds in the gold mining sector, some of these people; they get a little field, it's not developed, they list it on the stock exchange trying to raise capital, but they got no real prospects of actually getting a mine going. How do you sort out the good from the bad? We have solutions for this.

My partner's a Harvard-trained geologist; he happened to be a lawyer as well, what could be better than that? He's got the financial legal chops, as well as the geological chops. He knows his minerals, let's put it that way. We have a promise. When we look at a gold mining stock, we actually go out and visit the mine. We go in the physical mine, could be underground, could be open pit. We rent helicopters; we rent bust pilot, planes, go out in the Yukon, and Alaska, and Ontario, and Quebec and elsewhere. We actually look at the mines; we meet with management. We read the financial statements, including the footnotes, we join management calls. We read various forms of research that are out there; we really do our homework, and then we not only tell you what to buy, we recommend when to buy. Entry points are important.

Having a thesis right, getting a good company, getting a bold market at the right time, understanding what I said about leveraging gold miners. That's really important, but it's only half the battle. The other half is the entry-point and the exit-point. When to buy, when to sell. We look at that; we tell you exactly when to buy, and we also tell you when to sell. Because if you get a big gain, that's great, but at some point, you have to take money off the table. So you can make a lot of money in gold mining stocks. You need to be careful; you need to have an expert on your side, and that's what we provide.

CLAIM YOUR AMERICAN ARMAGEDDON SURVIVAL KIT, ASAP

ROBERT WILLIAMS: I hope you found Peter and Jim’s warnings to America both urgent and useful.

Now it’s time to officially prepare. It starts by claiming your free American Armageddon Survival Kit.

The kit contains everything you need to survive the crisis, even prosper – including a copy of both Peter’s book and Jim’s book.

It’s built to turn chaos into a massive moneymaking opportunity.

Again, it starts with your personal copy of Peter’s hardbound master work, The Real Crash, fully updated for 2016.

You won’t find this special gold-jacket edition of The Real Crash at your local bookstore .

But there’s something else I’d like to include with your Survival Kit. It’s an infinitely important audio chapter that Peter and I just recorded.

The audio chapter covers the stock market’s intense volatility and how 500-point swings on the Dow could become your best friend.

The audio chapter also covers the lucrative currency markets, including the three currencies ready to thrive in a post-Armageddon world.

Next, you’ll receive a free copy of Jim Rickards’ The Big Drop.

Inside you’ll find full details on Jim’s personally  . You’ll find his five-part plan to not only hedge your wealth against the coming volatility, but to actually make it out of the coming crisis with more money than you started with.

And there’s more.

In fact, if you take immediate action, I’ll add yet another level of protection around your personal fortress.

“What I’m doing is unprecedented in the publishing industry.”

Are you ready?

Allow me to unveil two more key components to your American Armageddon Survival Kit.

The first is a survival portfolio of sorts.

It’s called “One Stock to Buy and 50 Ticking Time Bombs to Avoid”

See, there are at least 50 stocks you’ll want to be free and clear of during the next crisis.

Inside this bonus we’ll outline each of these stocks for you.

These stocks will likely lose half their value or more in short order when the crash hits.

Then we’ll show you the one stock that actually allow  you to profit as the crisis hits. We’ll give you the name, ticker symbol and complete buy recommendation – including price – on this one stock.

The second component is something called The Perfect Gold Portfolio.

See, as Jim says, gold is a chameleon. It changes in response to the environment it’s in.

In this report, Jim provides recommendations on exactly how much physical gold to own now that gold is behaving more like money than an investment. He’ll show you a simple formula for determining exactly how much gold to buy.

He’ll show you what to buy. Where to purchase. And how to pay the lowest possible commissions.

To wrap this up, your kit includes.

• A free copy of Peter’s The Real Crash…
• Your free audio chapter with Peter and me…
• A free copy of Jim’s The Big Drop…
• Your two bonuses: One Stock to Buy and 50 Ticking Timebombs, and The Perfect Gold Portfolio

Now all we need is a means of communication.

We’ll communicate all urgent news, alerts, and additional insights from Jim Rickards through ourflagship publication, Jim Rickards’ Strategic Intelligence.

Strategic Intelligence specializes in helping you prepare and profit from the coming dollar crash.

This is the only place in the world where Jim Rickards shares his ongoing warnings.

As Jim hinted at earlier, his team includes a Harvard trained geologist, an ex-managing director at Goldman Sachs, an ex-Hedge Fund manager, an ex-government insider with years spent on Capitol Hill…

The list goes on and on.

If your mission is to never get blindsided by a financial crash, then Jim Rickards’ Strategic Intelligence is your solution. 

As a subscriber, you’ll receive one special situation report every month from Jim and his team.

Fittingly, your first report is ready, and it relates to the crisis at hand. The report is called The Only Way To Own The New World Money.

Inside, Jim tells you a unique way to play a supercurrency — a special investment you can read about only in the pages of Strategic Intelligence.

It’s a kind of super-money printed by the International Monetary Fund (IMF) and then circulated among central banks and governments.

Jim explains exactly how it works, why it’s a natural replacement for the U.S. dollar, and the only way to “own” it.

You’ll get the entire American Armageddon Survival Kit – for free – by simply accepting a no-risk trial subscription to Strategic Intelligence.

Keep in mind, you cannot buy this kit anywhere else in the world at any price.

To claim your full kit now, simply click the button below.

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Don’t get caught off guard.

Don’t be left unprepared.

The time to makes these moves is now – before the crisis hits.

Click below to claim your package.

I only have a limited number of copies, so please don’t delay.

Thank you for joining us today for the urgent summit.

I’m Robert Williams, for Agora Financial, signing off.

You Can Review Your Order Before It's Final