Jim Rickards: Will Trump Save the Economy and Drain the Swamp?

27:42People stopped, you know, losing their homes. That great recession seemed to be bracketed completely by changing the way banks mark assets on their balance sheet. And when they got rid of the mark-to-market requirement, things took off. What would be a catalyst now that would get people lending? Well, first of all, you're exactly right about mark-to-market. It was March 8th or 9th. I forget the exact day, but it caught March 9th, give or take a day, 2009. Yeah, March 9th, exactly. You could set your watch by it. In other words, when it was FASB, Financial Accounting Standards. It was the bottom of the market.

28:21When FASB got rid of the mark-to-market rule, the stock market took off that day. And to his credit, Mark Haynes, who passed away, but he was the anchor on CNBC Squawk Box at the time or whatever the show was, called it. And Aaron Burnett, who used to be a good journalist, gave him credit. They called it the Haynes bottom. But the bottom line was the market turned on a dime. But that was the reason. A quick aside, a good friend of mine was a board member of FASB at the time, and he was the hawk on mark-to-market. He insisted on mark-to-market. He said, you know, if you don't do that, the books are cooked, you don't really know what's going on, et cetera, et cetera.

29:02But he was basically run off the road and then later resigned from the board. But that was the reason, which was the board said, no, we've got to go back to our phony baloney accounting, historic cost accounting. which meant that you didn't have to, you could have real mark-to-market losses, but you didn't have to run it through the income statement. You might have to run it through the balance sheet, but not the income statement. And you make the point in the book, actually, that they, in a weird way, I'm going to make the link

29:35with SVP, Silicon Valley Bank, and Silvergate by the Fed saying, hey, your bonds are good. Right. Even if they're 30 % down in value, don't worry, just we'll take care of you. Like even if you need the money, just give us your bonds. We'll assume they're all good and we'll give you the money. They kind of like made it reality that mark-to-model becomes mark-to-market. That is exactly right. Obviously, interest rates in the years prior to that had gone from zero, but let's say 1%, 2 % up to 4%. But as you know, the volatility of treasury bonds is inverse to the maturity. So 10-year notes were down 70%.

30:18You bought them at auction for par, 100 cents on the dollar. They were worth 70, 75 maybe. And there were billions of dollars, scores of billions of dollars of market-to-market losses on the books of the banks that they didn't have to take. But the problem was, not to get too in the weeds, but there are two kinds of accounting for bond. We're talking about treasury securities on the books of a bank. You can have HTM, hold to maturity. So I bought them, but it's a 10-year note. I'm going to hold it for 10 years. And then you have available for sale, which means you can trade them by himself. The available for sale always had to be marked to market, but the hold to maturity did not.

30:59And the problem is if there's a run on the bank. If there's a run on the banks, now you have to sell the hold to maturity account to have the cash to pay the depositors. And once you do that, the whole thing gets marked to market. So it's just a pyramid that implodes. So you had a lot of phony accounting to begin with, but you're exactly right. In a liquidity crisis, you don't have the luxury of sitting on the hold of maturity account. You have to sell it to get cash to pay the depositors. Silicon Valley Bank, 97 % of their assets were not FDIC insured, or they were beyond the limits. The insurance limit is$250 ,000 per account.

31:38I'm sorry, Cisco had, I think,$3 billion. There were crypto exchanges. I'm not digging crypto, but there were crypto exchanges. They get dollars. They were on deposits at Silicon Valley Bank, and fives and tens of billions. There were also who knows how many startups, and they might have a$5 million account where they had done like an A round or a venture round or whatever. And I called it Crybaby Weekend, that weekend between March 9th and March 11th. uh, 2023. But, but here's what happened. The, uh, there was a run on the bank. Uh, as I say, almost all the deposits were uninsured. Uh, and, and Goldman Sachs came up with a, uh, a salvage plan.

32:23Basically they said, okay, we're going to take the hit, you know, take the hit on the books, but we're going to issue an equivalent amount of new stock, you know, to be an attractive price. That'll fill the hole on the balance sheet. We'll stabilize this whole thing and we'll move forward. The problem was, I mean, there's a lot of, there's enough stupidity to go around, but Silicon Valley Bank never, they were slow to sign the NDAs for the potential investors that Goldman had lined up. So the investors, banks and others, General Atlantic was, you know them, they were in the lead. They said, we can't do the due diligence.

32:55And they backed away, the stock price crashed. And then Goldman walked away from the deal, rightly so, because the whole thing, the whole thing had imploded. But the government did two things. One of them was exactly what you described, James, which is the, sorry, just to set the frame, Friday night, when that bank was shut down by the FDIC, they issued a press release. And what they said, this is fascinating, this goes back to the G20 meeting in Brisbane, Australia in 2014. So what was going on in Brisbane? So we were coming out of the global financial crisis, 2008, 2009, growth was slow, but it was back.

33:32But there was enormous popular unrest, people like, hey, you know, Jamie Dimon, all these guys, they kept their jobs, they got their bonuses, they're making billions. There was no punishment, no accountability. But meanwhile, we lost our business and we're unemployed, et cetera, et cetera. And the political leaders took note and they said, okay, from now on, no more bailouts. The new policy is going to be bail-in. And what does bail-in mean? It means that when an institution fails, you identify the hole in the balance sheet, Like, okay, you're insolvent. You have negative net worth. How do we fill that hole?

34:06First hit is equity. Equity goes to zero. You're done. Next hit are depositors, but we will, sorry, next hit are creditors, lenders, which can be secured or not secured. That makes a difference. But you're going to take a haircut. Is it 20%, 30 %? Don't know, but you're going to take a haircut on your bonds. and then, or we'll convert you to equity, which is a typical restructuring. And the third category were depositors. They say, we're going to guarantee the deposit, $250 ,000 in the FDIC. It's 100 ,000 euros in the Eurozone, but that's it. And if you have a deposit over and above that, you're getting a due bill, you're getting a certificate and it might be worth something, but we'll get back to you.

34:51So equity gets wiped out, bondholders take a haircut and depositors get the insured amount, but not more, and they get a chit for the difference, and we'll get back to it. And that's what the FDIC did in 2023. They actually lived up to the bail-in rules of Brisbane from 2014. It was the first time that there had been a real-world case of that agreement. It lasted 24 hours. Then you had what I call crybaby weekend, where Bill Ackman and all these guys, they're running to the White House, and they're saying, oh, you don't understand. man, all these startups, they're losing their working capital.

35:28They're not going to be able to pay the rent. They're going to have to lay everybody off. There's going to be a recession, Silicon Valley, et cetera. Leave aside the fact that 90 % of those firms fail anyway. I mean, they were kind of ignoring that, but they were like, yeah, we got to save. And the White House heard them. And then so Sunday night at 6 o 'clock, before the markets open the next day, of course, in exactly 48 hours after the first thing, they said, just kidding. deposits are insured and unlimited, every deposit is insured. Doesn't matter. Three billion Cisco, boom, you're covered.

35:59And to your point, every bank in the system, every member bank of the Federal Reserve System was given a facility. You could deliver your bonds, your treasury bonds to the Fed basically. And you would get back cash equal to the par value of the bonds, even if they were underwater. So the bonds were 70, but you're getting 100. So one-year loan, practically zero interest. But with a wink and a nod, it was like, hey, if the year's up, we'll extend it another year. That didn't actually happen because things had calmed down by then. And I looked at it. I understood it all. I followed the meeting in Brisbane, for that matter.

36:38But I thought, okay, they just guaranteed every deposit in the system regardless of insurance limits. and they just guaranteed every bond in the system at par, no matter how underwater it was. I thought at the time, I had a 15-year-old car with 225 ,000 miles on it and I thought, will you give me the market value, what I paid for my car? I'll drop off the keys, just give me the original value.

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40:12Well, first of all, it worked. I mean, you're right about that. And you're right that no one was questioning the credit of the United States Treasury. It may come to that, but not at the time. And yeah, if the Fed can hold those bonds indefinitely, they'll pay off at maturity, 100 cents on the dollar. And the Fed can hold them for 10 years, didn't have to, but they could. So you're right about that. But my thought was three distinct thoughts. Number one is you just guaranteed every bond in the system at par, and you just guaranteed every deposit in the system regardless of the insurance amount.

40:48What else you got? Meaning when the next panic hits, having already done that, the two policies we just talked about, they're still in place. There's been no walkback or rescission or termination of any. Those loans were repaid, by the way. But that facility is still in place, and the removal of the ceiling on the deposit insurance is still in place. What are you going to do the next time? What else are you going to do? Well, the only thing you can do in that world is nationalize the banks. Well, I was just going to say, and that's an ugly word, nationalize. It makes you think, oh, this is like a banana republic, which I know you in particular could potentially say we are.

41:29But it did, again, seem like a solution that worked. And if the Federal Reserve had, for instance, taken over Silicon Valley Bank instead of saying, okay, you're zero, which, okay, equity holders are zero. Maybe the lenders are close to zero. But at least for the depositors, hey, we've got the money to pay you back. Your deposits are good. So there isn't quite the same moral hazard, like let's say Greenspan cutting rates in 1997. there isn't the same kind of like moral hazard risk that happens when you're just trying to boost the stock market well my my frame of reference for what we're talking about and i lived through uh a more up-to-date version of this in 1998 with the bailout of long-term capital now i don't want to spend a lot of time on that there are books written on that but uh i was i was their uh chief lawyer i negotiated the bailout um it was uh we came within hours are closing every market in the world.

42:25But we got the$4 billion in the door, and the press release went out, and things stabilized, and all that good stuff. You know what I'm saying? You get a plane, you get four engines in flames, and you're from the runway, and somehow you land on the belly and doesn't crash. But that's about how hairy it was. But when this first came out, we called the Fed. We at Long-Term Capital Management called the Fed, the New York Fed, to tell them what was going on. We were just being good citizens. We were not asking for a bailout. We did not expect to bail. We're like, nobody's going to bail at a hedge fund.

42:55We're just too bad for us. But we just thought we'd be good citizens and call them. But they ended up with a rescue. Now, Wall Street took it over, a separate issue, took a year to unwind, a separate issue. But that's what happened. But we were as surprised as anyone that they sent us a term sheet. We went ahead and did the deal. But our model, and I was the lead, but there were hundreds of lawyers about. our model was the panic of 1907 because we were not a bank. I mean, I talked to David Mullins later. David passed away, sadly, but he was Assistant Secretary of the Treasury for Federal Finance, led the Brady Commission on figuring out the fiasco in 1987, and later Vice Chairman of the Fed.

43:40He was a good friend, very dry sense of humor, but he said to me one time during the unvice, he said, Jim, we only made one mistake. I said, what was that, David? He goes, we should have been a bank. because we couldn't actually bail out a hedge fund. You just kind of finesse it. But our motto was the panic of 1907. Now, what happened there? 1906, you have the San Francisco earthquake. We all know how bad that was. Things happened a little more slowly at the time, but the insurance companies had to sell stocks and bonds to get cash to pay the claims. And that showed up on the East Coast. So San Francisco earthquake with the financial echo was in New York where they were dumping stocks and bonds, as I say, to raise cash.

44:18And there was some chicanery going on. There were some crooks and all that. There always are. But there was the Knickerbocker Trust, and a run on the banks started. And it got worse and it got worse, and people were lined up. And it looked like a sequential collapse of the banks. There was no Fed, by the way. Of course, the Fed came along in 1913. So what happened? Pierpont Morgan, the J.P. Morgan, but they call him Pierpont, Pierpont Morgan convened a meeting at his townhouse at Mary Hill with all the top bankers in the city. And he sent Benjamin Strong, who later became president of the New York Fed and others.

44:55He said, go look at the books of all these banks. And there was a finite list and they could look at them pretty quickly. And they basically did triage. You know, triage on a battlefield is you come in wounded. Some are like, okay, you're wounded too bad, but you're going to be fine. Some are, sorry, lost cause, you're going to die. and there's a middle case where you're pretty badly wounded, but you will respond to treatment. And that's where they devote all the resources. So the lightly wounded, you're on your own. The dying, sorry. But the middle case is where they devote the resources. Pierpont did the same thing.

45:32The banks were put in three categories. Some of them was like, okay, we're all in trouble here, but you're solvent, you're liquid, you have the resources, you're going to be fine. There was another case where you're insolvent, you're illiquid, We're going to let you die. But there was a middle case where they were solvent on a market-to-market basis, but illiquid. They needed cash. And so what Pierpont said is the guys who are healthy lend to the guys who need the cash, and the rest of you fail. That was financial triage. And just a quick footnote, he took the bankers and locked – he had his butler lock them in the library.

46:08And so I'm not letting you out. This all reminds me of Hank Paulson locking the banks in in 2008 and forcing them to take$20 billion each from the government. Well, right. But we all have the same model, which was the panic of 1907. I mean, you're exactly right. But I'm sure Paulson knows about 1907, and we certainly did. But the point – and by the way, that's what happened in LTCM at the Fed. We don't have time for all the vignettes, but Bear Stearns was the outlier there. And Lehman as well, right? Yeah. Well, Lehman was always the weak link. But he couldn't put up the$250 million. The deal was 16 banks,$250 million each,$4 billion, all cash, done.

46:53No due diligence, by the way. This was all done in 72 hours. Lehman said, we can't do$250 million. We'll do$100 million. And OK. I mean, Lehman was always the weak link. Always the weak link. It was no surprise what happened in 2008. But and then Bear Stearns said, no, we're not in. And then so Goldman City and Solomon, sorry, Solomon was City at the time. And then Morgan Stanley stepped up. They put more than their share. We got to$3.6 billion and we got the deal done. But yeah, you're right. Lehman was a weak link. I can tell you that when Bear Stearns failed in 2009, sorry, 2008, no tears were shed.

47:36because everyone remembered how they stabbed Wall Street in the back in 1998. But just to kind of finish up with 1907, so he had his butler, locked him in the library, said, I'm not letting you out until you have a plan. They stayed up all night. They did. They came out, and they implemented the plan. It was on exactly the lines I described. And that was the origin of the Fed, because the other bankers looked at each other and said, okay, that was a close call, but Pierpont's not going to live forever, and who's going to do it the next time? We have no idea. So we need a lender of last resort, in effect, backed by the U.S.

48:11government. And it took six years until 1913. But they got it done. The last rank was Woodrow Wilson got elected. They were counting on Taft to sign the legislation, but Wilson went along. I love Wilson. He gave us the income tax, the Federal Reserve, and World War I. And he was a proto-fascist. Mussolini, he sort of ridiculed as a buffoon, He was actually a very good writer and a pretty good left-wing intellectual. He said that Wilson was our prototype. And we were launching fascism in Italy in the early 1920s. We looked at Woodrow Wilson and the War Protection Board, and he nationalized all the industries and the railroads.

48:52Fascism is not totalitarianism. It's a partnership of the government and the big corporations. They're working together. That's what fascism really is. And what does that mean? And like, separate that from socialism, because they're closely related, I feel. People don't understand how close fascism and socialism are in terms of definition. Well, socialism is a euphemism for communism, but socialism, trending towards communism, means there is no private sector. Everything's nationalized. Everything's a state sector, and so it's top down. Fascism is different. Fascism, you can have a corporation.

49:29You can have private ownership. but you're going to be under the thumb of the government and the CEOs and the government ministers are going to work together to implement the plan. Now behind that, I guess, is the threat that if you're not with the program, maybe something bad will happen to you. I'm not saying it's a, it's all sweetness and light, but it is a corporate government combination, you know, consortium, whatever you want to call it, at least in the economic front, the political aspects, you know, there's not, not too much free speech and, and, uh, and it gets worse, but, uh, in the economic sense, fascism is best understood as corporations and government working hand in hand, not too different from what we have in the United States today.

50:11Um, with, right. Like what's an example that tells you, oh, this is a fascist arrangement. Facebook, uh, Google, uh, look what happened in, uh, in 2020 during the, uh, the, during COVID. Now I, I wrote a book on the, on the, the pandemic. It was an economic book. That's my lane. It was called The New Great Depression. But half of that book was about the pandemic. Now, here's the thing, James. That book was published in January 2021. But there were all kinds of bottlenecks, believe it or not, in the publishing business. They couldn't get ink, paper, boxes. Literally, there were delays in 2020. It was an election year, so my book was not an election book, so I got bumped a little bit.

50:54But that book was written. I was done writing in the summer of 2020. And I talked about D.A. Henderson, not a household name, but D.A. Henderson is a single individual credited with eradicating smallpox on the planet Earth. Of course, it was a team and, you know, lots of agencies. But he's the guy, greatest immunologist since Louis Pasteur. He won the Presidential Medal of Freedom. He was later dean of the Bloomberg Johns Hopkins School of Public Health. So again, no finer immunologist. He wrote a paper in 2006 because if you recall, there was an avian flu going around in 2005 and George W. Bush was very concerned about it.

51:38So he kind of mobilized academic and medical resources. So what are we going to do about this avian flu? Again, it was small beer compared to COVID. But Henderson wrote a paper published in 2006 with some colleagues, and he said categorically, lockdowns do not work. They don't work. And here's why. And he kind of went on to explain that both in terms of epidemiology and sociology and human behavior, you can't basically keep people locked in their rooms for long. My point is, in 2020, Fauci, who I hope they keep a cell warm for him because that's where he belongs in my view. Fauci locked down the U.S.

52:21economy. And I fault Trump for letting him do it. I mean, I'm not holding Trump to the standard of D.A. Henderson, but I would have fired Fauci after the first meeting. But Fauci locked down the economy. Now, here's my point. We had research from the number one guy in 2006 that said lockdowns don't work. Why did we lock down the economy in 2020? Well, the answer is, and I've been to Wuhan, That virus came out of the Wuhan Institute of Virology. It was a bioweapons program by the Chinese, and it was financed by the United States. Fauci put up the money through Peter Danzig and the Echo Health Alliance, and that money went to Xi Lin-Zhi, better known as the Batwoman of Wuhan, and that's what they were doing.

53:03The idea that the Wuhan Institute of Virology happened to be a block from where the outbreak started, but one had nothing to do with the other. It was a wet market in the pangolin. I mean, give me a break. That was another CIA kind of promoted narrative. But my point being, in the book, I said the vaccines won't work. By the way, I was quoting Jay Bhattacharya. He was the Stanford – he's an MD and a PhD. He's on the faculty of Stanford and the medical school. He's not a nobody. But he was saying the same thing. And he said SARS-CoV-2, which was the COVID virus, was the fifth coronavirus. The first one being the cold, by the way.

53:50Do you have a cure for the cold? I don't. We get them, and they're annoying, but they're just endemic. And he said, it's extremely unlikely we'll ever have a vaccine for this because we failed in all the other coronaviruses. And I quoted that in the book. I said, there won't be a vaccine. And then, of course, Jared Kushner and the McKinsey gang, keep those guys away from power, but Kushner and his McKinsey cronies and Pfizer and Moderna, which had never had a successful product prior to this, came out with a vaccine. And so I got a certain amount of ridicule. It's, you know, authors of occupational hazard that say, Jim, you said there would never be a vaccine.

54:32Here's a vaccine. No, it's not a vaccine. It's an experimental gene modification therapy. uh it appears to mitigate extreme symptoms in people over 60 with comorbidities including uh obesity diabetes asthma uh copd etc okay you know it's like a couple aspirin help with the hangover but it was not a vaccine it didn't stop the spread by the way and i've done thousands of interviews the only time i ever had my mic pulled on live air i was doing an interview kind of like we're doing right now. It was a radio announcer on a popular talk radio show in Seattle, of course, Seattle, right? And I wasn't even talking about the pandemic.

55:18We were talking about my last book, Sold Out. But somehow we got on this topic and I said something like, you know, of course, the vaccines don't work. Wait a second. Did you just say the vaccines don't work? I said, yeah. I said, what's your source for that? I said, Johns Hopkins University the dashboard shows that 5 million Americans who were double vaxxed and boosted got COVID in December, 2022. Well, what about just common sense? Like after the vaccine came out, everyone still kept getting COVID. Like vaccines are not supposed to work like that. Well, that's my point. But even just personal anecdotes, like my kids, I never got vaccinated.

56:01And by the way, the problem with calling it a vaccine is that everybody who didn't want to get vaccinated was suddenly considered anti-vax. I am not, I am strongly pro-vax, but I was anti the COVID vaccine because people kept saying, oh, you still might get it. It's just, I didn't really understand what people were saying. I got a polio vaccination when I was five years old. I still got the little circular scar on my shoulder. Yeah, same thing. It's not a vaccine. That's really the point. But you're right, James. There's tons of anecdotal evidence, tons of research since, but I was getting called out on live air And I said, five million Americans, double vax boosted, got COVID in December 2022.

56:41Tell me that vaccine works. And the host goes, pull the mic, pull the mic. They did. They pulled the mic and kicked me off the air. It's always something, but that's Seattle for you. No, but is this an example of fascism in the sense that they were told by the government, hey, we got to keep this message consistent or else? Correct. And that's right. And take it a step further. So what happens if you are Jay Bhattacharya, or I was just trying to plug a book or whatever, or anybody, people with a lot more credentials than I have were talking about this on Facebook or Twitter at the time, now X, of course, or Google or any of those other channels.

57:21You got deplatformed. You got canceled. At best, you got deranked. So good luck. You've got to scroll through 20 pages of Google search results to find your paper if it was even there. and you were accused of disinformation, disinformation, et cetera. Well, guess what? I mean, yeah, that's all bad enough. We kind of know that. But the White House and Google and the White House and Facebook were talking on a daily basis, and Twitter was worse with Jack Dorsey. They had former government officials inside. I believe the general counsel of the FBI had become general counsel of, I believe it was Facebook.

57:59But the point being— I think Twitter. I think Twitter had its own weekly meetings of their FBI employees just to discuss stuff. Absolutely right. And it's all documented. This is not conspiracy theory. That's the other thing. You get accused of conspiracy theory. It's like, no, they're the facts. Look it up. So the White House was calling the shots. And there were times when Facebook might not deplatform you as fast as you want. And there were people in the government, White House, Health and Human Services, National Institutes for Health, calling Facebook's, hey, get on it. Come on, you didn't de-platform this guy.

58:35That's fascism. I mean, quite apart from the pandemic, First Amendment, a lot of other issues, that's fascism. It's corporate and the government holding hands. Do you think fascism has gotten, like, we notice it more now because of basically consumer-facing things like Facebook and Twitter, but you look back to like the 50s and 60s where CIA employees were regularly also executives at quote-unquote executives at RCA or, you know, there was various companies that were kind of linked to the CIA so you could send employees abroad and do things without being an official employee of the CIA. Absolutely.

59:12I mean, the CIA had a name for it. They call it the Muddy Wurlitzer. And if you know what a Wurlitzer is, it's an organ, but there's a big organ at Radio City Music Hall. I haven't been there lately. I guess it's still there. But Frank Wisner, who was the director of operations this year. He was not the head of the CIA. It was Alan Dulles at the time. But he was the director of operations. So anything, you know, overthrowing governments, you know, manipulating public opinion, whatever it was. He called it the mighty world. So he said, we play the tune and you dance to our tune. What they needed to do was control the means of communication.

59:48And there were far fewer at the time. So it was easier to do, whether it was, you know, Radio Free Europe, but also the networks and all kinds of, they call them PSYOPs, that's short for psychological operations. There was a guy, Cord Meyer, brilliant guy. That was his job. I mean, there were other guys, you know, Des Fitzgerald and Tracy Barnes. They were like blowing things up and taking over Laos. And, you know, they were in Saigon and fighting communists in Poland. There were a lot of operations, overthrowing the government in Guatemala and Iran. That was Kermit Roosevelt. Yeah, that was all going on.

1:00:27But there was a major effort to control communication, control discourse. It was a group of people called the Georgetown Set. Who were they? Well, it was people we just mentioned, the top CIA people, but also, you know, it was Stuart and Joseph Alsop, who was, you know, compromised in a, I don't know, to say a male honey trap in Russia. that the KGB had that on tape, et cetera. But, and then of course there were real communists, Alger Hiss and others. Harry Dexter White, Harry Dexter White was the chief U.S. delegate at Bretton Woods. It was 1944, a little earlier. The CIA didn't come along until 46, a little earlier than the period we're talking about.

1:01:13But John Maynard Keynes represent the U.K. Harry Dexter White represent the U.S. um morgan thaw was the henry morgan thaw was secretary of the treasury at the time 44 countries you know etc but it really came down to white and canes because the u.s and uk were going to call the shots harry dexter white was a stalinist agent he was working for stalin and this was documented by ben steel in his book uh the battle of breton woods but it all came out with the venona cables that were released by the kgb in the 1990s this was not widely known some people knew it at the time but it wasn't widely known but by the 90s the research had been done ben still did a great job on that book um but uh so the chief negotiator for the u.s at breton woods was a stalinist agent and his mission was to destroy the british empire mission accomplished i mean he did it you know decolonization took off sterling was uh was unimportant the uk didn't have enough gold to redeem its obligations and gold, et cetera.

1:02:16And we did, in effect, dismantle the British Empire through decolonization and financial warfare. But you're right. I mean, I was, without getting into too much detail, I was asked by the CIA once, could you figure out a way to destabilize a particular government? I won't mention the name. But financially, we're not going to bomb them or anything like that. So I took some time. It was relatively easy. And I wrote up a plan and I gave it back to them. But it's often a one-way street. You tell them stuff and they don't tell you anything. But six months later, I ran into one of my points of contact.

1:02:54I said, what happened to that plan? I gave him just curious. And he said, oh, they never did it. And I said, why? And he said, they thought it might work. And I said, oh, so you're just kind of messing with them. You didn't really want to overthrow the government. You were just kind of trying to give them a hard time. But my point is, yeah, it goes on all the time. You know, circling it back to today's day and age, we have now a new political regime that was just elected, obviously, with Trump winning. And can he really clean things up? It seems like this time, as opposed to 2017, he has a lot more experience, a lot more knowledge.

1:03:30Can he sort of, quote unquote, drain the swamp? Can Elon Musk go in, Ron Paul go in, Donald Trump go in? And can they say, OK, this department's no longer useful. well, these bureaucrats are just idiots. We're just going to clean house and make everybody non-fascist again. The answer is potentially yes. And I'm mildly encouraged, but I'm also extremely wary. And I'll be specific about that. Trump was elected in 2016. He goes in in 2017. Trump never drained the swamp because Trump couldn't find the swamp. He didn't know what the swamp was, number one, where to find it. He does now, but I can talk more about that.

1:04:12But also, he came in, and we knew he was a businessman, a celebrity, and a TV guy and all this stuff, a real estate developer, didn't have political experience. Okay, that's okay. I mean, you can get it if you get the right people. And he started out with a good crew. He had Steve Bannon, KT McFarlane, and a few others. They were all gone within six months, General Flynn and others. They were all gone. Who replaced them? a bunch of backstabbers, you know, Rex Tillerson, H.R. McMaster, John Bolton, James Mattis. And there was this theme at the time, John Kelly, who was the chief of staff. There was a theme at the time that this was the adult supervision.

1:04:52Trump was like a big, overgrown child, like a baby in a crib throwing rattles. He happened to be the president, but we were going to encase him. We're going to surround him with the adult supervision. and it was all the people I just mentioned, and they were going to keep the train running on time. It turned out that they were just part of the unit party, part of the elite, part of the fascist or near-fascist structure we just discussed. It didn't matter if they were Democrats or Republicans, happened to be Republicans, but they were among the warmongers. And then Trump made a lot of big mistakes.

1:05:28First of all, he picked all those people, right? So let's not give Trump a pass. he hired John Kelly. Trump hired Christopher Wray. I think Christopher Wray is a neo-fascist, corrupt director of the FBI. And, you know, breaking down doors from Mar-a-Lago to Roger Stone to, you know, Peter Navarro is a 73-year-old Harvard PhD economist, strong views, but, you know, well-behaved, mild-mannered. He was arrested in broad daylight in National Airport. They put Leg irons, shackles on him, handcuffs and leg irons, frog marched him out of National Airport in public view with reporters standing by. Again, 73-year-old.

1:06:12Well, why did they do that? I don't even know that. That's what they did. Now, by the way, as a lawyer, without mentioning names, I've been in situations where, you know, this guy, O.J. Spitzer, called up once and said, we're arresting three or four of your guys tomorrow. Do you want us to just grab them, or you want to come down and surrender? And we said, hold on, we'll be right there. And I got my super lawyer litigated. We went down and worked it out. No arrests were ever made. But in a civilized world, even if you're facing criminal charges, unless you're flight risk or something, not P. Diddy or whatever, you can come in and surrender.

1:06:50They don't handcuff you and frog march you out of National Airport. They did it on purpose to humiliate them. And as they say in France, as an example to the rest, Um, but why did he do? He, he defied a subpoena from the January 6th, uh, committee on grounds of executive privilege. And Steve Bannon did the same thing. Steve Bannon, they got these J the J six committees, the Liz Cheney show trial. Uh, they, they were subpoenaed, but they had worked in the, in the, in the white house. Uh, Narao was there the whole first term. Bannon was there at the beginning. Um, you got kind of pushed out by, uh, by Kelly or whatever, but, uh, they had executive privilege, which is a well-established judicial principle.

1:07:35It's a big issue in the Nixon case. And they asserted executive privilege. But instead of litigating that, I mean, it isn't litigation, but it takes a while to get to the Supreme Court. But they were tried, convicted, and they both served four months in prison. Navarro got out around June, if I'm not mistaken. Steve Bannon went in in June. He was released at the end of October. He's back, you know, back in, you know, an activist and kind of leader of the MAGA movement, has his own podcast, Steve Bannon's War Room. Very, very successful. But the point is, Eric Holder did the same thing. Eric Holder, Attorney General under Obama, defied a congressional subpoena.

1:08:13He was held in contempt of Congress, and a criminal referral was made, but nothing happened. So Eric Holder does it, nothing happens, but Trump associates do it and they end up in jail. And by the way, if you get a four-month sentence, beginning around the end of two months, your lawyers can go and say, good behavior, whatever, won't happen again, whatever the deal is, and they'll let you out, they'll give you an early release. They did not give either one of those guys an early release because they wanted to shut Bannon down. They didn't, but they wanted to shut him down during the part of the campaign and he was off the air for those four months.

1:08:50He's back on now. but um but my point being these are all examples of uh of uh fascism and running over the rule of law um you know and so well now with this experience do you think trump or whoever he brings in and people forget it's not just that you elect trump you elect the 5 000 people he's gonna appoint and you're you're electing a new government and and what will he now know enough where the skeletons are buried, so to speak, to really start cleaning things up? I think he does. And I'm in touch with, you know, I'm not in any official capacity whatsoever, just to make that clear, but I'm in touch with enough people around him to know what they're doing.

1:09:31There's something, I'm sure you've heard of it, it's called the Plum Book. And it's a government publication, you can get it from the government printing office, and it comes out every four years right after a presidential election. So the new Plum Book will come out in days, but the old one's still around, the one from four years ago. It's basically the Yellow Pages. It lists 8 ,000 government jobs, title, office, location, phone number, pay scale, et cetera, all government jobs. But what's special about it is these are the 8 ,000 jobs where the president can pick anybody he wants. They're not protected by civil service.

1:10:08There might be some Senate confirmations required for some. that there are, but this is the list that the president can go down. Now, when Obama came in, and really Valerie Jarrett was the branch of the operation, they had all of them filled in. Maybe not all 8 ,000, but they had thousands of names vetted, seasoned, ready to go. And when they got in power, they said, okay, everyone focused on the cabinet. Yeah, cabinet's a big deal. But say you're secretary of the treasury. Okay, that's nice. There are two deputy secretaries, one for international, one for domestic. There are numerous assistant secretaries.

1:10:44My friend, Dave Mullins, was assistant secretary for federal finance. They're deputy assistant secretaries, so-called DAS. They all have assistants, and the assistants have assistants, and not just the Treasury, but the State Department, Defense Department, on and on and on. The agencies, the CIA, the FBI, the SEC, CFTC, Federal Trade Commission, on and on, you get it. And that's where these 8 ,000 jobs come from. Trump didn't even know about the Plum Book. And Trump picked Chris Christie as the head of his transition. Chris Christie, as a prosecutor, put Jared Kushner's father in jail. Now, and he's married to your daughter, right?

1:11:24So Jared Kushner's married to Ivanka Trump. Christie's the head of transition, but Christie put Jared's father in jail. How's that going to work out? You know, this is what I'm saying, that Trump is completely— I wonder why Ivanka didn't – how come Ivanka didn't protest that in 2016? I don't know. I met her once very nicely, very smart, working grad. She's very nice to me, but I don't have a good answer for that. But I do know this, that the transition today is much more rigorous. There's a whole transition team. They've been working on it. You probably know Howard Lutnick, Linda McMahon. I have some funny stories about her.

1:12:01But Howard and Linda are the co-heads of the transition team. but Tulsi Gabbard and RFK Jr. are on that team. They're in those meetings. They've been working on this for months. They've solicited resumes either through the Heritage Foundation or I believe America First. I've met a number of them. I was at a dinner in Washington at CPAC, and our host, a very gregarious guy, just went around the room. He pointed at Mike Adams and said, there's our next attorney general. He pointed at Monica Crowley. He said, there's our next secretary of the treasury. Carrie Lake was sitting across from me. He goes, there's our next vice president.

1:12:43She ran for senator. Those people may or may not get those offices. And some of them are, well, I would say all of them are great. But my point is they're ready. And they have the plumb book and they've been working on it. So I do expect they'll drain the swamp now. General Flynn made a point. And I think it's a good one. He said, you got to fire these people on day one. You got 48 hours to fire them. You basically fire them, pull their security clearance, take their badges, tell them, go home. We'll mail you your stuff. Don't bother coming into the office. We changed the locks and you're out.

1:13:19Thank you for your service. That's what you have to do. If you let any of these people continue, I mean, the resistance is real. They're going to sabotage you from day one. That is what they did in 2016. They're trying to prevent it now. We'll see how they do. But I am encouraged that, A, they're aware of the problem. B, they have the resources to deal with it. Whether they follow through on that, we'll find out in the next 60 days.

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