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Friday, September 21, 2012

Greenberg Interview Sep 2012

BG: You are listening to Greenburg News with your host Brian Greenburg at WNJC 1360AM, now newly syndicated on WIFI 1460AM. We have an excellent show.  I'm going to talk to the six people who actually watched the political convention. But we can talk about it. ... There's an election in November and for those of you who are going to participate, we have some insight.  We have with us Vox Day, a libertarian political columnist and the author of The Return of the Great Depression. Known as the Internet Superintelligence, he was one of the few economics writers to correctly predict the financial crisis of 2008. Residing in Italy...anyway Vox, welcome to Greenburg News.

VD: Thank you, sir.

BG: So, where are you in Italy by the way?

VD: I'm up in the North.

BG: The more civilized part of the country, is that it?

VD: Well it all depends on how you want to look at civilization. I quite like it in the South as well. But yeah there's a little bit more structure and business and that sort of thing, in the North.

BG: So, they're next in line too to go broke, after Spain goes down?

VD: I think it's possible but there have been a lot of people that want to go back to the Lira, have wanted to go back to the Lira pretty much since the Euro got stuck on them.

BG: What happened, people wake up in the middle of the night and all of a sudden people have a different currency?

VD: Pretty much. There was a process and we were here when it happened and it was basically like having about 20 percent inflation overnight. All the businesses rounded up and so the official exchange rate really got bumped up. What you actually paid was more than the official exchange rate that was supposed to happen. As a result, tourism was really down and it became much more difficult for Italian companies to compete because they were no longer a low-cost producer.

BG: You know there's something bizarre about this. And of course people know about the Euro, but its much worse than that, it's the impact of Brussels' government, and what I mean by that is I was recently in Portugal, visiting Lisbon, and I heard that before I got there...this story...and I thought nah, they didn't commit economic suicide but in fact that's what happened to their fishing industry. They had 150,000 ships and now they have none.

VD: Yeah, the EU has been unmitigated disaster for most countries in Europe. The problem is it has been very good for the political class...

BG: For Germany.

VD: Not so much the everyday, average German. The Germans have done fine because the Germans work hard, and they're smart, and they tend to do fairly well no matter what happens. But, the real problem is that all the political class and the media and the academics have been bought off by the flow of taxpayer money from the different countries to...it all goes through the European Commission who then doles out the money to all the people who will continue to push for it. But that whole process is really broken down because it doesn't matter how many people you pay off, once things get bad enough they're not going to be convinced by the various politicians and academics and journalists who are on the payroll of the European Union somehow.

BG: But let me ask you, if you're Portuguese...country goes back to the 1,100's and you've had a history over 900 years, going on 1,000 years, of fishing...the lifeblood of the nation and some idiot in Brussels says disband because you have an unfair advantage and they do...

VD: The problem is the fisherman doesn't really have a choice, its not like the fisherman wants to do anything but Brussels is paying for a large fishing police and they are physically preventing people from doing anything. You see the same thing in England, for example, where people who have been selling fruit and oranges and that sort of thing in pounds rather than kilos for hundreds of years, they're suddenly being shut down and then they're not allowed to sell, by the British police, unless they sell in kilos the way that they are dictated to sell them.

BG: So the way that I look at this situation, depression is imminent in Europe.

VD: Oh, its already here, the depression is already here in the States.

BG: No things are happy here, didn't you hear? Its all good.

VD: (laughs)

BG: When you're out of the country sometimes things can get skewed.

VD: Yeah, the thing that people don't understand, and the thing that people don't realize, is that no one ever defined economic depressions by utilizing official GDP statistics released by the Bureau of Economic Analysis until after, well after, the Great Depression. And so to say that we don't have a depression because GDP is positive is a fundamental misunderstanding of what a depression is. And so the fact that the government statisticians can find a way of claiming that we still have economic growth when there's something like 15,000,000 American families on food stamps, and the fact that we don't have people lining up to go to soup kitchens and stuff. Instead of that we have people spending money on their government funded debit cards but the principle is the same.

BG: You know a statistic that doesn't get picked up is the amount of people who have become "long-term disabled" since the Great Recession began.

VD: Right.

BG: Nearly 4,000,000 people, I think its almost twice the amount of people who were long-term disabled in this country, you know nearly doubled in the last 3 years. Its unbelievable. And basically they are hiding the people on their, they're just warehousing them.

VD: Well, that's why I think it doesn't make much sense to look at the various unemployment statistics because all of them are gamed in various ways. In the book that you referenced, The Return of the Great Depression, I have a chapter that is called "No One Knows Anything" and one of the things that it indicates and goes through in some detail is showing how the various statistics are gamed, and how they are, by their own metrics, completely inaccurate. And so I think its much more interesting and useful, even though still misleading, but the employment population ratio is a much more meaningful indicator because that just simply looks at how many people are employed out of the total population. And you can see there, much more easily, the negative state of the economy than you can when you're just looking at the unemployment numbers because their definition of unemployed allows them to take people out of the work force then claim that they are neither employed nor unemployed.

BG: Well here's a definition, we can technically be at full employment if, in essence, we were to stop the bleeding of new people getting unemployed and just allowed the benefits to run out on the existing workforce who were collecting, or unemployed workforce. And if all these people are collecting were to go past the 99 weeks or whatever they're collecting now, we could say we're at full employment.

VD: Because the number is gamed because they don't count unemployment... unemployment does not mean you are not employed, it means you are not employed and you are not actively seeking for a job or collecting unemployment benefits. It's just absolutely ludicrous.

BG: It is bull, but besides even that how about the devastation of young people today, which I want to blame them in a minute, but just as far as the pure numbers where, what is it one in two, are in effect not employed in their...either not employed or out of work in the last three years?

VD: Far be it from me to claim that young people are anything but stupid. There's nothing that I find more annoying.  And speaking as someone who used to be young, I remember I was young and that's why I know that young people are stupid, because I was too.

BG: I think the problem is this: when I went to college my tuition was $1,000 a year, so if I screwed up I'm out of pocket $1,000. If I would have taken basket weaving and I spend $4,000 in my example and I graduated and found there's no jobs, I'm out four grand. But today the mistakes are not $4,000 they're $100,000 and they're studying majors where they don't...in other words you have to be a lot smarter or more savvy or much more savvier and that's not saying blame the students, the 18 year olds, because the parents should be there guiding them to a major where there's a prospect of employment.

VD: The problem is really multi-fold because if you look, I mean yes, young people are stupid, but on the other hand they've also been lied to, you know?

BG: Right.

VD: Even if you're studying a good solid major...I read a really remarkable statistic the other day about PhDs back in the 1950's or something pretty much if you got a PhD you were immediately employed. And nowadays the number of people who get a PhD and are able to find a position is well below 20 percent and so these are people who are playing the game the right way but they're playing the 1950's game 60 years later. And nobody realizes that.

BG: Well its, well that's again all the people have been taught is education is the key to success. It doesn't matter what youstudy, just study education. By the way, have you ever looked into people who pursued becoming a priest, the seminaries? And how many seminary graduates can't find a pulpit and walk around with thousands of dollars in debt as a result? The numbers are staggering. Its a statistic you should explore...

But let me ask you, you mentioned about depression. How do you define a depression as opposed to a recession we've had in other periods of time?

VD: The correct definition of a depression is very simple, it means a reduction in the amount of economic activity. And so there's many different ways you can look at that and simply looking at the employment population ratio is one easy way to do it. And another easy way to do it is to look at industrial output. All the Fed's beige book numbers and stuff, those have been turning negative for some time now, they've been up and down. But the most, I mean, its kind of like the famous Supreme Court decision about pornography, in the past a depression was when a people felt they were in a depression. And so if you look at the social mood, if you look at the crime statistics, if you look at the diseases and people getting sick and that sort of thing, and if you look at military conflict, those are all things that tend to coincide with depressions. If you look around at the state of the world right now, you can see the world is in a depression. In fact the world is in a bigger global depression then it was in the 1920's because what most people don't realize is that except for Germany and the USA there really was no Great Depression in France or in England, and Japan was actually in a major economic boom at the time because they had taken of Manchuria. If you look at their GNP statistics from the time they were experiencing growth of like 15 percent per year. And so now what we're seeing is Europe is in depression, Japan is in depression, China appears to have now entered it, and USA is in it. We're experiencing it, we're getting towards the end of the beginning. People are still pretending that we're not. They're still talking about the slow recovery and that sort of thing, but its all nonsense.

BG: So now that we've defined that things are not good out there and there's now talk of...they're going back to the well. They're going to do QE3.

VD: Mm hmm.

BG: The well is not really generated anything of substance, obviously, in the past, but that's central bankers know so they gotta do what they know.

VD: Well, its not just all that they know, its also what is necessary for the banks. See what people don't understand is quantitative easing is not about saving the economy, quantitative easing is about giving the banks and the large financial institutions a relatively soft landing as the economy goes into depression. So what they're attempting to do is basically continue to transfer assets from the taxpayer to the banks in order to keep them from completely failing and going under.

If you're coming at it from the world of the banker it makes perfect sense. They're trying to defend the survival of the global financial system but the problem is the whole thing is going to come down sooner or later. Does it makes sense to prop it up for a while? From some people's perspective, yes. But in terms of if you're looking at it from what is best for the economy as a whole, obviously it is best for the bankrupt institutions to go bankrupt so that what remains of their good assets can be used to rebuild.

BG: Right, and what people fail to realize is by bailing out these banks and keeping the status quo you have people making capital investment decisions based on the perception that things are not that bad and then taking on debt and otherwise investments that if the reality were perceived correctly they would in no way be taking on any kind of risk.

VD: Well sure, look at all the money that went into Facebook and how much of that got reallocated and blown away. The problem is that it's a very simple problem at heart. The problem is that once you start pretending that something has value that it does not and then you start having people make decisions based on that, it's basically like having a small problem in your engine.  If you don't stop the car and fix the problem in the engine eventually you're going to crack the block and do something really bad to the engine. So what we've had is pretense piled upon pretense piled upon fraud piled upon fraud and so now the entire financial system is one massive collection of contradictions and illusions, and then you pile on that all the bad decisions that people are making on the basis of those illusions and you have something like we all pretend that Facebook is worth whatever billion and then...how can we even pretend the market is giving us any information about pricing when Facebook is worth 200 billion one day and a month later 30 billion.

BG: That was the big hype. Those people should go to jail.

VD: I'm not sure about that because with Facebook everybody was pretending. I don't think anyone needed to particularly lie about it. I don't follow this stuff closely and I knew there was no way Facebook was worth what people were bidding it at but the problem is because the retail, the mom and pop retail investor, with the exception of their 401(k) have completely exited the stock market. If you look at the volume of S&P 500 or NYSE the volume of stocks traded is about one-third of what it was five years ago.

BG: Actually if you count for the high volume trading...

VD: ...which is like 75 percent of it. So, it's already one-third, so if you take away three-quarters of that, there is no market anymore. Talking about the market is at 14,000 or whatever is totally irrelevant and no longer has any meaning and that's what I meant about how everything has become an illusion.  And eventually the veil is going to slip and that's when its probably not going to be very pleasant for everybody.

BG: Let me ask you, first of all let's assign a timeframe. When do you think that veil does slip?

VD: I have uniformly been tremendously unsuccessful at anticipating time frames; I'm always early. One of the reasons why...

BG: You were there in 1991.

VD: I was honestly, I have expected all this sort of stuff since about 1997, '98, so the fact that the whole process has gone on this long astounds me. And even in 2008, when I knew that the Fed was trying to paper over the gap in private credit by substituting public credit, I looked at the charts and thought they can't possibly do this for more than two years, well its four years now and they're still doing it. They actually doubled the amount of federal debt in four years. Who would have imagined that would even be possible? But, anyhow, I think that I do not see that it is possible for it to continue another four years. I would anticipate that at some time in the next presidential term that its all going to have to come to a head, probably because of China.

BG: And why because of China? What is it China is going to do that is going to bring about this collapse?

VD: Because I think that China is going to be completely unable to continue this whole process of propping up the US Treasury. When we talk about frauds and illusions, most of the economic growth in China is an illusion. If you look at the steel statistics China...

BG: There're no real statistics in China. You can look at electricity usage but thats about the only statistic you can rely on for anything.

VD: You can also look at the steel stuff because those are sales. I have a friend who works for one of the big Russian ones and they look at where...they know who they're selling steel to and how much they're selling. And for years they have been selling more and more and more to China, but what's come out is that China hasn't been using that stuff because they are building up this big powerful infrastructure, they've basically been building these ghost cities that no one lives in.

BG: I was in China a couple years ago and basically what they call whooping cranes, you go to any city and any town, there were these cranes clustered together and empty high-rises.

VD: Right.

BG: So now they're ghost towns. But China is a command-controlled economy. The government says, when you got the crash in '08, "banks lend money" and that's what banks did. To whomever and whatever.

VD: Right.

BG: And this was then two years ago and they only started having inflation stated to creep in, for instance their rent expenses going up 20 percent a year. And food costs were going up 15 percent a year. So this is, that's like the big problem. The cities can survive because they were growing at the time, but half the people live on $3 a day.

VD: Yeah, when that whole process over there starts to break down, which there are already numerous signs of it according to various things that I've read. Then the jig is essentially up because right now the idea that China is going to somehow grow us out of this is pretty much the last fig leaf for me. Nobody's counting on Europe to rescue America.

BG: They're broke. They're worse than we are.

VD: Right. And all the Americans...well that's not quite true. America's financial situation is actually worse than Greece's, its just that America can always count on Japan and China to keep buying their debt. But that's what I was saying, once China or Japan no longer feels they're able to do that, then that's when America suddenly starts looking at the same situation that Greece is.

BG: Right, there's no one there to repatriate. So now the next step, all right, this thing breaks down. So what does that mean "break down?" What kinds of, do we go into a depression or a deflation or an inflation?

VD: (laughs)

BG: The way I look at it, the things you hold dear, like a college education, healthcare, transportation, buying a car, those things will cost more then ever. And the things you don't need...

VD: Yeah, and they'll cost more than ever whether you call it deflation...

BG: Right, that's one byproduct, but the overall is it going to be like the 30's where a dollar is dear, or will it be like Argentina?

VD: I suspect its going to be more the former, this is something that we have...I call it the 53 trillion dollar question...

BG: (laughs)

VD: ...because that's how much total credit market debt outstanding there is. And so a lot of people think we're going to inflate our way out of it by increasing the money supply but the problem is the money supply is nine trillion. So in order to get rid of the debt by inflation you have to basically run inflation at about, what is that, about five times.

BG: To bring up to the quantity of paper in order to elapse the amount of debt.

VD: Yeah, I don't see that happening especially when we already know, if you look at the...when the FDIC closes a bank down we actually get to see how many of the assets they reported were actually worthless. And I calculate that about 40 to 45 percent of all the assets being held by the banks, at a certain value, about 40 to 45 percent of them are worthless. So what's going to happen is that when all that stuff...basically all that debts going to get disavowed, its going to get written off. So that's going to cause a lot of problems when, because of other debts and stuff that are predicated on somebody paying that. Kinda like the whole sub-prime issue.

BG: Mm hmm

VD: And so, at that point that's when you start seeing some major problems. I think what's going to have to happen is the banking, the entire banking system will probably get nationalized. That's usually what happens.

BG: Right, well sure when the banks are broke and they'll just seize up.

VD: Right, I think that everyone's going to lose their 401(k)s, that all of the money in the stock market and stuff, and that sort of stuff, that will all get seized and then there's going to...

BG: The government will directly take people's 401(k) money?

VD: Yeah, I think that's fairly obvious.

BG: It'll be like Hungary or wherever?

VD: Yeah, it's an easy way to do it and it's going to be easy to come up with some kind of promises to make up for it. Its much easier to grab people's stock market assets for whatever they might be worth rather than to take their bank account because people actually need their bank, they need their money and their bank accounts to survive. And so, when I think about these things I usually try to think about them from the perspective of, okay what if I am...

BG: I'm the government and I'm broke, what am I going to do?

VD: Right, what am I going to do in order to....I mean they've got two problems. Number one, they need to try to protect as much of the status quo as possible, because they like the status quo, they're in charge, they're living large, they want to preserve it. But they also know that they can't piss the entire population off. That's when revolutions happen.

BG: Its better for them to piss off the people of wealth because they're much smaller numbers.

VD: Right, the thing that is very hard for people to understand is that there's a huge difference between the super-wealthy elite and just kinda your average wealthy...I drive 2 nice cars, I'm retired and I have a membership at the nice country club.

BG: Right.

VD: There's a lot more of the wealthy than the super-wealthy and the two groups have very little in common. And so, I mean I realize there are a lot of people who are very nervous and paranoid, and maybe even rightly so. Certainly the fact that Homeland Security and practically every government agency seems to be buying hundreds of thousands of, if not millions of, ammo rounds is not encouraging. And it's not encouraging that Obama has been claiming the right to assassinate any American citizen that he personally designates an enemy.

BG: Right. I wanna go back to this issue about the government seizing assets. So how, if you're a private citizen, how do you protect your retirement assets?

VD: You gotta sell out. I know there's a penalty...

BG: So you're saying...now even if you roll to a Roth IRA you're still in trouble, you're saying they'll grab the Roth IRA as well?

VD: You've got to get completely out of the markets. Ann Barnhardt had a very good piece on this. There's a very important case the other day. It was dealing with the company called Sentinel, a financial institution called Sentinel...

BG: Mm hmm

VD: ...and they did the same thing that John Corzine and MF Global did. Which is they made some mistakes, they made some bad bets, they ran out of money, they got called on their margin.

BG: Right.

VD: So then what they did is they took out a loan using their client's assets as...what do you call it? Not leverage...

BG: Collateral.

VD: Collateral. Spaced out on that, sorry. So anyhow, they used their customer's assets as collateral and then they made more bad bets and lost that.

BG: Right. Well sure, if you're a loser once you'll be a loser twice.

VD: Right. And so, at this point they're gambling desperately.

BG: Right, they're doubling down. The guy lost everything at the casino and he wants to make it up on the next big hit.

VD: Exactly. So anyhow, they lose of course and now they're bankrupt. But, all the depositors' assets are gone.

BG: Right.

VD: Same thing with MF Global a couple years later. I think, so anyhow they've still got some assets left overall. In bankruptcy...

BG: Right.

VD: ...bankruptcy court, when big companies go bankrupt they've all got some assets somewhere.

BG: Sure.

VD: Well, the judge comes and says the people with the first...the customers are saying hey, our money...this is our money, it's supposed to be separate, we've got all kinds of contracts saying its our money, we should have first claim on whatever assets are left. But the judge decided that the folks who loaned the money against those people's assets actually came first.

BG: They came first, right. Not the people who's money was stolen, but rather someone who had to lend against stolen money.

VD: Exactly.

BG: Which I thought you couldn't do that.

VD: Well, you might have thought that but you'd be wrong.

BG: So that rule has changed?

VD: Right.

BG: So let me ask you, where do you put your money then?

VD: Not in the market. You probably want to put it with some small local institution or put it into some kind of physical assets, whether it be land or gold or, you know, just....those are still things that can be taken away from you but at least there's a chance you might notice.   You know if you've got your money in a Roth IRA with Citi Bank, or worse, Bank of America, it could be gone for years before they bother to tell you.

BG: You think you have money there and it's really not there?

VD: Precisely. That's exactly what happened to the people at Sentinel, that's exactly what happened to people who were at MF Global.

BG: But actually, if you just transfer your assets every year, from one institution to the next, wouldn't that, you know, isn't that a way of beating the system as well?

VD: Well, only if things go down one at a time though.

BG: Oh I see, they all go down at once...

VD: But what I was saying is that I think is...you asked me what's going to happen when the whole system locks up. And what I think is going to happen when the whole system locks up...and again this is what I would do if I was dictator for a day...they will take everything and then they will promise to pay it out as part of Social Security.

BG: So, right, if you want the security you have to buy treasury bonds. Something like they did in Hungary or whatever.

VD: Yeah, there's always a way of doing it that sounds a lot less....that sounds less unpleasant than, "Oh, guess what, all your stuff is gone and if you're lucky maybe we'll throw you a handout here and there."

BG: Right.

VD: You know, now and then. And the problem is that's the good outcome. That's assuming we've got folks in charge who actually mean well and who would really like to pick up the pieces in a relatively positive way.

BG: Right.

VD: Obviously history tells us that generally when you have a complete breakdown and that sort of thing, you either get chaos, division and separation, like we saw in Yugoslavia, like we saw in the Soviet Union, or you get the man on the white horse riding in and everyone says Hail Mussolini and then six years later you're fighting some stupid war trying to create an empire in Abyssinia.

BG: Well, we're always fighting a stupid war so that's, you know...

VD: Yeah, at least for Americans its really nothing new in that sense.

BG: Its just another day at the office.

VD: My concern is that because of...40 years ago or so even 30 years ago, America was kind of two different countries. You had the South and you had everywhere else.

BG: Right.

VD: No doubt that there are still...I'm sure there's still plenty of people across the South who are just patiently waiting for Round Two. But, now there's more like five or six distinct nations, not necessarily blood-nations, but very distinct groups that, in times of severe economic stress, are not likely to stick together but are likely to stick together against everyone else. You've got the Hispanic population, you've got the black population, you've got the Muslim population, you've got the South, you've got the sort of mid-west/middle class sort of thing and then you've got the coasts. Its not too hard to imagine all of those different groups separating and basically wanting to go their own way and attempt to fix the challenges...attempt to fix the problems and meet the challenges by themselves in their own way rather than as one giant 310 million strong country.

BG: So in essence you see the nation breaking apart?

VD: Yeah, all empires break apart.

BG: Right.

VD: And the more diversity that you have the faster you're going to break apart and the more severe the stresses are. And so the whole melting pot concept has always been complete garbage. It was a romantic idea of a British Jew who came to Britain from Russia. It had nothing to do with anything relating to the American experience whatsoever. And we've seen time and time again we've seen...look what we're seeing in Europe right now, the whole European Union thing was supposed to be an idea to create a European people, but I can tell you that is simply not happening in any way.

BG: That was just a wet dream of political...the politicians and the academics.

VD: Of course, but what I'm saying is that we're actually seeing much stronger...we're seeing the rise of national interest in places it hasn't been for centuries. I mean, Scotland is on the verge of demanding independence.

BG: I got to tell you this incident, I didn't realize that you say this about Scotland. I'm at the casinos down at Atlantic City last weekend. These two Scots were extremely drunk were sitting in the...they were in the elevator.

VD: Wait, wait, wait...I find that very hard to believe, some Scots were drinking alcohol?

BG: Yeah, now there's drinking and then there's like under the table drinking...

VD: (laughs)

BG: ...where they're literally, they're holding up the floor lest it fall down kind of drinking.

VD: Right.

BG: So, but let me make my point is so this woman says, she couldn't tell an accent from a hole in the wall, so anyway she says, "Are you German?" The guy wanted to just about kill her.  He got up off the floor and he started, he was like ready...he had to be held back just about because this woman thought he was German.

VD: It could have been worse, he could have called him English.

BG: That's true, too, but I guess people have a problem with the Germans because they're blaming Germany for the whole debacle, so Germany does have a part to play in this. Or German corporations.

VD: I really enjoyed the last time that England played Germany they had this chant going that was, "Two world wars and one world cup, doo dah doo dah!"

BG: Well hey, at least they got a world cup.

VD: Anyhow, I think that we're going to start seeing some of the same stressors that affected the Soviet Union, that affected Yugoslavia, that are now affecting Europe, that are also affecting Great Brittan. I think that we're going to start seeing them become...I mean right now its still very early and I think that most people would think that I was kind of crazy to point it out but you know, when I was warning about the stresses to the global financial system in 2002 and people all thought that was crazy until six years later when suddenly Henry Paulson is on his knees begging Nancy Pelosi to give him lots of money so there won't be tanks in the streets.

BG: So, there is no place to hide from this...this coming tsunami, is there?

VD: No, I mean that's why I like Italy because its kind of pre-collapsed. I like living in a culture where people already know how to live in elements of complete corruption and chaos.

BG: (laughs)

VD: You know, its nothing new to them, they don't care.

BG: People still haven't figured out how in this country...the reason why I wanted to bring you on to talk about Romney...and people haven't figured out that the politicians that there still is some semblance that when they speak to you, you really should listen to what they have to say.

VD: The thing that's a little bit frightening about Romney is that...previously I really didn't really think much of him, I mean I'm not a really big fan of Mormons, I'm not a big fan of flip-floppy liberal Republicans, but that's all stuff that is within the framework of things you can deal with, you know?

BG: Right.

VD: But I mean, "ooh a politician lied and changed his position"!  This is hardly news. But what is very troubling to me is the way he and his team behaved at the Republican National Convention because...and this is why, it's not because I support Ron Paul (although I do), it's because everything that he did was totally unnecessary. He did not have to bend and break the rules and change them. He did not have to do things like...

BG: He didn't have to stifle dissent.

VD: Precisely. There was absolutely no need for him to stifle any of that, he simply did it because he couldn't stand it. And I think in a time when the country is facing some of the most severe stresses that it has probably seen since the Civil War the last thing that you need is a President who cannot tolerate dissent. Because, if you've got...

BG: He'll start locking up half the population...or siccing the IRS on them, they'll load up and be like, "Volunteer to join the IRS and round up your neighbors."

VD: Yeah, I just I have the feeling that if the situation gets much worse and Romney is the President, that he is going to react in precisely the wrong way, and he's going to take a bad situation and exacerbate it.

BG: Well, this is a guy who comes from Wall Street. Wall Street owns the government. They're the ones who created this mess by foisting their desires on the government and he's, you know...but Wall Street's finger prints are everywhere. We have what was her name this what was the other woman, Kagen, who served on the board of directors of Goldman Sachs. Their finger prints are everywhere.

VD: But that's why I think that we know that Romney's going to win the election because although Obama, I and others have referred to him as President Goldman Sachs....

BG: Right.

VD: But that's just because he kept trying to appoint people from Goldman Sachs to the Cabinet but...

BG: Well he's trying to reward, return the favor.

VD: Right, but that's the difference, he's trying to return the banker's favor but he's not a banker himself.

BG: No.

VD: And so I think that the fact that the Republicans are putting up a true member of the club versus somebody who is merely friendly to the club, probably tells us who is likely to win in November, that's why I was willing to go out on a limb and predict that Romney will win, back in the middle of August when the New York Times and Nate Silver and all the professional pollers were saying that Obama is like 75 percent likely to win, or whatever. We'll see.

BG: As they say you always got to follow the money trail and clearly the money trail is finding its way to Romney.

VD: Right.

BG: Is this turn of events and leaders, as Doug Casey once remarked, going from Caligula to Nero?

VD: I don't...no, I mean Romney is not a Nero figure, in any way. And really, Obama's not a Caligula, Obama just wants to hang out and do nothing.

BG: He wants to play golf. I think...if you had wrote this or I read this elsewhere but comparing the two its: Obama he enjoys the trappings of power...

VD: Right.

BG: Whereas Romney enjoys the power.

VD: Yeah, that was something that I wrote.

BG: There you go...see I pay attention to you.

VD: (laughs)

BG: I thought that was just a great line...and that was how really disturbing because that's who these people are. I mean...Obama has plenty of bad ideas but...

VD: And that was before the Republican National Convention so...

BG: Yes.

VD: Now that we've got somebody who like is really organized and is willing to work hard and doesn't tolerate dissent. That's just...I'd frankly prefer the pot-smoking golfer.

BG: Or cocaine or the bisexual golfer.

VD: As long as he's not working, you know.

BG: That is true. But then he appoints...either one is obviously a bad choice because then he just appoints all these bureaucrats to make decisions in government.

VD: I'm not voting for Obama or Romney...

BG: That is true.

VD: The point is that if its not Caligula to Nero it may well be out of the frying pan and into the fire.

BG: Yeah. What's bad is that you're having, you're being someone who's "a free market person" which is like, "war is peace." And the "free market" will be blamed for what comes next. It is a result of capitalism that will generate all the coming misery.

VD: I don't know that it makes...I'm not terribly concerned about where the blame is going to be apportioned. There's going to be no shortage of it.

BG: Right.

VD: The important thing for people is just to be building up contacts in their communities and making sure that they have some resources so that if they can't access their bank account for a week or month that they have the resources to get by on their own. And that's the important thing and people are doing that. There's a reason why gun sales are up and ammo sales are up. People understand that something is coming and they are attempting to do their best to prepare in whatever small way they can for it. The problem is you can't...you can never adequately prepare for the unknown, but what you can do is at least be sure that you're in your local community, and with your friends and family.  People understand, hey look, when things go bad, if there's tough times, we have to stick together and we have to help each other. Human civilization has survived everything that the idiocy and evil of Man has ever thrown at it and it will survive this too.

BG: How many years of darkness do you think we'll be entering into?

VD: I couldn't possibly say. The only thing that I'm certain about is that we've pretty much reached the end of the American system.

BG: The personal, the pursuit of happiness kind of system?

VD: Yeah I think that that is coming to...rapidly coming to an end. What comes next? I don't know. Who in the last days of Rome predicted France and the Holy Roman Empire and England or even what happened in Constantinople? These are things that we cannot reasonable expect to foresee, but we can expect is that every day the sun is going to rise, it's going to rain sooner or later, and we still have to answer to God for our actions.

BG: And the wheel is round...where there's an action there's a reaction. What's occurred there's payment...a payment day is coming. But I just want to get back to this point. This is the most disturbing that you've said today which is...I have a feeling of comfort but, I understand about reaching into accounts but, you're saying anybody holding any bank, any money in any security institution, doesn't have to be necessarily in stocks it could be sitting in cash, that that's all fair game for the government? Or that these institutions will just disappear?

VD: I don't think that they will mess with cash in the bank, not initially. Even in places like Argentina and Greece, at most what they've done is told you that you can't take more than a certain amount out at any time. Frankly, that's pretty much the way that it is in the US already. You can take it out but they still have to file reports and whatnot. The mechanism is already set up for that kind of stuff and it has been for 20 or 30 years, ever since the War on Drugs.

BG: So, now let me ask you, is this the Great Conspiracy, or is it just the product of incompetence?

VD: Hmmm. To be honest I think both. I don't think that there are that many people who really want to crash it. If you're part of the elite and you've been living large off it for 50 years, why do you want to bring it to an end? People that are really focused on the, "Oh Bill Clinton..." I mean, the whole thing about Obama wanting to become a dictator, we've heard that about Bill Clinton and I'm sure people were hearing it about Richard Nixon.

BG: Right.

VD: The reality is that most people really want to protect the status quo. Now there are people who want to create a big one world government and stuff, but crashing the USA is not actually a very effective way of doing that when the USA was the main mechanism for creating it in the first place.

BG: Right. You're killing the goose.

VD: There is something to the whole divide and conquer thing, but you don't need to divide and conquer when you just go ahead and you buy the Senate and get them to pass a treaty.

BG: Right, you do whatever you want to do, but ultimately you're ah...but let me ask you, on the one hand you're doing what you want to do as far as big business, but about the explosion of social services and social benefits, is that just something to add to placate the masses?

VD: They have to do that because if they don't then we'd already be living in Yugoslavia.

BG: Right, there'd be uprisings and all that.

VD: Yeah, things would probably be fine in some places, but in other places it would be completely unlivable. That's what they're seeing in Greece...that's what got Greece in trouble in the first place, they were paying everybody to do nothing.

BG: (laughs)

VD: The social services is... that's the bread in the bread and circuses.

BG: The bread and the beer.

VD: Precisely.

BG: By the way Vox, I blew off all my other guests because I'm having so much fun talking to you, by the way.

VD: You're too kind.

BG: We have about five minutes left to wrap up so I just want to leave something positive with our listeners and I think I want to reiterate how you button down for the coming storm.

VD: Well, I think that you have to look at the main things that you need. The main things that you need are: food, water, and you want to be around good, trustworthy God-fearing people, you want to have some means of protecting yourself and your family and your surroundings. So, its just basically going back to basics and not living in this modern way of assuming that I don't need to have anything, I'll just go down to the shops and pick it up today.

BG: So you think people should start building something to secure foodstuffs?

VD: I think this is one area where Mitt Romney might be a good role model. If I understand correctly Mormons are expected to keep a year's supply of food and water and so forth. That's not a bad idea. If nothing else you can get by on your dry beans and Evian.

BG: I take it that requires a lot of storage to put something for a year?

VD: It's not as bad as...doesn't take up as much space as you might think but, and its not as expensive as you might think. This is the sort of thing where maybe instead of going to Disneyland, you set yourself up so if there are issues you're not quite as worried about it right away.

BG: You make the investment and you put away the money and you figure out the security and all that.

VD: The stock market's at relative highs on super low volume. You might as well take your money out and get something for it rather than just watch it go down, when the market starts crashing.

BG: You mentioned about buying land but land looks like, like everything, real estate is very much overinflated...

VD: Sure.

BG: Do you think land will also decline?

VD: It might but its not going to disappear into nothing like Facebook.

BG: (laughs)

VD: At the end of the day you can still build a house on it.

BG: But that land could sit there for a long time to come before you could do something with it...you could have cash tied up in the value.

VD: But what you have to understand is that in times of economic depression its all about asset protection. Its not about making money. You know what I mean? Economic booms are when you want to leverage and grow and all that sort of thing. What works while....what your objective is and what your focus is in times of economic growth should not be your objectives in times of... yes, there are people who are trying to profit on it there are people who are trying to short Facebook or short Apple or whatever but the problem is that even if you make the right call it doesn't matter if your broker goes out of business.

BG: You have to worry about the brokerage, the brokerage firm?

VD: Right, exactly.

BG: Then you got real issues there. Hey, by the way does your book address those issues? The Return of the Great Depression

VD: Oh, some of them, its a little bit more...my focus tends to be a little bit more theoretical and abstract than particularly practical. But I've been told that a lot of people who are into the practical side of it nevertheless like it because they like things being put into context so that it makes sense to them, rather than just sort of this, "Well here's this dark cloud and we don't know why and we don't know what."

BG: Right. Like any doctor, you want them to analyze why you have the condition that you have and then that way you can make adjustments.

VD: Precisely.

BG: Hey with that Vox, we've run out of time. Vox Day, just a pleasure. Really appreciate your time. Libertarian political columnist. Get his book, The Return of the Great Depression.


NB: Thanks very much to MC and BD for the transcript.

Labels: , ,

50 Comments:

Anonymous Jeigh Di September 21, 2012 8:06 AM  

Two things;
1. God is in control.
2. Anything you have, they can take.

Anonymous Vidad September 21, 2012 8:18 AM  

Vox... that was very good.

Anonymous jack September 21, 2012 8:25 AM  

Somehow, when listening, I managed to miss that part about Portugal having to disband their whole fishing fleet from 150,000 ships to zero. Because someone decided they had an unfair advantage? This is beyond bizarre. How could any country agree to that short of at the point of a gun?

Oh.....

Anonymous Feh September 21, 2012 8:42 AM  

Some more happy news.

http://moneymorning.com/ob/economist-richard-duncan-civilization-may-not-survive-death-spiral/

Anonymous Porky? September 21, 2012 8:49 AM  

Chinese ghost cities?

Blogger Nate September 21, 2012 8:53 AM  

Porky... you didn't know that?

Anonymous Porky? September 21, 2012 9:06 AM  

Nope.

Sounds like the modern version of the five year plan. Or some kind of cargo-cult way to transition out of agrarian society.

Are commies all just morons?

Anonymous Porky? September 21, 2012 9:09 AM  

Didn't know about the decimation of Portugal's fishing fleet either.

How does an entire industry simply roll over and suck their thumbs like this?

Great interview Vox and Greenberg.

Blogger Joshua_D September 21, 2012 9:30 AM  

Beans, buds and bullets. Sounds like a good plan. Good interview.

My thanks as well to MC and BD for the transcript.

Anonymous Josh September 21, 2012 9:40 AM  

Are commies all just morons?

Yes.

Anonymous FrankNorman September 21, 2012 10:15 AM  

If you have a fishing-boat, why not just hop aboard and sail to somewhere where they will let you have a business?

Anonymous Athor Pel September 21, 2012 10:15 AM  

"Porky? September 21, 2012 9:06 AM
...
Are commies all just morons?
"



Mankind in the aggregate and many times individually is a moron. But he is definitely a moron in the aggregate. His concept of reality is derived by what everybody around him is telling him. If any one assumption held by the mass of mankind is false then their mental model of reality is false and will be brought up short by objective reality eventually. It's only a matter of time.

Mankind sets up society wide self-destructive circumstances by default because he's self-centered, short-sighted in respect to time, blind in respect to objective reality, and full of pride in self.


It's why we needed and will continue to need Jesus.

Anonymous Paul S September 21, 2012 10:22 AM  

Where is the source for the Portuguese fishing fleet "decimation"?

Blogger jamsco September 21, 2012 10:22 AM  

Vox Poem For The Day:

Far be it from me
to claim
that young people are anything but stupid

There's nothing that I find more annoying.

and
speaking as someone who used to be young

I remember I was young
and
that's why I know that young people are
stupid

because I was too.

Anonymous bw September 21, 2012 10:22 AM  

How does an entire industry simply roll over and suck their thumbs like this?

Entire Nation-states and their people have bowed and rolled over for this in the last Century.
That was the purpose of the world wars and the interconnected banking/finance system, and it should be noted in this interview what is said about who is the money/muscle behind the push for global governance. 'mericans also want the status quo when it comes to their training and belief system concerning their "authorities".
It is high psychology and mass manipulation to wind up being and enabling the very thing you claim to hate and be against. Quite the Jest.
We're all commies now.



Blogger jamsco September 21, 2012 10:23 AM  

And I agree that it was a good interview.

Blogger Vox September 21, 2012 10:24 AM  

Vox Poem For The Day:

Okay, that was pretty funny, ee cummings.

Anonymous Athor Pel September 21, 2012 10:25 AM  

"FrankNorman September 21, 2012 10:15 AM

If you have a fishing-boat, why not just hop aboard and sail to somewhere where they will let you have a business?
"



What was it about this being a global financial Götzen-Dämmerung that eluded you?


Blogger jamsco September 21, 2012 10:35 AM  

I should have lower-cased everything.

Blogger Vox September 21, 2012 10:50 AM  

Where is the source for the Portuguese fishing fleet "decimation"?

I don't know anything about it. I think he heard an exaggerated version. From what I understand, the catch is down something like 40 percent and the number of boats has fallen from 13,000 to 10,000. It's more of a literal decimation than a complete destruction.

Blogger Nate September 21, 2012 10:55 AM  

wouldn't a literal decimation be going from 13,000 to 1,300 fishing boats?

Anonymous Lysander Spooner September 21, 2012 10:56 AM  

Dirt, and shiny metal you dig up from the dirt.

Same as it ever was.

Anonymous Athor Pel September 21, 2012 11:00 AM  

Literal decimation is a loss of 10%.

Metaphorical decimation is akin to annihilation.


Blogger Derrick Bonsell September 21, 2012 11:06 AM  

I don't think Romney has a shot at winning. The only major polls that support the race being even are Gallup. Every other major polling company has Obama with a comfortable lead.

Anonymous Porky? September 21, 2012 11:27 AM  

Athor Pel: Mankind in the aggregate and many times individually is a moron. But he is definitely a moron in the aggregate.

Not true. In the aggregate, the group will almost always guess the number of jellybeans in the jar with surprising accuracy, if we go with the mean of all the guesses.

It seems to me that it is the minority pigs wanting to control the animal farm who, by virtue of their "superior intellects", always turn out to be morons in the aggregate.

Your point about Jesus is well taken, though.

Anonymous VD September 21, 2012 11:56 AM  

wouldn't a literal decimation be going from 13,000 to 1,300 fishing boats?

No, 13,000 to 11,700. I always wondered why people use it as a synonym for completely wiped out.

Anonymous WaterBoy September 21, 2012 12:05 PM  

"Known as the Internet Superintelligence..."

"the" Internet Superintelligence?

"THE" Internet Superintelligence??

As if there could be only one.

Seriously, though, good interview. At least on epaper.

Blogger Joe Doakes September 21, 2012 12:28 PM  

A few years back, I went to a pub in England and said "I'd like a pint of bitter" in my best English accent.

The barman told me "we all would, Yank, but you're getting a demi-liter instead."

I stammered something about "If I wanted a liter I'd have gone to Germany" and must have looked as stupid as I sounded because half the people in the place explained it to me in loud and certain terms that I was right and the Germans were behind it and it was all a farce. Never had so many friends in my life.

Anonymous Stickwick September 21, 2012 12:49 PM  

Good information. Depressing, but good. After seeing that Barnhardt piece a while back, I've been trying to convince my family to get their money out of their 401(k)s. No sale. People are incredibly stubborn when it comes to stuff like this.

Anonymous MendoScot September 21, 2012 1:08 PM  

I always wondered why people use it as a synonym for completely wiped out.

I blame it on insufficient exposure to ancient wargaming during the critical period of development.

Anonymous JartStar September 21, 2012 1:21 PM  

Even in the South most of the major cities will be a bad place to be when things lock up.

Friends and community will matter more than anything for your survival.

Sanitary products like feminine needs, bleach, alcohol and bandages will be very important as infections will be a killer.

Get out of debt. Not only is this a biblical principal it is a common sense.

The government never has stolen people's savings directly in the equities market, but they have confiscated gold so assuming the first happens expect the second.

You are crazy if you are actually looking forward to the lock up, because despite your preparations you and some of your friends and family members might not live through it.

Anonymous MendoScot September 21, 2012 1:46 PM  

Re: Argentina's corralito. It wasn't just withdrawal limits. Most Argies saved in dollars, even under the peg. Dollar accounts were frozen entirely with, eventually, two options offered, (1) conversion to 10 year bonds or (2) conversion to pesos at the official rate of 1.4 when the dollar was trading on the street at over 4.

To justify the move, the government made a lot of noise at the time about stopping container-loads of dollars at the frontier - the rich trying to flee the country with their ill-earned gains. The truth came out later - the international banks were importing dollars to cover the withdrawals, so the government prohibited them from doing so in order to protect the local banks.

It never works. Since they imposed the exchange controls in June, our dollar-buying and exporting has accelerated. When you live next to the longest border on earth...

Anonymous Josh September 21, 2012 1:53 PM  

I always wondered why people use it as a synonym for completely wiped out

Probably because mpai.

It always irritates me when people use it metaphorically. It also irritates me when people use stadiums instead of stadia and indexes instead of indices.

To quote professor digory, what do they teach them in these schools?

Anonymous JN September 21, 2012 1:56 PM  

As if there could be only one.

There can be only one. That's where the flaming sword comes in.

Anonymous Daniel September 21, 2012 2:10 PM  

When CNN reporters talk about areas being "totally decimated," I wonder if they are talking about a sale at the mall.

I wonder if the use of "decimated" as "destroyed in large part" comes from the 1st person view of decimation. If you drew the bad lot, after all, decimation certainly meant total personal annihilation to you!

It's not like the guy went home and said, "Bad day at the front, honey. We got totally decimated, and I finished in the bottom ten percent."

In other words, maybe somewhere down the line, decimation's association w/ an execution by bludgeoning began to refer to a "fatal beating."

I really need to get my hands on an OED.

Anonymous Stilicho September 21, 2012 2:16 PM  

No sale. People are incredibly stubborn when it comes to stuff like this.

Normalcy bias is a stone cold bitch.

Anonymous JartStar September 21, 2012 2:22 PM  

Re: Argentina's corralito. It wasn't just withdrawal limits. Most Argies saved in dollars, even under the peg. Dollar accounts were frozen entirely with, eventually, two options offered, (1) conversion to 10 year bonds or (2) conversion to pesos at the official rate of 1.4 when the dollar was trading on the street at over 4.

This is why even cash is not safe. If they are going after the "rich" who have >$50K in a 401k there's no reason they couldn't confiscate cash over $50K in FDIC(!) insured accounts. "We are in a crisis! Those rich greedy people won't spend money to help the economy so we will do it for them."

I don't know the statistics, but I bet a very small portion of the population has even >$20K in cash.

Anonymous JartStar September 21, 2012 2:28 PM  

Found it here. here

Average American family savings account balance $3,800
Average amount saved for retirement $35,000

Easy. Take 401k amounts $50,000+ and take savings accounts $10,000+. The average American would never feel it.

Anonymous Orion September 21, 2012 3:27 PM  

Communists are all about the "numbers" because they are all about the "scientific management" of society. The U.S.S.R. used to proudly point to rising production of porcelain and proclaim the improving standard of living for their people. Never mind it was all in poorly designed toilets, the sheer tonnage was impressive. Pretty much the same effect seen in major corporations on their way down. Downplay all of the inconvenient numbers and focus on the important ones. Kmart for instance. Grew to over 2000 stores in the final days before bankruptcy number one, despite hemorrhaging money the prior few years. Meaningless growth. Talk up the "positive" points and ignore the inconvenient ones enough, you get to the White House.

Anonymous Jeigh Di September 21, 2012 4:31 PM  


The U.S.S.R. used to proudly point to rising production of porcelain and proclaim the improving standard of living for their people. Never mind it was all in poorly designed toilets...

Toilets WERE evidence of an improving standard of living. Many still have nothing but a hole in the ground.

Blogger James Dixon September 21, 2012 4:37 PM  

> If you have a fishing-boat, why not just hop aboard and sail to somewhere where they will let you have a business?

Most fishing boats are made for local travel, not long distance voyages.

> ...wouldn't a literal decimation be going from 13,000 to 1,300 fishing boats?

No. A decimation is a reduction by 1/10. 13,000 to 11,700 would be a decimation. But I see others beat me to it.

And quit giving them ideas, JartStar.

Anonymous JCclimber September 21, 2012 6:01 PM  

I used to look forward to the coming economic catastrophe, because it would let a little blood out, there'd be some serious financial pain, some serious hunger....but then we'd get through it and the recovery would be strong.

But by kicking the can for the last 20 years, it is no longer something to anticipate with anything but concern (fear if you're not secure in your faith), because the pain will be massive, the blood will literally and liberally flow, and I doubt we will have recovery to anything beyond 1930's economic health.

Anonymous bw September 21, 2012 6:14 PM  


There can be only one. That's where the flaming sword comes in. JN

+1


This is why even cash is not safe. If they are going after the "rich" who have >$50K in a 401k there's no reason they couldn't confiscate cash over $50K in FDIC(!) insured accounts. JartStar


Cash is not safe........Unless it's in YOUR SAFE.
YOU are the insurance for your cash.
Why keep much of anything in the FDIC banks?



Anonymous bw September 21, 2012 6:16 PM  

the blood will literally and liberally flow JC


Poor govt workers and their families. So much blood....
and all because they were the bad guys....

Anonymous Outlaw X September 21, 2012 8:09 PM  

Very impresive

Anonymous Professor Digory September 22, 2012 5:04 PM  

Josh: "It always irritates me when people use it metaphorically. It also irritates me when people use stadiums instead of stadia and indexes instead of indices."

Languages evolve, might as well get used to it.

dec·i·mate -- 3a : to reduce drastically especially in number b : to cause great destruction or harm to

sta·di·um -- plural -dia or sta·di·ums

in·dex -- plural in·dex·es or in·di·ces

All from http://www.merriam-webster.com


Anonymous tdm September 23, 2012 6:41 AM  

VD, I really appreciate how when you are interviewed you turn down your super-intelligence and just talk, trying to get as much information out as possible while not correcting your host on every point. I believe in person you are a very nice guy.

Anonymous DrTorch September 23, 2012 9:11 AM  

Wait, you're known as "the" Internet Superintelligence?

I thought you were just "an" Internet Superintelligence.

I think Liz Weston is gonna be steamed.

Anonymous Mudz September 24, 2012 11:33 PM  

I always knew that my habitual dictionary checking would come in handy one day. Now I can save myself the five seconds required to look through it now and say that 'decimation' means to kill off a tenth of the population in question. It was I think, some Roman thing for quelling moody legionnaires.

My victory is somewhat mitigated by the fact that people already explained this. (And I ended up checking the dictionary anyway to make sure.)

I feel so fulfilled. :D

Blogger tz September 30, 2012 4:41 PM  

I finally read the whole. At financialsense.com, jim pulplava noted the un agenda21 means you can on land, but you can't do anythyimg with it without permits, fees, etc. Remember the endangered species act.

Otoh, the Lakota nation just seceeded. Does anyone have contacts for refugees willing to fight for independence?

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