Iran War Expected to Spark Global Energy Crisis. Here’s What Americans Can Expect at the Pump.

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36:34They should have the entire country's support. To learn more about this good cause, find resources for yourself or a loved one or help support the mission. Visit Hunter7.org today. That's Hunter7.org. Chris Martinson deals in reality full time. He is a reality-based energy researcher, one of the most respected in this country, one of the most honest. And we are grateful to have him join us now to give us an overview of where exactly we are. Chris, thanks so much for doing this. I got a little excited there, and I wonder if you think I overstated the case. You have much more knowledge on the subject than I ever will.

37:14Well, Tucker, thanks so much for the opportunity to come here. And yeah, this is my passion. It's my mission, because if anything, you understated it. Energy is life. Energy is our economy. The path we're on is headed for complete disaster at this point in time. And the people who are driving us there, as you hinted at, not my first rodeo. I've seen these people in operation, what they did to Libya, what they done to the Middle East generally. They don't do consequences. and unfortunately this is reality we're talking about and you've been talking about the markets and there's these narratives that they push and if they can just pretend for a little bit longer it'll all sort of sort itself out but this is different these are molecules this is physics this is very simple stuff exactly exactly it but it's all you know physical reality is so unfashionable it's so well it's so unfashionable you got transgenderism but it's i think since the invention of the internet people just imagine that things happen electricity is created dams are built you know the world just sort of moves supply chains organically organize themselves or whatever like they have no sense of how things actually work so you do what does this mean for the life of americans and europeans well it unfortunately it means the same thing it kind of always means they're going to have these people who are going to accidentally wreck some stuff uh and energy costs will go through the roof.

38:36And then it's going to be the poor people, the poor countries are going to, you know, have the worst run of that as they start out. But we're looking at something here that could very easily upend our economy in a big, big way. So you mentioned in your intro, there's a sort of straight line relationship between how much energy an economy uses and how big it ends up being, you know, it's like a straight line on this chart. Yes. And that's a really powerful chart because we've all grown up in an age of amazing energy abundance. I'm absolutely thrilled with it. I'm a conservative. I would love for us to keep this prosperity we have, but I fear that the people who are making decisions, they've lost that grounding.

39:12They don't understand that. I don't know. They're like three generations from anybody who had dirt under their fingernails, right? It's been too long. So once we get grounded back in that though, here's a simple thing. The world was consuming just oil, just crude oil. That's the tasty stuff. We turned that into jet fuel, diesel, kerosene, and deck gasoline. And so that we were burning about 80, consuming burning 86 million barrels a day before the war started. And now we're missing for sure about 12 that's just missing, missing because they did some workarounds here and there. Well, the question is, when was the last time the world globe was burning 12 million barrels a day less?

39:49That brings us to 74. So we go on our little chart and we look back. We find out that number is 2011. 2011, the world was burning 74 million barrels a day. Problem. The world's economy was 36 % smaller back then. And so this is what I work really hard at is because I do what I call put on my energy goggles. And it means when I go out, I don't just see a maddening, infuriating traffic jam. I just see energy. I see people burning oil, like gasoline. I see cars that took oil and diesel to manufacture them i see jets flying i see bridges that need to be repaired and all this is just energy right and it just sort of makes sense right so the economy requires people to do things like we all have to do some work even if we have a service job we're still doing work well work requires energy and so therefore the economy requires energy we can just put those pieces together and so when you have less energy flowing through an economy by definition it starts to skinny down it gets simpler um which is a euphemism for it craters and so we're actually risking the cratering of the world economy trump saying oh we're insulated i know we broke that stuff over there but we'll be fine over here i just how's that gonna play in you know diplomatic circles as it goes on i mean we've we're about to unleash we the united states with israel we're about to unleash the worst catastrophe on economies financial markets and potentially because of the impact on fertilizers and other stuff maybe even food maybe even famines things like that this is what's at risk and i wish we were having serious conversations not hegseth jokingly saying we don't even need a straight it's so cartoonish i i don't even know how to form words sometimes so let let's just um assess specifically what that would mean for the u.s like you often hear the president but not just the president politicians going back at least 10 years say this country is energy independent it's a net exporter of oil so if the country's a net exporter of oil what is is that true i don't think it is true but i'll defer to you and what does that mean does it mean we can set the price of oil like why is that relevant will you explain the system for people who might be confused yeah this this detail is important so um when i was growing up uh petroleum and oil were synonyms you could use them interchangeably and nobody would get confused.

42:13And there's just like, remember under COVID, suddenly the CDC lost the thread on what's herd immunity or a vaccine. Yes. They started changing definitions. So sometime about 10, 12 years ago, our DOE Energy Information Administration decided, you know what? We're just going to change the definition here a little bit. We're going to call petroleum anything that comes out of the ground that you can set on fire, right? So oil is the thing we really care about. Now, because we're doing all this shale oil drilling, very exciting, and doing all this shale gas extraction, we have a lot of this stuff called natural gas liquids.

42:44Okay, that's propane, works great in my grill. I love it. Butane, it's good in the lighter. Ethane, turns into plastics, all that. But they lumped all that together and said, oh, when you put all of this stuff in one pile on a net basis, we're an exporter. Problem, these aren't fungible. You don't decide one day I'm going to put gasoline in my car or maybe I'll put butane in my car, right? They're just not, they don't have very different purposes. those natural gas liquids they're industrial we use them they're fantastic they're industrial we have way too many of them we export a ton of them because we can't use them fine we're still a net importer of crude oil and even more to the point we get all this stuff out of the shale basins right you got the permian you know you got places like the bakken in north dakota so that stuff that comes out is really light and it's really sweet and it doesn't go into our refinery so we package that up in ships and we send a good chunk of that away.

43:35And then we import heavier stuff from Canada, from Venezuela, but also the world. And so to your point, this idea that we'll just insulate ourselves from the world is untrue. Whatever we're paying for jet fuel here has a big relationship to what they're paying for jet fuel in Europe because it's open to the highest bidder. And if it's worth it to put it on a ship and sell it to Europe, that's exactly what's going to happen unless we do something really catastrophic, which is, you know, close down our borders to exports That would be a bad idea for a country with a hundred billion dollars last month trade deficit.

44:07Cause we're like, nah, we're going to keep all our good stuff. We're going to send you our, our treasuries. You know, we're good. You know, it's going to be a terrible idea. What would happen if we did that? I mean, there, at some point there will be pressure because the public has been told for a generation that we have an abundance of petroleum. As you said, the definition is not what they thought it was, but you know, we're, we're an exporter. So people are going to say, well, it's eight dollars for a gallon of unleaded. Why are we selling this abroad? Why can't we just keep it here? So if politicians decided, OK, we're going to do that, we're going to stop petroleum exports, what would that mean?

44:47Well, first off, you have a heck of a legal battle on your hands because that would sort of break the fundamental contract that we have with how business operates. Second, we have legitimate contracts for LNG, for other petroleum products, things like that, that would have to get broken. But more to the point, it would isolate us really badly in a time when we need this, at least the appearance, if not the reality of free trade happening, where things go freely across our borders to take one portion of that and shut it down. um i think would be as damaging as when in uh was a february 2022 when the united states treasury under biden decided to freeze russia's sovereign assets reserves they're neither sovereign nor reserves under that scenario um and that kicked off a whole lot of things where people started walking away from the dollar we started to see the treasuries weren't getting bid gold started to spike there are real consequences to actions like that um and so i just think that would be it would be very destabilizing would be the kindest term i could put here so that's not likely to happen you think hope not home ownership has always been at the center of the american dream it is an actual asset a place people work their entire lives to build a place of stability and security and real value right now though too many homeowners are stuck swiping credit cards to cover groceries there's basically a survival tax of 20 interest or more so why keep handing your money to the banks when you could keep it for your family.

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46:48If you want out, call 800-685-5696. 800-685-5696 or visit AmericanFinancing.net slash Tucker. How high could gas get? You know, I get asked this a lot. So there's a little thought experiment. So imagine like, you know, I've got a, I've got a Nissan Pathfinder. It's totally dry. I put a gallon of gas in there and then I drive it until it runs out. And then I have to turn around and push it home. Question, how much is that worth? Cause I'm about 22 miles away from home. Probably take me, I don't know, three weeks to do that. So people will pay a lot for gasoline. People will pay a lot for diesel.

47:29It could easily get to three,$400 a barrel. And people who are riding little scooters, you know, all over Bangkok, they're still going to be paying that because they're using it so efficiently in their in their markets but it's worth every penny of that i have a farm i have a tractor you know i'm hay baling i would really rather not go back to hand hay baling i would pay a lot personally for a gallon so the question is what's it worth it's severely underpriced at this point in time in terms of its actual worth that's okay we've had a lot of it got a little lazy with the whole thing but um you know could we would people pay 200 easy a barrel 300 easy 400 yes absolutely what would that mean for gasoline and diesel prices like how would that be reflected at the pump the fabled pump the pump well you know this is interesting because we have the quoted price of oil the futures price right 85 rightish now for wti bb 95 for brent um but on the other end of that i don't put oil in my car i put gasoline in my car so the question is after it goes to the refiner how much of those products worth right now okay so if you in rotterdam this morning wanted to buy a barrel of jet fuel you had to pay 158 dollars if you want to buy a barrel of diesel same market about 148 dollars so that's what it's actually selling for well what's the point of having a brent market wti west texas what what's the point of those numbers if they don't correspond to reality it's a narrative control it's really i think that's what we're down to at this point in time so i've been watching markets for a long time um and i used to trade futures and my specialty was gold also silver and i didn't dabble in oil all that much but they all operate kind of the same and so the futures market were this awesome invention that allows speculators to really be very dominant in setting the price for things not discovering the price i'm using this terminology you careful they set the prices for things so right now on a daily basis in the oil market you're a producer i'm a consumer you're an oil company i'm a refinery right that would be the actual price discovery mechanism we come to some agreement um that would be a one-to-one relationship however on top of that we've allowed because our regulators fell asleep at the wheel we've allowed the speculators in that story to become 50 times larger on a signal basis than the actual deal that happens on at the bottom so when you have a 50 to 1 margin it's the paper that's setting the price up there right now and we've watched this for years 130 in the morning and this is happening with oil now constantly 130 2 o 'clock in the morning when there's almost no trading happening everybody's asleep and all of a sudden somebody will come in and i've seen this several times now and suddenly sell a million and a half barrels of oil in a single one minute window and it just crushes the price and they do this over and over again and then of course you have all these algos and they're mostly momentum.

50:22A lot of them are momentum algos. And so they're like, oh, look, prices are falling. So they pile on and you get the whole sort of herd moving in a direction. And it's just completely fake. It's been this way for a while. And I think it's because, I mean, you've probably seen the same clips, right? Trump comes out. He's like, oh, people told me oil is going to be 300. It's only 70. And the stock market's up. Those are really important narrative moments for him to be able to say, look, I did this thing and markets approve of it. If they didn't stocks wouldn't be so high and oil wouldn't be so low right i think that's the point of this stuff it's political narrative shaping right now so it's lying because the price of something is the point at which the transaction occurs what's it worth what will you pay for it i mean that that's that's what a market i mean correct me i'm not the economist here you are but like right so if if i say the price of something is five dollars but nobody would buy it for five dollars it's not worth five this is so nuts it's just not real at all it's a lie so why isn't there an effort among policymakers or even the media to discover and publicize the price of oil the price of oil is what people are buying it for i yeah it's a big big mystery so here here's the thing you mentioned the most important thing there's like if you get take economics there's one chart they call it the pq chart price supply demand right there's a curve you can point to it that's how it's supposed to work um right now we're holding the price lower than actual supplies right so what's happening is demand is too high and so we're burning through our stockpiles right now and if you want to see something alarming just look at the actual amount of uh crude oil we have stored in the united states that would be the spr plus commercial inventories or we could look at how much diesel do we have in tanks kicking around Hey, or how much gasoline do we have in tanks?

52:15And all of these are just powering low. Now, why is that? Because the price is too low. The only way you can get price, you know, supply and demand matched again is you have to use prices. So prices rise enough. People decide I'm not going to drive my car today. We'll take a lesser vacation, whatever. That's how this thing sorts itself out. alternatively, and I'm really worried about this in a post-COVID CISA telling us who's essential and not environment, that we're just going to run this down, Tucker, until we get to scary minimums. And then we're going to have government rationing temps. They're going to try and decide who gets it.

52:50You're not important. You are. Imagine that amongst California Democrats. That'll be amazing. But I think this is where this is going, is we're actually just going to sail into absolute minimum and then the crisis comes out and i'm starting to wonder if that hasn't been the point all along flesh that out so the point of this destroying global energy supplies and capacity including refining the point of that i mean clearly there's a point the united states is fighting a war against russia aimed at russia's energy sector and the united states is doing that the trump administration is fighting a war against Russia, against Russia's energy sector, and knowing what it's doing.

53:34And then it started this war, knowing what would happen, that the LNG ports in Qatar would be hit, et cetera, et cetera, et cetera. So like, you think the US government, the Trump administration wants rationing? Maybe that, I'm not sure if that's the ultimate end goal, but so February 28th, we conduct this, you know, decapitation strike, right? kill kill iran's version of the pope and that's how i was going to work out right so we do that on the 2nd of march is when ukraine with some help obviously started really dialing in on russian refineries and oil depots and this is very poorly reported i feel in our country but you know it's all over twitter and other places but you can see and they were very effective they were blowing up all kinds of refineries and big black smoky things they had even like struck right downtown in Moscow and took out their main refinery.

54:25And as of three days ago, every single major refinery in Russia had been attacked at least once. None had been missed. And this is very effective. And some of them were 1500 miles all the way inland. And that's not something Ukraine could do all its own because Russia has mobile air defense units. And so you have to thread all these needles to get your little buzzy drones all the way over there. But they, you know, they're getting that targeting information. And so all that's going on. And then also poorly reported probably the single greatest loss of merchant marine vessels in the sea of azov in the black sea because of drone attacks by ukraine on russian shipping any kind of ships ferries little merchant barges you know oil tankers whatever if it's a ship it's it's getting hit and um and then of late we've really stepped it up because uh russia has the their version of amazon's called wild berries and they have these huge distribution warehouses and they have six massive distribution warehouses.

55:19Oops. Now they have four because four of them have been completely attacked. This is an economic attack. And of course, the scary part with this is that Russia just, I don't know, what was a few months ago, they, they, um, they revamped their nuclear doctrine to say, you know, it used to be, uh, uh, we would only respond if attacked with nukes, but we're widening that to say we can use them if we're facing an existential threat. and the thing that drives me nuts is as we're poking the bear nobody's bothered to come out and explain to me what's the upside here what do we get out of this what's the point of what's why are we do why is the trump administration doing this they told us they were going to end the war they told me they were going to end the war and the cia is providing an nsa are providing targeting to warehouses and refineries like i don't know like what is the what is the point i don't know the answer do you know it seems to be to provoke a reaction i'm just having you know i just got to speculate like anybody but i know it's dangerous i know that if those things were happening to us we would respond pretty vigorously muscularly i bet so it feels that feels dangerous but it's just the timing of it that a the strait gets closed down straight up removes b russia really starts to get dialed up now c we've pushed it all the way to the point that the bobble and deb straight and they're on the red sea is now closed and so you said it before i don't i no longer trust a thing anybody says what are they doing so they've said oh we've tried to get this memorandum of understanding which is an understanding about how you're going to get to an understanding it's not even a thing but you know and we couldn't even abide by that right and so what are we doing everything we've been doing is to further inflame this war get caught in a little bit deeper trump has been talking about you know escalating constantly at this point in time oh if you strike a ship we'll blow up a plant right um and and uh so the actions are they're trying to keep it closed and here's the part that i'm worried about is i don't think they i think they know not what they do i don't think they understand the relationship between how an economy is undergirded by energy i think they just think it's all intangible it's all it's all narratives right i truly feel like there's people who live in a world of reality oh yes and then there are these abstractionists and they lived in an abstract world.

57:32Yeah. Yeah. And so what happens if we push down that abstract world? Well, you know, as Anne Rand said, you can ignore reality, but you can't ignore the consequences of ignoring reality. And, you know, I almost have to have a little chuckle because it's really dark. Like, like what they're doing, if I could communicate to people clearly is they are risking everything, everything that we hold dear about our way of life, about the ease of our lives, about the jobs we do, where the future is going, what we tell our children. And we're not having really any serious conversations outside of, say, this podcast and others like it.

58:09So is the world getting more stable or less stable? That's a rhetorical question. We're not in charge of the world, unfortunately, but you are in charge of, in fact, responsible for your own family and your savings. So the dollar has lost nearly a third of its purchasing power since 2020. That's crazy. The dollar has lost nearly a third of its purchasing power in six years. You know what hasn't? Gold. Gold has been a trusted store of value for thousands of years. And that's one reason you should think about gold right now. It's about 25 % below its high from earlier this year, which is amazing.

58:45Some of the world's biggest financial institutions are making the move because gold relative to its power and endurance as a medium of exchange is It's pretty cheap right now. Central banks are reducing their reliance on treasuries and increasing their holdings of, yes, gold. They're not alone. Individual investors are doing the same. Ray Dalio, founder of the world's largest hedge fund and a friend of ours, recommends holding up to 15 % of your portfolio in gold. We've long believed in gold. We've been vindicated. we started battalion metals to give americans an honest fair priced way to buy metals gold and silver because a lot of these companies are scams ours is not you know we have like three points over spot we'll ship it to your house battalion metals.com slash tucker is the place to go to learn more about buying metals gold and silver precious metals iras secure storage all of it battalionmetals.com slash tucker i don't think there are any i don't i don't think there are any and people throw this stuff out unchallenged no actually we're gonna we have venezuelan oil now so we have more than enough oil and by the way if you wouldn't mind explaining why that probably isn't true what does that mean when they tell us that we now have all of venezuela's oil so we don't need oil from the persian gulf yeah so oil is uh oil's not saying like water water's kind of water maybe salt water and fresh water so we understand those are different well oil has like 900 different flavors right yes and the venezuela has a lot of oil but it's you're gonna use the little quotation marks in the air oil uh and the reason for that is that um they have two fields they have the mary field which we're currently drawing from it's nice it's very heavy it's sour which means it has sulfur in it actually sulfur sounds bad because we call it sour but it's actually tasty in the sense that we use it for all kinds of things right so yes that's actually high value oil the rest of it is in this stuff called the orinoco belt it's a big belt but it's not oil like you couldn't like the easiest way to get out of the ground is with a spatula right it just doesn't flow it's like it's really tar it's like a it's basically imagine a really hot road on this august day it's like asphalt yep yeah it's pretty much asphalt and it's packed with asphaltines a component of that so uh it's hideously expensive to get that stuff out of the ground you have to do all kinds of very fun things you have to either use steam which means you have to create steam so you have to build a power plant on site inject it down there or you have to put a diluent down some kind of solvent that you just inject in the ground and suck it back out again it's tricky um so remember uh trump goes down there and he brings in all the exxon and all these people gets mad at them because he said go down there and get that oil boys and they said it's it's uninvestable because there's probably 100 150 billion that would have to be invested down there and um defending an oil infrastructure in iraq is relatively easy because it's all flat desert yes um defending oil infrastructure in the jungle is a whole different beast if things go south on you so they said you can't do that unless you give us security guarantees and that's that wait that's awkward how do we do that so they couldn't come to any agreement and trump just got mad at exxon um but it's not trivial and it's very expensive and if we started today with complete security guarantees and also um contract guarantees in a socialist regime they took maduro out but the whole rest of the structure remained intact so i'm not real clear what happened there um it would still take five to ten years to get that flowing um and we don't have five to ten years we've got like two or three more months here would if it was flowing at full force would it compensate for the 19 million missing barrels of oil a day through the straight hard to imagine And here's its closest comparable is the the bitume in the tar sands.

1:02:32Canada likes they've rebranded it oil sands. But all that beautiful stuff up in Alberta, a very capital intensive over the past 15 years. They've managed to bring that up to a very respectable four point six, seven million barrels a day of flow. But it took tens, if not hundreds of billions of capital. It takes a long time. You don't just turn a tap on and it kind of comes out. You have to each chunk of the field has to have pipes put in it and infrastructure and steam and all kinds of stuff. It's just listen, if that's comparable, I would say if you could be as stable as Canada, I would imagine in the next 15 years, you could probably get that up to four or five million barrels a day if they're comparable.

1:03:11And listen, I'm simplifying a lot. I'll have some oil people calling me up and yelling at me, but just to keep it sort of roughly comparable. Four or five million barrels a day under best case circumstances with political stability, security, and massive hundred billion dollar infrastructure investments. You could get it to five million barrels a day. We're 20 million barrels a day offline. So like there's kind of no way around. I don't care what Doug Burgum or the secretary of war says. There's no way around the reality that like we are short. an awful lot of oil in the global markets. So what, I mean, that's just like, is that, or am I misreading this?

1:03:54That's the fact, right? Yeah, that's the fact. And I guess, again, the administration officials I've seen, they kind of keep going shrugging and going, well, we'll be relatively okay. But what they're really saying is the person, the country that we're going to hit the most is the largest importer of oil is China. And China may decide it has to say something about this. at some point in time. They've been very quiet so far, pretty suspicious, but it was May 13th. Trump goes over, brings over Tim Cook and all these other Elon Musk CEO types. And it was shortly after that that they really dialed back their imports.

1:04:30So I'm pretty sure there's a quid pro quo. The quid was, we'll stop importing for a while. I don't know what the pro quo was. You know, was it Taiwan? We don't know. We'll have to figure that out later. But China can't do that forever. They've been, I think, a little fairly gracious so far, but they are starting to re-import and bring their imports back up. And they can't have this area shut down for the next year. They're going to have to intervene in some meaningful way, I would imagine, because, again, energy is everything. And they know that. They've got these beautiful five-year sets of five-year plans.

1:05:04And their energy policy, actually, when I read it, I weep because I wish my country had one. It was so comprehensive. It's very thoughtful. It only brings on alternative energy slowly up to a certain percentage. and they're pursuing nukes and alternative nukes and small nukes and thorium reactors and a plank of their energy policy is have good relations with the people we get our oil from germany could take a lesson from that book right um you know and uh so they're obviously dialed in on energy they know it's important um and eventually they're gonna have to intervene here i think if we continue to mess this up how long till american consumers are shocked by what they see because of rising oil energy prices?

1:05:46Well, we're going to be shocked here. I think we both live in New England. Heating oil is up 84 % from this time last year. And I live around people who are going to be very hurt by that. And that's going to be tough. It's going higher than that. New York Harbor is a place where we have, they sell in five districts. The New York Harbor District for diesel just hit its all-time high just last week. So we're going to be seeing 550-a-gallon diesel again here very shortly. Those numbers are just going to keep going up. Yeah, and keep in mind there's been an organized and concerted effort to discourage the use of wood stoves for the last 25 years.

1:06:28Yeah, don't have a wood stove. It pollutes, you know, just heating oil. That's the answer. LP gas. Wow. Okay. so do you think um gasoline which is the i think the most common retail measure of energy prices i mean are you going to see six dollar a gallon gasoline before labor day or this year do you think yeah i really do so i'm tracking these every week we got another raft of numbers if you can believe them i'm not sure what i can believe anymore tucker i'm honestly i don't know um you know would it be beyond this administration to fudge the numbers and say we have more gasoline in storage than we do?

1:07:04Sure. Well within the realm of possible. But if we can believe the numbers as they are, we see that all of our actual stocks and inventories are going down. Now, this was tragically comedical when Trump came out and said, we're going to go after the retailers for gouging on gas. It's like, oh, dude, that's not how this market works at all. The 7-Eleven is a price taker. The guy with the big tanker shows up, tells him what that costs. And he's also a price taker. He goes to the distribution center and they're price takers. And so the people like there's no one person you can say is gouging. The refiners sell to the highest bidder.

1:07:36The highest bidder has the need to buy at that price so that they can supply the people who are depending on them. And that's how it works. So there's no gouging at this point in time, but we're going to see a lot higher prices because, again, all those inventories are just screaming downwards. And so there comes a point where I think we just have like how did Hemingway go broken slowly, then all at once. i think we're going to slowly people are going to start waking up that there's a there's a real crisis here these are shocking levels of inventory and eventually there's this mad scramble and that's the all at once part of this but you know 2022 america imposed sanctions on russia russian tankers and all that stuff and so there was the thought that maybe three million barrels a day might come offline and that was enough to send oil from then about 80 to 120 where it stood for five months right and then it turned out oh after the news settled in they're like ah it wasn't such a big deal because russia ended up using shadow tankers and selling it in india yeah exactly yeah it's no big deal so actually there wasn't any real impact to the oil markets and here we are now today with inarguably not just the largest energy shock ever but by literally whole factors right so We had the oil embargo starts in October, 1973 runs till March of 74.

1:08:55And what they did was they, they didn't, they didn't stop selling to the whole world. They said, I don't know why Norway's trapped up in this, but they said, we're not selling oil to the U S or Norway. I still don't know how Norway got tangled up in that. And then what they did was they agreed as a group of OPEC nations or Arab nations at that time that they were going to reduce their production by 5 % per month. so by the end of the whole thing the world was short nine percent of its oil right and that was enough to take oil basically from 370 a barrel to 33 it was a 10 10 bagger right and that created a huge shock and then we had the double wave of inflation that happened in the 70s um and it took paul volcker coming out and ramming interest rates to 21 in order to to pinch that second hump of inflation i mean can you imagine what would happen if we had to fight inflation that way so there was a huge learning from that and i believe that that the lesson was oh if we can just keep the price of oil down we can minimize the shock and so they're doing that and the problem is while they're doing that the price is too low even though it feels high it's still too low to truly match supply and demand and so supplies are just being run down so now we've run through you know the iea said go ahead release 400 million barrels all you you know g7 countries And we were a big chunk of that.

1:10:11We're almost half of that. We had all this stuff that Iran had stored up in tankers that they suddenly released to the world. We had all the Russian stuff that suddenly got released. All those tankers. We had all these tankers that were in motion at the time the war started. It took them a month or two to get to where they're going. So we had all of that to sort of work through. Now, that's all gone. And even if the strait opened up right now, you know, we would not get to 21 million barrels a day again till probably a year from now for three separate reasons. which you mentioned one there's we don't unknown unknown damage to the actual oil fields because they just had to shut them off and that's that's bad that's not how you treat oil wells and so we'll see when they turn them back on how much damage happened two they got to fix all the stuff that got uh tuned up right so refineries got hit and loading docks got hit and oil platforms and all that and probably one of the biggest things is just unbolloxing the um all the tech all the shipping, right?

1:11:07Because it wasn't just oil tankers coming out. There were cargo containers and bulk and carriers and all this stuff. And that whole perfectly choreographed just in time symphony of thousands of ships going hither and yon, that all got completely shredded. So that all has to sort of be reformulated and rebuilt. The shipping experts I talked to say minimum three, four months just to sort of uncork that and figure out where things are. And that's if and only if my magic finger snap made things stable and insurable and, you know, believably so. And, and I don't think we're anywhere close to that. Literally nowhere close to that.

1:11:45Now for, I feel like many Americans recall or have read about the oil shock of 1973, which is, you just said, had downstream consequences that lasted almost a decade and changed the country, changed how we manufacture cars, changed the culture, change the birth rate like it it really was a big deal though it was much smaller than what we're facing now very few people remember why that happened do you remember why do you remember why opec shut us out and norway and norway um well you know there was just uh i guess what i think israel was involved yeah that's exactly right because we sided with israel in the yom kippur war of 1973 that's exactly why so we paid a huge price in 1970 i mean not to be pedantic about it but it's just a fact we paid a huge price in 1973 for our support for israel which was not to our strategic benefit it was for sentimental or other reasons maybe darker reasons but it wasn't like we were getting anything out of it we didn't we lost and once again 50 years later it's a replay but 10x i just i just can't help but notice that yeah um even then though i feel like there was more reality sort of in the system we live in a super unreal time right now i can't believe like trump can just say things like oh we've completely beaten them militarily well then why can't we stop any of those missiles or drones you know it's just it's then why are we drawing down the sbr if the straight of hormuz doesn't mean anything it's it's yeah it's just and and we're we're the journalists i mean just ask a follow-up question you know i did see on with pete hegseth department of war i struggle with that too um you know saying but prices are high lady you ain't seen nothing yet um we are just getting started on this this could get a lot higher and and here's my concern the destination doesn't bother me if you said hey we have to find out how to live with like you know 13 less energy and we've got five years to sort it out and prices will climb to give us that's fine um the destination doesn't bother me we'll sort it out But it's the pace of change that gets you.

1:13:50Right. And so if we just slam into this and oil or gasoline suddenly goes from five to 15 or whatever it's going to do suddenly, that's where the shock happens. That's where the damage happens. That's where the uncontrolled things happen. And this is why I research and I look at neither of these two things independently. I always look at energy and the economy. And so here's what we have to understand. The United States in 1973 had some debt, not thirty nine trillion dollars of debt, right, with a structural deficit of two to three trillion per year for the next 10 years. Right. Just by law, nothing we can do about that.

1:14:25It's all baked in the cake with derivatives numbering one to two quadrillion, depending on how you count these things. Nobody knows what they are. Don't ask me. But literally nobody understands how the whole thing operates. But what they do is they provide insurance, Tucker, at a moment when you don't really need it. But if things get a little out of parameters, they say, like if interest rates suddenly do something really crazy like they did in the long-term capital management, they had all these fancy derivatives and all of a sudden, oops, Russian bonds went a little further than they thought in the wrong direction.

1:14:56and boom, six billion out the window and Alan Greenspan had to fix it. You know, if these derivative markets freeze up, what we're going to see is the complete freezing of our financial system and markets. And that'd be very bad. And, you know, sort of my dark horse candidate for kicking all this off is going to be Japan. Their yen is weakening really a lot right now. And they're trying hard to make that not happen. And also they've lost control of their bonds and the yields are spiking higher. And that's a very rare combination to lose control of both the price of your money and, and, and your interest rates.

1:15:32Uh, you know, that's, um, so that could be a situation where if that really starts to spiral out of control, they're going to have to do something. And that would mean closing markets, shutting things down, you know, and what would that look like? You know, we'll wake up one day and they'll say, Oh, you know, terrible things happened at Nomura bank, but don't worry. It's very temporary. oh actually japan's gonna have to shut their nikkei down for just a couple days actually hang on we're gonna have to shut down one of our banks over here for a little while and then it'll be wednesday and they'll be like we can't open it this is how this is going to sort of play out at some point but that's because we allowed you know we had the great financial crisis and they're like oh that was a terrible idea we had all these collateralized debt obligations and you know all that stuff we shouldn't have done that so learned our lesson today derivatives exactly like that are are still saturated through the market.

1:16:19They're twice as large as they were back then. No lessons learned, except they did write some laws that if the banks get in trouble, they're going to take your bank account to help make them whole again. They did write some laws, so they got that done. It's, of course, theft at scale. Let me just ask, though, I mean, Japan is the biggest or one of the biggest holders of U.S. treasuries. So what effect does that have on treasuries? well it has a lot so japan is going to have to sell those treasuries just to begin defending its currency right because they're going to need to that that would be part one but part two is japan imports 100 of its hydrocarbons it has no domestic reserves so as the price of oil goes up and oil products goes up they're going to have to buy those at higher and higher and higher yen costs so the poor people in japan are getting hit with a double whammy right first their yen is weakening that imports inflation second when they have to buy oil that's also going up in price it's with a weaker currency so they're going to be feeling it um sort of at a 2x rate of speed and that creates social unrest to create uh political problems it's it's going to create a lot of pressure to do something um and unfortunately there's not a lot that can be done for as long as the strait of removes remains closed i predict a bailout by china thereby neutralizing the japan problem which is one of china's biggest problems and they're you know obviously historically um japan occupied a huge part of china for a long time and chinese haven't forgotten it and they're concerned about japan they don't want american troops in japan they don't want japan to have a nuclear weapon and a desperate japan is good for china that's just my guess yeah let me ask you about um and i hate i don't want to get too dark with this but like the hope of the u.s economy at this point the entire future of the state of california is all predicated on the success of ai and ai doesn't famously produce anything it doesn't you know you don't make anything with ai you really just consume energy and ai like bitcoin mining is just a function of energy like what's the price of energy how in the world are you going to transform our economy from a manufacturing economy to an AI cryptocurrency economy with energy prices like this?

1:18:35How does that work? This is one of these big sour notes. I can't figure this one out, Tucker. But I just wrote a huge report on AI, my most recent one. I call it the Renaissance Report, which is overselling myself. I just have unmanaged adult ADHD. um this is so yeah but ai itself is very concerning because we've thrown trillions of dollars of capex at this so it's kind of all in we have to beat china right okay that's the story um but if we were really serious about this let's say we've got some idea that what we're going to do is we're going to get god in a box right and we have to get we have to get god in a box first and then we'll be able to run this whole thing but the implicit assumption baked in there is we're going to have these data centers and they're now permanent part of our architecture going forward all right they take a lot of energy right i call them toasters that don't make toast you know they make videos but they just they just basically just turn natural gas into waste heat you know that's what they do um and so you would think if you had a comprehensive beautiful five-year plan of energy strategy somebody would be going where's the energy for that coming from well now wander with me over to the world where actually our own energy information agency administration, the EIA says, we're kind of at peak oil right now.

1:19:51The shale beds of all sort of, they've done what they can. They don't go to tomorrow, you know, zero by Tuesday, but there's, we're not going to be putting more on going forward. And similarly, natural gas, there's a lot there, but it's kind of, wouldn't you know, it's kind of bumping along and okay. So you would think somebody would be saying, look, we need these boxes permanently. This can be part of our control grid. It's how we conduct business. It's going to be woven into everything. We're all going to have digital IDs. And if this AI system goes down, wow, we're really screwed. We won't know how to get people on flights.

1:20:20We won't know how to distribute, you know, lorries to Walmart. Everything breaks, right? So you'd think, wow, we should have a comprehensive plan. Well, first, we're not going to have natural gas forever. It, all two, like all good things, runs out. So we would be doing something smart. You would know that they were serious about this if they were slapping in small modular nukes and nuclear plants all over the place because that's the answer for that nukes make beautiful electricity a big fan of them but we're not doing that right not at scale and we haven't even figured out where we're going to get the uranium from to continue operating our own so it's it's almost it's this very unserious thing tucker which i can't figure out it feels like they don't care about the future they just there's some goal line they're trying to just like furiously cross over with the with the football i don't feel that way too i felt that way since really since trump's inauguration and i then i realized the goal line was the iran regime change effort like that's everything in retrospect about the staffing and the administration the transition all of it was designed to make february 28th possible but what i haven't figured out is what the point of that was do you have a thought i wrestle with this all the time you know it's yeah what do you do you pick it's either really rank incompetence or it's malevolence but malevolence on a scale that doesn't have a lot of precedent in history i mean that we know of i mean a lot of history most history is unrecorded but to the extent that we know So what previous empires did and why, nothing like this has ever happened at this scale, including in the 20th century, where you clearly the U.S.

1:22:06government or elements within the U.S. government are trying to destroy global energy markets, which, as you said at the very outset, is a one-to-one correlation to the strength of the economy, GDP. So like, why would you wipe out civilization? Why are you trying to do that? Like, what is this? All right. Well, for what it's worth, my ponderings and I reserve the right to change this in 10 minutes, but here's what I came up with. So back in 2016, there was this cheesy little WF video, right? And the first thing was you'll own nothing and be happy. And that got a lot of airtime. famous right yes yeah number four was you'll eat less meat you know and here we are with like you know alpha gal ticks running around and you know hamburger at seven a pound and then but number eight was the one that caught me the most because this one really bothered me and number eight was by 2030 western values will have been tested to the breaking point now why western values why not chinese values why not african values you know and ever since then i've had this strong sense that my country is under attack right kids don't know they're confused about gender we don't even have a border anymore um the pillars of of everything like morality like yeah pete hexath saying it's totally okay to take boats in the caribbean as long as we suspect the running drugs just summarily execute them these are not christian values they're not my western values they're not western values we only punish the guilty period i mean that's the essence of western values you punish the guilty you spare the innocent you don't kill innocent people that's why we're different from stalin's russia and from the mongols and like that is that is the west so we're different from israel which is not part of the west so yeah that's that's i've never heard that before can you restate that in the w world economic forum 2016 they put this little video up yep yep and it's western values would be tested to the breaking point and so people's you know i'm this kind of a guy if somebody says they're going to do something And then it happens.

1:24:08I'm thinking maybe they did it. You know, it's just how I'm constructed in this story. So, so that's a legal principle. Yeah. Well, it's, it's something I live by, but, um, it, this has been, you know, just watching this unfold. So on the one hand, this is all just errors of judgment and late stage empire and things rot and fall apart. Okay. Um, on the other hand, you say it's just too deliberate. So, so, um, you know, in my community at peak prosperity, we have a framework we use. We call it the easy hard framework, right? Developed by one of my one of my subscribers. And so here goes like this.

1:24:42If something's easy, well, the elites want it. And if it's hard, they don't really want it. So I've been astonished at how easy it was for these flock cameras to suddenly appear everywhere. You know, 100 ,000 of them, every one of them requiring municipal decisions. I work on the local town offices down here in my spare time. Nothing's easy at this level. But somehow 100 ,000 cameras went up and that's all about invading our right to privacy, right? Our sense of privacy, Fourth Amendment, you know, to be secure in my persons from searches and seizures. And somehow that was easy. Now, if on my farm I wanted to dig a pond, which would support life, and if you dig a hole in the ground and water goes in it, everything shows up magically, that would be very hard.

1:25:27it'd be super hard right you know if i wanted to do that that'd be very hard but if i wanted to go down to home depot and buy pesticides and spray them all over my property yeah go for it how much you have at it so i kind of feel like this easy hard framework when i start looking at this way the easy stuff is the stuff that's not affirming of of life liberty pursuit of happiness everything i hold dear and the hard stuff is stuff that actually makes life better right i was in the thing i was full-on warrior you know i worked with with pierre cory and paul merrick and the flccc and i i'm still on the board at the ima and and the people are just like look can i just use this repurposed cheap very safe drug like doctors have always used if they choose to use something off patent fine and that was very hard i mean the whole weight of the system came down on them oh you want to put people in ventilators and give them rimdesivir with an upwards of 85 kill rate easy rewarded and so you just notice this over and over again and then you finally get to i think the last great thing to skewer here is that we have markets they're free they're fair they're trustworthy maybe imperfect but they there were honest participants come to set prices amongst each other in a fair and open way and that's just not the case anymore and it hasn't been for a while that's the final black pill for me i mean it was one thing to discover that you know building seven probably didn't just fall in on itself because it had airplane parts on the roof or that multiple people were involved in the kennedy assassination okay you know those those truths dawned gradually for me but markets i mean markets take place on the basis of the most simple and self-evident principle in life it's almost like a principle of nature supply and demand and they take place transparently or so i thought i mean it's it's really hard as an american to accept the fact that markets and i think i speak for many when i say this are fake i would agree i would agree you want to think of something that's hard you know it's hard getting the gold at fort knox audited oh my gosh that's so hard yeah i wonder why that It is.

1:27:46Because it's not there. My last question to you is, what counsel would you give if people have made it this far into the conversation, they, I'm certain, agree with the way that you think, putting truth at the center of your decisions is the only way to think. What advice would you give to people about their personal finances in a moment of turmoil like this? Well, this is the... Excuse me. Woo! Woo! because tonight we got a little cold sorry good to get those out just let him go um well this is this is so i don't do what i do tucker so that i can like make people feel anxious i don't like stirring things up i really don't like that at all i what i want to do is find enough truth where i go look if we put these dots in a row what conclusions do you come to and sometimes they're not easy conclusions and i understand i'm not really in the data business i'm in the belief challenging business.

1:28:40So you mentioned the red pilling, right? Yeah. So when I say like, you know, the whole thing that happened with COVID is kind of like, Oh, you know, look, there's this really awkward stuff that's happening, but for people to accept that they had to give up some really important things, maybe like faith and authority, right. A belief that the medical system is there to help them. They're like powerful beliefs and that's a, an emotional process. So I understand I, I put up pretty hard information for people because it challenges big beliefs, but I've gotten very good at it. And if you can get through that, then you get to some conclusions, which is like, oh, maybe I should be a little bit more responsible for my own outcomes in the future.

1:29:17Right. Maybe I should grow a little bit of my own food, not a hundred percent, but maybe 3%. And, you know, going from 3 % to more is easier than going from zero, right? Zero is a hard place to start from. Maybe I should be responsible for my own safety and security. Maybe once I understand how the markets actually work, that in fact, everybody should understand completely how the money system works, right? I got an MBA. They taught me how to compete for dollars. I was in the arena. And then finally, I read Creature from Jekyll Island. I was like, that can't be true. How money is made. And you find out banks make money out of thin air.

1:29:50That's what they do. And there's no limit on it. And when you figure out, wow, humans with no limits and perverse incentives, we're going to get more money printing. So I'm like, great. What do you do with that conclusion? Nothing I can do about that. Oh, well, I can hold some gold, some silver land, like things that stand the test of printing over and over again in history. And so my counsel to people is, you know, get really get in as much context as you need and no more to begin to figure out if you have to make some changes in your life. And for a lot of people that come to conclusions like, oh, I should safeguard my wealth a little bit more, which means you have to actually understand what wealth is.

1:30:22Hint, it's not dollar bills. um and so once you figure that out where wealth originates from you can start to make different decisions and the way i think about it is there's primary wealth so if you live on a rocky stretch of new mexico desert you've got very little primary wealth but if you're on a you know 18 feet of iowa topsoil you got a lot of wealth right so the primary wealth is is in the land itself right oil in the ground coal all that stuff secondary wealth is what happens when humans bring that stuff to market, right? So trees become lumber, fish get to market. So secondary wealth is the means of production.

1:30:57And then tertiary wealth is dollars. It's representations that point to that, but money itself, currency has no value if you can't buy something with it, you know? So what do you do with it? Like, you know, and so I tell people almost everybody's been marketed to incessantly that they have to have all their money in this little tertiary system. All has to be here. You should have stocks and bonds, diversified currency, big bank accounts. But if you don't have a lot of stuff underneath that, I submit you have very little actual wealth because this stuff is a claim on wealth, right? It's like, what do you do with dollar bills on a deserted island?

1:31:36You know, start a fire with them, I guess, you know, but so once we start to understand where real wealth comes from, this is how I think people protect themselves. You move if you're 100 % exposed and tertiary, get down into primary, secondary wealth forms as much as you can. Um, for me, that's meant, you know, I live on a farm. Um, I know not everybody can do that. Uh, and I have a lot of the ability to sort of attend to my own energy, food, water needs here, not all of them, but significant proportion. And because of that, I've built a buffer in my life. And so that's what I tell people to start building buffers, not crazy bunker Idaho guy.

1:32:11Who's going to like survive forever on his own wits and skills and beans, right? Um, nobody can do that. But again, remember the pace of change. If big shocks are coming and I'm convinced they are, you want to have as many buffers out there in your system as you can so that you can absorb that shock as much as you can. I think that makes for a happier life. And, um, and I started all this cause I was a little worried that things could break apart in any moment. It turns out they're more durable than I thought. But now that I'm here, Tucker, I realized this is such a, this is how I was meant to be living anyway, in much more close connection with nature you know and um feed on the ground and having real relationships with our cows and our chickens and all that other stuff and also deeper relationships with my neighbors and so a everything's going to get local right b you're gonna not have to do everything but you're gonna have to find out what you're good at and bring that to your community c um i just if i could counsel this is the deepest thing i want to counsel is whatever we're about to go through i don't want the people i love to have to accidentally lose their humanity what does that mean hard decisions are probably going to have to be made at some point in in this particular story and i feel like everything that my culture is pushing towards is asking us me to be

1:33:40inauthentic disconnected from self um and capable of doing really horrible things um i just you know this has become i didn't start out this this this was crazy tucker it was actually a tweet that did it for me um grew up protestant i think uh church was uh easter sunday and christmas that was the whole whole game been there um and hadn't read the bible at all and i saw this tweet that said i've turned to god not because he spoke to me but because evil made itself known exactly and man it landed on me and i said got goosebumps i was like oh that's that's kind of true isn't it and that's my that's the organizing principle that that everything fits in right now and because to me what's evil that's a short word but it means something that revels in and promotes It's death, destruction, debauchery, demoralization, decay, just anything that it can do like that.

1:34:37And so the number one way that evil has its way, of course, is by distracting us and keeping us hopelessly, endlessly distracted with things. And if the other side of that is good, well, good's hard, right? Good takes conscious decision making and you have to keep practicing it and you fail at it. And so that's when I first started reading the Bible. It's just a few years ago. it was such a page turn i'm reading it out to my wife evie i'm like hey humans have done this before look at this romans you know exactly what there's nothing new under the sun and and and so i honestly truly believe that this ai thing this is our tower of babel it's a device by which we've convinced ourselves we can finally get that exalted seat next to god even parody we are god now we can be one of the team you know and and of course that a lack of humility that pride um that arrogance has always backfired and i'm convinced it's going to backfire again and i just while that backfiring is happening i don't want the people i love to have to lose their humanity um which means engage in the destruction as it unfolds around them i couldn't agree more i had a path so similar it's almost identical but it was you know seeing evil that drove me to god and and to the bible and to the realization that we've done this before in fact it's on a loop and the root of it is man's desire to be god which is a evil but but also fruitless quest i mean it's you know it results in the tower of bible i couldn't agree more so but but when you say lose their humanity What do you mean participate in a system that strips them of their humanity?

1:36:22Yeah. Yeah. I feel like it, like pretty much every, everything that's easy that's arrayed around us are just invitations to begin losing our morality. They're invitations to betray ourselves and, and our sense of integrity. And cause they never just ask you one day to just line up and shoot somebody in the back of the head and push them in a ditch, right? There's a long series of mini usurpations along the way, and it all begins with the small things, and that's where they start. And so I've completely changed my opinion about all kinds of things, you know, pornography and how easy that is, right?

1:36:57And, you know, you're only five minutes away from an alcohol store in any community, you know. Everything that's easy is just something that's, I think, designed to pull us off of our game. And our game is a short life. you know we're all here for a reason and i think the reason is to find out what you're really good at and bring that to other people and um to make everything around you better um and honestly i'm i'm here talking to you long story but um the thing that gives me the most grief is that i can open a window now on a july night leave a light on and in the morning there'll be one little desultory white moth flapping about and when i was a kid if i had done that it would have been this frightening menagerie of rhinoceros beetles luna moths and giant walking sticks and it's all gone it's gone we are destroying life and i'm really clear about this we're here to shepherd this and it's not just about humans if we improve life for everything around us humans are part of that and and i think it's our job to be conscious of that and and treat that as well as we can and and we're just we're just not um and that's yeah though i have to say i i cleaned bugs off windowsills this morning um fortunately and unfortunately that's not true where i live we still have a lot of insects let me ask you one final specific question about markets and it's about the gold market as measured by the the famous spot price that you pull up on your phone beginning with the 2022 ukraine war it was really clear to me that the u.s dollar was on a course toward irrelevance and that we would lose our status um as the holder of the world's reserve currency it was just very obvious based on what the bide administration did i think was going to happen anyway but it was accelerated with that uh with kicking rush out of swift that was my opinion so i started buying gold and i saw it go up up up up and up this war starts in february it goes up over five grand an ounce and then it drops and i've never understood why that happened it doesn't make any sense to me i'm still a gold buyer we have a gold company i mean i believe in it a non-scammy gold company i mean i'm i still buy gold but i don't understand its movement do you i don't think anybody actually really does um but there even before 2022 there was this giant tectonic thing that was happening where gold was really just going from west to east right yeah so i used to track very very carefully um some of the big swiss refiners right they would just report like how many kilo bars and where are they going they were all headed east they're all headed to china and this is way before 2022 which is why why i wonder how much gold actually sits you know in london or in new york um and so so for a long time it was like oh nobody cares right because gold at that time was, you know, thousand, 2000 announced or something like that.

1:39:51Right. So nobody cared. So then the war happens. And obviously what should have happened was gold should have just absolutely skied on all that uncertainty. Right. And, and silver as well and oil and all that, the exact opposite, all those things happen. So markets, right. But our trade data just came out. And so for January and February and for March, we've never exported more gold ever in our history, probably representing 10 to 11 million ounces, depending on how you score the spot price during that period. And that's a huge number. And where did that go? That was actually our number one export, even more than oil, right?

1:40:27Like it's a pretty big deal. So we're hemorrhaging our gold is if we don't care. And I, you get back to China. I wonder if that wasn't a quid pro quo. Hey, you know, you're going to do this war thing. We'll help you, but we don't want to pay 5 ,000 announce for your gold we'll give you four or something like that that could be part of the deal so this is gold held by the federal government this is called non-monetary gold um and so that's something non-monetary gold's held in comics for instance it's not the stuff held at the federal reserve we think i'd also love an audit of the fed can we get one of those um that would be a fine thing to see what's going on there but i the flow of gold around the world it's kind of it's a funny thing if you really want to get into gold statistics is very hard because they're super opaque and they just they tell you it's a barbarous relic it's not important but no you can't see any of this data right the london data is really hard to get um you can you can more easily find instructions on how to build nuclear devices right on the internet it's just like it's this weird thing so i know it's important because they won't tell me how much we have they won't let me see the statistics you know but they say it's not that important so we know it's important and we also know that central banks around the world have been accumulating to the point now that gold is actually a larger holding in central banks around the world than treasuries.

1:41:43Big crossover moment there. So my sense of gold is somebody's working extra hard to just keep it tamped down because it would be really awkward right now if it went up in price and signaled something inappropriate. And so that's what I've learned about our markets. They're actually signaling devices. They're not legitimate places of inquiry and price discovery between honest buyers and sellers. they're often used to set prices so do i have time so they're like cable news that way i mean they don't yeah they're not there to tell you the news they're there to shape your opinion about the news yeah yeah of course please tell me a story i would love it this is a great story so so um gold was illegal from 1933 to 1973 right and then okay so there was a lot of concern they're going to make it legal for u.s citizens to own it again so they're very concerned that it was going to go up in price maybe a lot and that would send the wrong signal and of course they just spent 1968-69 with the London gold pool surreptitiously batten all the you know London and New York just working extra hard to keep the price of gold down for reasons and so all of this was going to be very awkward they just didn't want gold going up in price so we have because of WikiLeaks a cable that went between New York and London and they said hey here's our plan the primary gold dealers tell us that if we start this thing called futures for gold, we can so overwhelm the actual real price of gold with this paper price that we will create enough volatility and that people will lose interest in it and we can diminish their desire, they said, to hoard gold.

1:43:13So they just, they conceived it right away. They're like, look, if we can make this paper price thing, we can wang the price around until people get frustrated or lose interest. And that's how we can control this. So that's how it started. Think of a bakelite phone, you know, the phone connected to the curly cord in 1973. Think how much more sophisticated the application of these algorithms are today to manage prices. And they did that for optics. They did that for political reasons. Is it any less important today? No, of course not. Spiking price of gold signals a loss of confidence in our fiat debt-based money, which is fundamentally a faith-based currency.

1:43:49you can't have something poking needles at your faith but one faith that's never dimmed is in gold so the chinese believe in it the brits believe in it we believe in it the germans i mean everyone believes in it that's interesting to me so as uh as a store value for like the average american family because the price is down relative to what i think it ought to be what it was six weeks ago is it a good time to buy it now i've i've been a consistent buyer of gold for 25 years now um and i'll tell you this every time i've bought it it's hard it was really hard when i first bought it at 300 and 500 was extra hard 800 was super hard it's always been a hard uh decision but over over the long haul um you know gold has performed better than the stock market over that entire period by a wide margin.

1:44:43And it will continue to do so because we're going to print and we're going to print more money and we're going to print a lot of it coming up. The Fed's already printing money right now, 200 billion over the last six months. You know, the U.S. government effectively prints because we send out right now $1.2 trillion of interest payments, which is cash that goes back to the market that we have to then borrow more, which the Fed enables. So this is all, we're just going to print and print more and that's the game. And to put a story on this, You know, the United States, it took all the way to 1990 before we accumulated our first three and a half trillion dollars of federal debt.

1:45:18So from the founding of the country, the 1990 took, yeah, three and a half. You know, what do we do with that first three and a half trillion? Well, we built interstate road systems and, you know, every bridge schoolhouse. And we did a lot. We the U.S. government's tacked on three and a half trillion dollars of debt in the last 12 months. and what do we build a lot of interstate highway systems and new schools i can't name one thing to be honest i don't want to howard lutnik yeah right yeah and and foreign wars and and uh yeah it's just that that's the thing but you know that on that basis though that's going to be three and a half trillion every six months and someday we'll wake up it's every one month and then it's three and a half trillion every week and this is just how the story of fiat money has gone literally hundreds of times throughout history is best of intentions but you lose the brakes we lost our brakes in august 15th 1971 when we severed from the gold standard and ever since then it's been sort of like dick cheney growling at us that debts don't matter you know but they do and they will yeah chris martinson thank you for that for the clarity and the honesty um and the wisdom i appreciate it i hope we'll come back thank you me too that's it for us tonight.

1:46:34We will see you tomorrow and next Wednesday, 6 PM. Thanks.