In this Flashback Friday episode, Jason Hartman hosts the managing director of GoldSilver.com, James Anderson. They talk about the historical cycles of gold, silver, and other precious metals against the monetary cycles. They also discuss inflation, regulation, and irresponsible spending.
This show is produced by the Hartman media company. For more information and links to all our great podcasts visit Hartman media.com.
Welcome to the flashback Friday edition of the creating wealth show with Jason Hartman. As he rapidly approaches 1000 episodes of this podcast, he has hand picked individual episodes that he feels is going to be good review for you to prepare you for the future by listening to the past. Let’s dive in.
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants Get involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:19
I can hear it now. I can hear the voices. I know what you’re saying. Jason, where have you been? Yes, I am sorry. I apologize that we have not been publishing as rapidly as we used to in the past. I have been a busy person. I am talking to you today from Scottsdale, Arizona, and I have actually completed the first phase of my soft move out of the Socialist Republic of California. So I’m very happy about that with one major exception and that is the temperature. Yes, it is hot, but it’s a dry heat. And everybody tells me that if you like Scottsdale Arizona in June, you’re gonna love it the rest of the year when it’s ready. summertime. So I’m looking forward to that. Although, you know, I’m sort of half joking about that I’ve spent a lot of time here, I used to have a second home here. And now I plan to have a primary home here. So I’ve been very busy with move. And with a whole bunch of other projects that we’ve been working on for you, which I think you’ll see in future shows and our future events, we just completed our last members only conference call. And that was on the subject of due diligence. And with due diligence, that’s obviously a very, very important issue in your property selection criteria. So I would highly recommend that you become a member register for a membership on Jason hartman.com. And it is a very low nominal cost to get access to the members section with all kinds of resources. You get discounts on products and events, and just a whole bunch of benefits that go to members only and other things that go to members first. So take advantage of that by registering at Jason Hartman calm today on this show. We’re going to talk about Gold, we’re going to talk about golden silver. And you know, you probably think sometimes Why does he talk about that as much as he does being a guy who is interested in income properties and income property investment, and I’ll tell you why. Because it is such an important measuring stick. And as you know, I am far from being a gold bug or a precious metals bug in any sort of way. I only think that precious metals are better than currency. And by the way, let me make that distinction. currency is not the same thing as money. Almost everybody on earth agrees that gold and silver are money. Everybody used to agree that dollars or money or euros or money or whatever currency it is, that’s just currency. That’s not actual money. So I do like precious metals. From that standpoint. I think they are a decent store of wealth. But of course, they have many defects and we’ve talked about them on past shows and what this is really leading up to this whole discussion is our various Special Report that we’re about to release. And I’m gonna quote a few things from that report for you before we get to today’s guest, because I think you’ll just find this fascinating, fascinating, fascinating stuff. But let me first discuss some of the problems with the precious metals. Number one, they don’t produce income. Number two, they don’t have tax benefits. And in fact, they have extremely dis advantageous tax consequences. Because when you do have a capital gain on them, and you sell them, they’re taxed at the collectibles rate of 28%. So not only can you not do a 1031 tax deferred exchange, like you can with income property, not only do you get to write off all sorts of expenses related to them and interest payments related to them, but you are taxed at an incredibly high rate, not even the lower long term capital gains rate when it comes to precious metals. So again, they are not favorable in a lot of ways. You can’t finance them, you can’t rent them out. They don’t produce income, they are totally speculative. Just like any stock that doesn’t produce dividends is also speculative like investing in vacant land which doesn’t produce income which is speculative. Remember my definition for an investment in order to qualify as an investment, it must have this characteristic, very important characteristic, it must produce income. Remember, you’re listening to flashback Friday. Our new episodes are published every Monday and Wednesday. It must produce income if it does not produce income. It is not an investment. It is a speculation. And I’m not saying that you can’t occasionally make money from speculation, but I’m just saying that is not a sound overall strategy when investing it is highly, highly risky. And then the other thing is the trading Cost of golden silver. Most people never catch this one. But I really want you to catch this one because when you buy it, you pay a premium. And when you sell it, you pay a premium. Most people when they look at real estate, when they look at income property, they think, well, it’s very illiquid, because it has high closing costs. So if I buy it, I need to hold it for a period of time in order to amortize those closing costs over a period of a few years. Well, that is true to some extent, certainly, but you know what, you have those high closing costs with precious metals with gold and silver too, because by the time you pay the premium in the investment to buy into it, and the other premium to sell it to get out of the investment, and maybe some shipping insurance costs and storage cost in between, you’re usually up well over 10% in your premiums in terms of your I’m sorry, not premiums, but closing costs, we should call that closing cost or trading costs, but here is what I want you to to really consider our report that is just about to come out is talking about how gold, it’s really gold versus the world. And just check out a couple of things from this, if you took the total value of all gold and silver ever mined from this planet, if you took the entire known value of the Golden silver that is available, the aggregate value of that it would be just over $9 trillion. Well, if you’re wondering if there’s a bubble in gold and silver, there are some really good things to consider when thinking about this because if you look at the entire capitalization of the US stock market, that’s almost $14 trillion. Now think about that, that represents every publicly traded company on a US stock exchange, consider that includes the entire energy sector, oil, all energy, all other forms of Energy, the entire pharmaceutical sector, all the drug companies, the entire technology sector, all the computer and tech companies, all of the agricultural sector in terms of the corporate agricultural sector, okay, so all of the corporate farms, all of the big ag companies, every major media outlet that is publicly traded all manufacturing companies that are publicly traded and many other businesses, wow, that’s almost $14 trillion. Yet the entire stock of all gold and silver on earth is just over $9 trillion. What would you rather have Would you rather have the entire energy sector of the United States plus the entire pharmaceutical sector, all tech companies, all corporate farms, all major media outlets, all manufacturing and all other businesses traded on the stock exchange? Or would you rather have all the gold and silver in the world? What’s more useful? What has more utility? Think of the entire GDP of the United States? Would you rather have one year of every product in every service, and every good sold in the US or produced in the US? an entire year, say 2012 next year, or all the gold and silver in the world? I can tell you I think the choice is pretty clear. I’d rather have the stuff any day because you know me, I’m a really practical person. I am into stuff we need stuff to live we need resources to live and again, it may sound like I’m totally panning gold and silver. And I’m not I think it is a it is a leading indicator of inflation and it shows that we are going down the wrong road in In terms of our fiscal and monetary policy in this country, certainly it’s a great measuring stick for that. And I would much rather have a pile of gold and silver than a pile of papers with dead presidents pictures on them. In other words, dollars, because that’s currency. Gold and Silver is money. But then do I make the decision? Do I want gold and silver? Or do I want stuff? Do I want pharmaceuticals? Do I want food? Do I want technology products? Do I want energy? And then the question becomes really easy. I’d much rather have the commodities I’d much rather have the stuff and that’s really what we have to think of as income property investors. We invest in things that make sense the day we buy them, don’t we, we invest in assets that produce income. We invest in things in stuff in resources that every single human being on earth needs. Guess what? They don’t need gold and they Don’t need silver, as much as they need a roof over their head. They don’t need gold and silver as much as they need petroleum products. And this is what houses are made of, aren’t they as much as they need copper wire, lumber, concrete, paint, all of these things, all of these ingredients that go into a house, that’s what they need the most. And beyond that, of course, they need food and they need energy. But all of those other products minus food, all of those other commodities are really in the ingredients of a house pretty much. So when you compare it and look at it that way, you’ve really got to ask yourself, are we in a gold bubble? How much of this is speculation? How much of it is is speculation with silver I mean, recently, we saw this huge pullback in silver where it was hovering around the $50 mark, and now it’s back down to $34. Now listen, it’s hard for me to say that silver and gold are a bad deal. I started buying gold at $420 an ounce and I started buying silver at about $9 and 20 cents an ounce. So I’ve done Okay with my gold and silver, but my real question is, has the gold and silver appreciated? Or is it just that the dollar has depreciated? And if the dollar has depreciated, what has happened to the value of my commodities, my packaged commodities in the forms of my little houses that I own and so many diverse markets? Well, what has happened to the value of the debt, the long term fixed rate debt on those houses? Am I really making the money from the double inflation arbitrage that I’ve talked about on prior shows? Or am I really making the money or creating the wealth from the ultimate inflation payoff, the inflation induced debt destruction? Well, I think I am, but I think it’s largely been hidden behind a curtain. It’s been hidden behind the veil, as we’ve seen this broader market, mostly represented by the completely misleading Case Shiller index. And when I say that I’m not saying anything bad about Case Shiller for the time. Markets it covers it’s fine. But the problem is those 20 markets aren’t 400 markets, it needs to cover 400 markets if it wants to have a real real understanding of what’s going on in the United States real estate market. And then of course, it would need to also cover the multi dimensional aspect or all the multi dimensional aspects of an income property investment, like we do in the predictions report available at Jason Hartman, calm shameless self promotion. I know but you really got to read that that 80 pages because it is quite insightful into the what is really happening with income property, not not what you hear in the mainstream media or Sarah Palin calls it the lamestream Media. I was like that one. So this gold report is coming out soon. You’ll hear more about it. It’s 12 pages long It’s entitled The world is not enough. All I think the James Bond movie The world is not enough for gold bugs, why gold and silver are in a value bubble and how to avoid the bubbles. trap and exploited. Now with all of that said, we’re going to talk Our guest today very knowledgeable on gold and silver. And I think you’ll like what he has to say, again, this is a great measuring stick, you’ve got to pay attention to it. But you’ve got to understand that it has huge limitations in very big risk because it does not produce income and it can’t be rented out in quotes to somebody else. You can’t outsource debt on it. You can’t create income from it. It is speculative in nature. So again, great measuring stick better than currency, but not better than real investments in controlling resources. And that’s what our report is really about that I think you’ll find very fascinating. So with that, we will go to our guest in just less than 60 seconds and be sure by the way to register for our upcoming masters weekend. That’s not till October, but we want to see you there in Orange County, California. And some of you have asked how We booked the venue location yet we haven’t we have been negotiating the last two we had at the Hyatt Regency in Irvine, we have not booked that location. But don’t worry, there is more than enough time to book your hotel rooms and just fly into john Wayne Airport and reserve your tickets that are low low prices at Jason Hartman calm remember those do go up in $50 increments as we get closer to the event and they’ve already gone up a bit. So get in early, the early bird gets the worm so to say and we will have a room block for you and some great deals on rooms and so forth at our venue when it is formally announced. And again, we’ve got several months, that’s not to October. So just get your ticket get registered and we will look forward to seeing you in October. And we may have an event or two even before that not sure yet. But we will be back with our guest in just a moment here. And thanks again so much for listening to the creating wealth show we will be publishing a little bit faster. I promise you we’ve just been really really busy with some other stuff my soft move out of the Socialist Republic of Korea. fornia launching my new company open door auctions and just very busy on the investment side as the market has been really, really hot and so much money moving off the sidelines right now. So again, we’ll be back with our guest in just a moment. Just a reminder, you’re listening to flashback Friday. Our new episodes are published every Monday and every Wednesday.
Now you can get Jason’s creating wealth in today’s economy home study course. All the knowledge and education revealed in a nine hour day of the creating wealth bootcamp created in a home study course for you to dive into at your convenience. For more details go to Jason hartman.com.
Jason Hartman 16:49
It’s my pleasure to welcome James Anderson to the show. He is very interested in Austrian economics. He was involved with Ron Paul’s presidential campaign and he is with goldsilver dot Calm, and he was referred by Michael Maloney. I’m sure that’s the name you’re familiar with. And we’re going to talk a little bit about currencies, inflation, precious metals, and just the general outlook on some of this. I’m sure you’ll enjoy this show, as we talked to James Anderson. Welcome, James. How are you?
James Anderson 17:15
Thanks, Jason. Very good. Glad to be here.
Jason Hartman 17:17
Good, good. Well, what is your outlook on the present state of our irresponsible government and you’re Responsible Federal Reserve and the powers that be?
James Anderson 17:26
That’s a great question in your day to day we get hammered with so many things, as far as you know, what, what is the new thing to worry about, you know, fundamentally big picture, looking at it, just given the amount of promises that we’ve made, you know, as far as as far as a society, and how we’re going to pay that off, it all pretty much spells the dollar losing 5060 70% of its value, because basically, they’re going to pay off what they promised they’re not going to default. Right? You know, that that we don’t believe but you know, they will pay back in dollars. But you know, the only question is, what are those dollars going to buy us right? So you You know, you might you will get your Social Security check, you know, but there’s no promise about what it will buy you, the pensions will pay you, but there’s no promise what it’ll get you. You know. So this is fundamentally where we’re headed. It’s just a question of exactly how we’re going to get there and what day and what time, you know. But inevitably, that’s where we’re going. So that’s how we feel about it. It’s more of a long term view.
Jason Hartman 18:20
I couldn’t agree more James for an irresponsible government that buys votes from people by promising them goodies. Inflation is the surest way to fool and rob the public because most people, they just simply don’t get it and it happens so slowly, it’s like putting a frog in the warm water and turning up the heat slowly until he boils to death. And that’s what will happen defaulting is too abrupt. It’s too politically unpopular, but hey, that Social Security check, it may say $800 or whatever the number is at the time and the real value of it will become progressively worth less so that’s that’s where we’re going because it’s the easiest road out for for an irresponsible government to It’s their way of quote unquote, balancing the books, I guess they can keep making their stupid promises and fooling people. But eventually it really catches up and it hurts. You know, I think we’re in a situation where we’re going to see 10s of millions, if not 200 250 million or more Americans really suffer a huge decline in lifestyle through inflation. The debasement of the dollar is a very, very real thing. But here’s what I want to ask you James. It sometimes I see how irresponsible our government is being and certainly we’ll both agree with that most of our listeners will too. But is the US just sort of the best house in a really bad neighborhood? Because look at what the other countries are doing. I mean, most countries around the world RMS to Europe is in huge crisis. Every currency on earth now is a fiat currency, as far as I know, isn’t it just a big race to the bottom? Isn’t it just relative?
James Anderson 19:53
Yeah, that’s true. I mean, the fact that all the Western countries and they’re all in trouble, they all have big And then the thing about is we print our dollars, you know, every other country around the world got to keep printing their currencies, so things don’t get stabilized for trade. So we have an article that we put out like every quarter it’s it’s kind of like a job title. It’s kind of catchy. It’s called race to the base. But it’s it’s more it’s kind of sick. You know, that the idea that, you know, the world is running around racing to debase their currencies. It’s very sad because like you said, most people that it’s an insidious thing taxes inflation, it’s attacks that most people they don’t didn’t dawn on until it’s too late. Right. And so, yeah, I mean, it’s true. It doesn’t matter what currency you go to. They’re all going toward the bottom either printing it doesn’t matter yen euro Frank, you know, I don’t care what you say. If it’s not gold or silver, it’s going to be losing value in the coming you know, 510 years.
Jason Hartman 20:46
Well, the one thing that gives me some minor hope for optimism in a in a somewhat perverse way about America and about the dollar is that in light of everything that’s going on, which is just I mean, it’s it. You couldn’t write fiction line for us. It’s so irresponsible. It’s so disgusting on every level that it’s just mind boggling, really. But the US has a brand number one, and people around the world still look to that brand as a light of freedom. To a large extent, I think it’s less so than before, but still better than a lot of places. And the other thing it has is it has far and away the world’s most powerful military. I’m sure you’re familiar with them. But I interviewed john Perkins on the show. And he’s the author of confessions of an Economic Hitman. And again, his old his empire and a few other books. And Won’t we just push other countries around to keep our supremacy as the world’s reserve currency? When things get really tough? Won’t we just kind of force them to go our way? I don’t know how long we can keep doing. It. Sure is that but
James Anderson 21:50
that depends on who you believe is really running the show here. If you think that they have a loyalty to our United States, then perhaps that’s true. I used to think that way. I don’t think that way. anymore, the United States is more or less a carcass, it’s being used to this point, and it’ll get positive side when it’s eventually done, and you stop and just go Third World status. That’s basically it. Now, it’s, it’s sad to say that, but it’s happening slowly, you know, so people that doesn’t dawn on them, but it is it is occurring, you know, unless there’s a movement back toward rule of law. And then I don’t, you know, expect to see a reversal of this until we go into into a third world look. And that’s just the way it is. I do agree, though, you’re right, that the, you know, the military, that’s what back to the dollar really, is the fact that we have a military mind, you know, and that people are still using it, the trade with oil, but eventually, you know, if if the interests of the central bankers of the world have their way, they probably won’t be a reserve currency in the long run.
Jason Hartman 22:41
And so just to expand on your point there because I want to make sure the listeners understand what you were saying and I do agree with you, by the way, I’ve certainly read and heard about the 12 families that run the world and studied the secret societies and and then there’s the central banks and the Rothschilds etc, etc. So when you say the US depends who you believe is running things in the US is just a carcass that’s being used to for a greater goal. Who is that? What do you mean by that just expand on that a little bit?
James Anderson 23:07
Well, you know, in the end, it’s it’s the idea that our politicians are the ones that run the show. That’s, you know, like, like brock obama’s out there actually in charge, you know, he’s more or less a puppet, you know the real the real power is behind it the people who were the private shareholders of the Federal Reserve, you know those are the real powers when it comes down to it in the United States that that power structure and the apparatus that they use to manipulate you know, and move things, right. That’s really where it goes. And I don’t know what the names of these folks are, I don’t really care. I just I just see the actions that I can see rhetoric rhetoric, and you can tell that that doesn’t mean anything, but what are they doing? That’s what matters, right? He’s stabilizing the Middle East that kind of stuff. You know, those people are not fighting out there for free democracy or whatever the media have. You think you look at pictures, these people have like 50 millimeter bullets on their chest, that that’s not some bullet that they kept in their closet. They’re being You know, somebody’s giving them those bullets. Right? So it’s a bigger, something else is going on here larger than than what the media will tell you. And I’m not trying to say that I know specifically what’s happening, but it doesn’t. It’s not I know I’m not being told the truth. Right, that but i know
Jason Hartman 24:15
i think that’s a pretty good bet that none of us are being told the truth. So, so I would agree with you there. So hey, in terms of devaluation of the dollar and other currencies, if you want to address any of those, what do you think the future looks like in terms of inflation? I believe we are in for the most severe bout of inflation we’ve ever seen in the USA. And when you look back to the Jimmy Carter era in the 70s, and and the beginning of the 80s when reagan was changing things that’s just nothing compared to what what I think is coming I think hyperinflation is a very real and significant possibility. What do you think? What do those numbers look
James Anderson 24:56
like? You know, if you look at it, like right now Since you put some money in or some dollars in the in the bank, what type of interest rate? Are they going to pay you if they’re going to pay you like 1%? Right? You know, point 5% where, you know, if you look at the real facts of it, you know, if you actually calculate how food and you know, your roof over your head costs, how much that’s been running, you know, inflation, probably real real inflation probably like eight 910 percent. Now, let’s, you know, just try doubling that up. That’s, that’s probably where we’re headed. You know, when this thing really starts getting going, there’ll be like a 20% gap between what they’ll pay you for your cash, and what you know, truly, you’re losing every year. Now you do that, not just one year, but you do that multiple years in a row. And that’s going to create a big difference, right? It’s compounding it’s just like compounding interest, right? It’s the same story. Inflation when it compounds can make a big difference. And, you know, ultimately, like I said, in the beginning, I think is where we have to move is the dollar has to be slashed by about 60 70%. Right? So how many years of you know have a 10% gap like we’re currently in? Do we need to get to there is that five to 10 years, it’s probably going to get worse than it is So, you know, we’re talking 20% gap between what the banks will actually pay and what the real inflation rate is. And the whole time they’ll keep telling you the CME, you know, they’re they’re basically they’re, what is the word they use for the inflation index? It’s the CPI, CPI. Exactly. But what Mike Maloney calls this the CPI.
Jason Hartman 26:18
Right, that’s a great, that’s a great name, the CP lie. That’s right. Let’s call it the CPL, the CP lie. Yeah. You know, I love how they even dare to quote, core inflation, the core rate where they take out food and energy is if any of us can survive without food energy, right?
James Anderson 26:35
Yeah, no, it’s amazing that they still, I don’t know, like, where do they get off even saying that that makes any sense. And people actually listen to it or even reporting it for you know, they shouldn’t even report something. It’s, you know, it’s such a shame.
Jason Hartman 26:48
Well, I say that the next time you buy anything, just tell the vendor you’re buying it from that you want to pay the core rate next time you’re gonna restore the gas station, see if you can pay the core rate rather than the real inflation rate.
James Anderson 27:00
Very bad guy. Very good boy, Ray,
Jason Hartman 27:03
please. You spent a couple of years in Latin America where you really witness firsthand the dramatic effects of what happened in Argentina about nine years ago, 10 years ago. And Argentina. It’s interesting when you look at Argentina, because 100 years ago, Argentina was sort of slated to be like the world’s leading economy, possibly rich and resources, but they just it’s almost as if corruption in Central and South America is just it’s kind of just part of the personality.
James Anderson 27:32
Yeah, it certainly has been it’s part and parcel kind of everybody’s used to it.
Jason Hartman 27:36
Yeah, it’s really interesting. I mean, Argentina has just been the poster child for financial chaos. What did you see when you were over there?
James Anderson 27:45
Well, I went down there in 2003 2004. And I was down there for almost a year. And so the Argentinian Argentina they have they’ve had numerous bouts of inflation right and like late late night, In 80s, they had a hyperinflation there, then throughout the 90s, in the early 90s, they basically they pegged their peso with the US dollar one to one, and that will last me for like seven or eight years, where they just kept it one to one and worked out fine. But all the while they were basically, you know, just taking on more and more debt as a government. So people were living great, you know, they were traveling abroad, their pesos were buying and tons of stuff. And you gotta remember to in the late 90s, you know, a lot of people in Argentina, they’re like, second third generation European, so they’re going over to Europe, buying cheap euros with their pesos, because they’re just as powerful as dollars. And you remember, in the late 90s, our dollars could buy a lot of euros, right? So they lived a great time in the 90s. There was a great bubble of surplus there. But when I went down there, you know, that was a year or two after the crisis, a crisis happened at the end of 2001, early 2002, where basically, they had to break the peg, and they had to come clean with how bad the debt was. All the insiders in that country pretty much moved all their their capital outside of the system. They moved offshore and just put Parker funds in dollars or in euros. So they basically all the insiders basically tripled quadrupled their money because that they unplugged the peso to the dollar, it went from one to one to about four to one, and then kind of shook back three to one. So basically all the pensioners and all the people who’ve had their, you know, their dollars or pesos in the bank, even people dollars in the bank that the government made them, switch it to pesos and then devalued. So even those people got screwed over. So everyone pretty much that wasn’t in the know, got their savings, 30 or quartered. And the remainder, the people who did were inside, you know, quadruple fourfold of their money. So it was, it was definitely a sad thing. And people were angry as hell, right? You have people running around the streets, the banks were closed for about, you know, a month or so things weren’t working that well, a teams weren’t working that well. People got very, very violent there. people were killed in the streets. I think some of something like 30 people died. And then afterward, I think there was actually some starvation that occurred and rural parts of their country. So for me, I got there, I didn’t, I wasn’t there during the mess. But I came to see after the after the fact in 2003. So it’s about a year, year and a half afterward. So when I was speaking to people down there about their experience and their first hand experience, you know, what would come out would be two things, you know, it was basically, anger would come out and come right across of what the government had done to them. And then secondly, it was, you know, disillusionment with the current state of affairs of the country and the future potential, what would happen, they just, it’s, you almost get the sense of hopelessness. Like, it doesn’t matter. Even if things get better for a little while, they’ll do it again. They just, that’s all that happens. Right? So it was it was very sad to see and probably the worst part of it all uses a combination of, you see old folks having to get back in the subway having to go back to work. Those people should be retired. They worked their entire lives, and then a bunch of greedy people went off and, you know, fixed the game and stole their money, and now they have to go back to work. Where’s the justice in that? And then secondly, you have Kids in the street, you got little kids all around the streets having to pick up garbage at night. So you know, families can eat, you know, we have little kids picking up literally styrofoam in the streets, that kind of stuff. When you start seeing that, it’s, it’s just very sad, you know, to know that there’s some people out there who have no qualms to take, you know, advantage of people to where they have to live like that. So it was just, it was just an eye opener to know that he will exist and it’s out there and that it will it will act that way will treat people that way. And then you have to guard against it. You have to look out for it. And coming back here and living in the United States and seeing what’s happened, you know, when I started getting exposed with Ron Paul in 2000 7008. And you know, I had a little bit of experience with Austrian economics in college, learning about the fiat currency systems and the Federal Reserve and just kind of how this was all a bunch of Hocus Pocus. Basically, everything set up for the bankers to take advantage right. So for me to see it happening here in slow motion, it’s very difficult to take. So I guess that’s why I’m standing where I am trying to do as much as I can to try and get people Take some form of action.
Jason Hartman 32:01
Yeah. So in terms of protecting oneself, it just astounds me virtually every day how people James, they just, they don’t want to hear it. They they’re not taking it seriously. They don’t understand the urgency and I think precious metals is a good way to save money. It’s certainly a lot better than paper and ink with pictures of dead presidents on it, but people that I don’t know they it’s kind of amazing. And you and I and the people listening to the show, we get it. We know what’s coming. We know what has to come. We know what has to happen here. There isn’t a question of Will it happen or not, we know it will happen, it will surely come to pass now exactly when none of us can really say but we know what will happen here. People will lose their standard of living and it may be extremely ugly. It may be just uncomfortable. It will vary. Depending on how people have positioned themselves for the coming situation with inflation and so forth, but doesn’t it amaze you how some people I’m sure you talked to in your practice? Just kind of don’t get it?
James Anderson 33:11
Yeah, that’s a it’s a point that I always it’s hard, right? So like, about a month ago, right, I was out in Santa Monica here are actually on Third Street promenade. We were doing a little It was a by local event. So goldsilver.com we had our little display out there and we had public and this is you know, this is more or less your common person who likes to go to the mall, right? You kind of get the sense of the public it’s get this attitude like know it all attitude, like, Oh, I know it all, you know, and then you ask him certain questions like well, what what do you think this gold coins worth? And you know, you asked hundreds of people and maybe three or four people with no within $100 for gold spotless, and nobody knew what silver spot was. Right. So so you have this attitude of these folks think that they know it all. But really, the TV’s is what they know. You know, that’s it. They don’t read books. They don’t know history, you know, they’re just they’re just made to be taken advantage of it’s pretty sad combination too, though you gotta remember and there’s a lot of people out there who are in debt, you know, who whenever the subject of money is brought up, you know, bells go off in their head, they think, oh, no money, you know, they just start to feel like a loser anytime the idea of money comes up, right? So that’s one thing to also keep in mind. There’s just a lot of people who just don’t have any money. That is the situation that we’re in. There’s a lot of people in debt. But the amount of people out there who don’t know the fundamental reasons of why what’s going on, and I think a lot of is the attitude, they just don’t want to hear it or they don’t want to learn and it is frustrating. It certainly is
Jason Hartman 34:36
back to Argentina for a moment change. Your firsthand experience there is really interesting, one of the things that people are talking about and i think is rather likely as the government becomes progressively more and more insolvent, the numbers on the way the United States is behaving financially are beat on appalling. I mean they are just be on comp henshin how the interest on the debt is just going to just cremate the future of the country’s balance sheet. You look at like 45% of the people in the country now are getting government assistance. 42% are on food stamps, forgive me if my numbers are ever so slightly off, I’m giving general numbers. But these are just quick stats you hear and you’ve got a position where the balance has almost shifted to where when you get that sort of 51% tipping point, when 51% of the people are getting stuff for free from the government and not paying taxes, then they’re just going to keep voting themselves more perks and goodies and welfare and entitlements. And boy, when you get in that position, there’s just really no recovery, I think without severe severe consequences. And in Argentina, they nationalize the pensions. And I think that likelihood is pretty significant here where the government was Say something to the effect of maybe they’d engineer a stock market crash. And there’s the plunge protection team pulling the strings behind the markets, and they might engineer crash and come along and say, you know, for the public good, we need to put the pensions put everyone’s IRA under the control of the government, just like Social Security. And that’s the Argentinian plan. And they’ll just go and usurp people’s retirement accounts and say, Look at the government is going to take care of you. And we’re going to guarantee you a check. And I mean, gosh, the government’s resume is so wonderful on having managed Social Security so well. Everything else everything the government touches turns to disaster basically, do you think there’s a possibility in the US of A movement toward nationalizing the pensions
James Anderson 36:48
there is I mean, it’s quite a it is a threat. It’s something that is out there that could possibly occur, right? It I mean, the government nowadays has gotten so crazy, so rogue, I mean, they can they can confiscate your life if they so To choose, you know, if Obama wants you dead, he can have you dead. If you move to another country, it doesn’t matter, you know, they can just knock you off. That’s legally they claim to have that, right? They can spy on you. So there’s all types of things that could possibly happen, you know, and so you have to plan I suppose for a bunch of different scenarios, I wouldn’t put all my eggs in one basket ever. Because, you know, potentially the outcomes of this. There’s a myriad of factors a myriad of things that could happen, right. So, you know, if I was somebody who had everything in my IRA, you know, I might be a little bit afraid, because that potentially there is that that threat? It’s happened before in history, it certainly could happen again,
Jason Hartman 37:36
something everybody needs to be watchful for. I tell you, it really disincentivizes me to be putting money into my IRA, my pension plan my Sep because I’m just worried that that’s just too easily nationalized. And, you know, everything has to be an arm’s length transaction. So you can’t hold anything physical in that plan. It all has to be arm’s length away from you, which means you’re not really in control of it. So that concerns me. And you know, that’s one of the things I like about having some of my savings in physical metals. And I should say, just for the listeners sake, and I don’t know what your thoughts are on this, but my grandfather was a bit of a coin collector, and he suffered a home invasion robbery. Fortunately, he wasn’t hurt in any real way. But guys just came to the door with guns and the dog came at them and they just took the bite of the pistol and hit the dog on the head and caught the dog out and tied up my grandfather, my grandmother and took all the coins and I don’t think it’s very safe to keep this stuff in anyone’s house. I had Howard ruff on the show, and he likes this midnight gardener product where you hide it in the ground. And some people say the safe deposit box or the self storage unit or whatever, what are your thoughts on storage?
James Anderson 38:48
Yeah, that’s a that’s a great question. It goldsilver.com we give our customers a lot of options. Because that, you know, the obvious, you don’t want to put everything in one basket that goes back to that. personally. I think it’s It does make a little sense, I think to have some in your hand, right just in case of like a lightning bolt bumping, you know, currency crisis or something happens and all of a sudden, you know, the banks closed for a little while, it would be nice to have a little bit of money at your fingertips that as well as some cash, it makes sense to have a little bit of cash at home. You know, that way you don’t have to go chasing around trying to find a team that works. That would be the first thing to have some at home. If you’re going for a large investment in gold and silver. You know, like I said, diversifying where your locations are, it makes a lot of sense. We offer our customers third party vault storage. It’s the safest method of storing precious metals in the industry. It’s called federated vault storage. And it’s with third party companies. We work with Brinks in Salt Lake City and brings in Hong Kong and V mat in Miami. We bring on I think a Canadian one very shortly as well. But these are places where you know and I’ve been to every one of these facilities, you know, if you have your metal ship, they’re they’re stored there you get certificate signed by the third party manager. Whether it’s Brinks or via mat, it is fully insured by the Lloyds of London Marshall McLennan a few different other insurance companies sometimes, but they’re always insured. And it’s just a really safe and convenient way to have, you know, a good chunk of holdings outside of the banking structure. And it’s only one call away to liquidate it. Or you can always have a chip somewhere. For instance, if you have your precious metals sitting in Brinks in Salt Lake City, and let’s just say it gets very bad a couple years from now and you decide, you know, I have relatives in New Zealand or in Australia or England, I want to go live with them. You can you can have those precious metals shipped out of out of the united states currently. And you know, we’ve delivered over 40 countries. So having precious metals in segregated vaults, storage facilities with us, you can move it across border, if you want to. So it gives you some flexibility. It gives you a little bit more sovereignty than some than just having it all in your closet. Right. So that’s one thing that we really [email protected] we give our customers a little bit more of an advantage in that regard. For myself, I Kind of divvy, you know, I majority holding in a segregated vault storage? I do hold some at home. If, you know as we go forward, you know, it gets a little bit worrisome, you know, somebody kind of memorizes my face, you know, or whatnot and knows me.
Jason Hartman 41:14
Yeah. And I was wondering, could you give the listeners your address, please?
James Anderson 41:20
Yeah, won’t be long. It’ll probably be. I’ll be shipping that stuff off to Miami. Show. I hope. I hope
Jason Hartman 41:25
you will. After saying that on the air. Let me take a brief pause. We’ll be back in just a minute.
James Anderson 41:33
What’s great about the shows you’ll find on Jason hartman.com is that if you want to learn about investing in and managing income properties for college students, there’s a show for that. If you want to learn how to get noticed online and in social media, there’s a show for that. If you want to know how to save on life’s largest expense, there’s a show for that. And if you’d like to know about America’s crime of the century, there’s even a For that, yep, there’s a show for just about anything only from Jason Hartman calm or type in Jason Hartman in the iTunes Store.
Jason Hartman 42:19
But you know I want to just me Feel free to go on with what you were saying in a moment but before you move on too much James, I just want to play devil’s advocate with you on this storage stuff because sure I had Peter Schiff on the show quite a while back and he’s selling these Perth Mint gold things. So you keep your golden the mint in Perth and you get a certificate. Isn’t that just like having a stupid stock certificate or $1, which is fiat money, you got a piece of paper? I think the whole point of having metals is to have physical metals. Otherwise, why not just buy an ETF for a call next future or something like that?
James Anderson 42:56
Yeah, there’s two two. Well, there’s a bunch of things. First off, the metals are yours. They’re sick. Get it fully in your title, and they’re not goldsilver.com metals. So there’s nothing in the contract that would actually give us any type of leverage on your metal. For instance, my comic VM at Miami, it’s a to b, I call the the manager in Miami and I have a personal relationship with Him. And that’s, that’s simple. So there’s a lot of situations where it’s a to b, those are my metals, I shipped them off, they’re segregated fully, I can go visit them, if I want, I can have them shipped anywhere. There are different types of metals investors, there’s the person who’s the sort of I’ll call them the survivalist the person who thinks eminent disasters collapse
Jason Hartman 43:37
Well, for that person. And that thinking if that scenario happens, I don’t think the segregated vault or any kind of certificate is going to do anybody any good because everybody’s going to lock everything up and take it all for themselves. I’d you know, I don’t know maybe that’s just my crazy paranoia. And then there’s the person who’s just sort of the money investor who wants to make a good return on their money and doesn’t want to see their their dollar debased and they’d much rather see saves money and metals, which I couldn’t agree more it’s much better than dollars. And that’s a kind of a different kind of person. But in the in the event of real economic collapse, you want to have it on hand, right?
James Anderson 44:10
I think so. I mean, the idea that you want to have it in hand of course, because who’s who’s gonna trust everywhere you go, it doesn’t matter where you go, where you have Jason there’s always risk there’s little there’s risk and breathing the next breath. Okay, that’s life. So you can live in fear and go to the the bottom with some paranoia and think of, well, this, this, this would happen and I’d lose it all or what have you, you can really go to the far length with fear and then you really have no chance. You know, it basically if you have it in your hand, great. Somebody can rob you. If you have it in a segregated vault storage facility, okay, great. Somebody ended up taking it from there and confiscating your wealth or something, you know, there’s there’s no end to it, right. So what I what I propose was that you wouldn’t put it all in one place, right? Because the chances of it happening in all these different places, then, you know, that’s pretty slim. So and the idea that The rule of law which is completely fall put, and people are running around taking things for one another, that’s a little bit far fetched, I think, I think when people start talking about, you know, there being a breakup of society and and all of a sudden, you know, the rule of law is just completely out the window, and you’re gonna have to have your beads and your guns and go to the hills. No, no, that’s, you know, I don’t think that’s gonna happen. But are they gonna debate the dollar and 60 70% in the coming years? Yeah, I do. I think that’s, that’s where we’re headed.
Jason Hartman 45:25
So maybe let me ask you another question about what I think is a possible Ponzi scheme, and that is the Comix people that are buying certificate type metals on the COMEX. They make it very hard to actually take delivery and and that’s what like I’ve expressed already I like about a dealership like yours where you can take delivery of stuff. Do you have any thoughts on the ko Max, there are those who think that’s a Ponzi scheme that may be there, the metal isn’t really there to back up all the stuff they’re selling, maybe the metal behind all these ETFs and these other various funds, is not it doesn’t really exist. They’re just selling your paper.
James Anderson 46:01
Well, that spot price that you see every day. You know, like we discussed earlier, I think the clothes today around 4775. You know, that’s what the spot price is. Right? That’s, that’s the spot price on the COMEX exchange. And if for those of, you know, those of you out there who don’t know, but that’s where the, that’s where the spot price is actually made out of. It’s these different exchanges around the world. And, you know, there’s been people who’ve been out there and who have admitted the fact that the COMEX exchanges and the London bullion exchanges that Jeffrey Christianson of Jeffrey Christian of CPM group was on a video on YouTube, where he was, I believe he was giving testimony to some some folks in government and he admitted the fact that the the, the COMEX and London bullion exchange, they are leveraged anywhere from 100 to 140 to one somewhere in that area. And he literally said 100 to one I think about that.
James Anderson 46:54
Some real fractional reserve banking right there, right.
Jason Hartman 46:57
And that’s supposed to be the real deal. That’s supposed to really Money. Thanks, right? Yeah,
James Anderson 47:03
yeah, so what we have here is basically a big game of musical chairs and the music still playing in the comics market, it’s still playing under the London bullion exchange. But when the people you know, come rushing in mass to actually to come and collect their metals that they think is there, there’s only gonna be so many chairs. Right so the truth of this is, we saw it in 2008. We’ll see it again. The price in 2008 for silver and gold when the banks were floating. You know, there was a lot of deflationary pressure out there. So gold went down in price, so did silver, the spot price and silver went down to like $9. Right. But that was just the spot price to actually get physical in your hands. You had to pay a serious premium because the market is just not that much supply. You know, the industry. It’s just not set up to serve, you know, hundreds of millions of people you know, we’re out there looking to buy gold and silver at that time. It just it basically there’s only so much supply. So the spot price was at $9 in 2008. Whereas to get physical silver in your hand you had to pay like 14 1516 $17 I mean, Mike Maloney he, he made I was sitting there, you know, on the phone, he said, pull up eBay, we looked at eBay. There were Silver Eagles being sold on eBay in 2008 for 2025 30 $35. You know, I
Jason Hartman 48:13
looked that up myself and I think people would be crazy to buy this stuff on eBay. It’s usually a terrible deal. Hmm.
James Anderson 48:20
Yeah, it depends, right? It does it the market, especially when the markets climbing Yes, you’ll pay through the on eBay when the markets going down. And the interest isn’t. It’s not there, the price is going down. Only very intelligent people come in and buy when the price is going down. When the price is running up and running up and running up, you have crowds come in people who aren’t even doing their due diligence, people who just googled golden silver and now they’re ready to buy, they don’t even know fundamentally why they’re buying. So there’s a different crowd right? When the price is escalating. They’ll run to eBay and they’ll pay through the AI you know, they don’t care. They just gotta have it. Now it’s the next hot thing. So back to the point though, the point of this whole thing is that you will see in the future a day when the spot price will completely diverge from the physical Price. You mean it’s happening now, right? We talked about Silver Eagles, they’re sitting at 54 $55 when you’re buying them physically. And you know what I want to say to that ouch that premiums high, that’s a
Jason Hartman 49:10
lot it certainly is. The other thing is, is that you know, as this goes forward, and even now, when you go to sell a Silver Eagles, you’re fetching more than the spot price. And that’ll be the eventual where we’re going to head you’re going to see a gold spot price that might say 2500, and you’ll be buying gold at 3000 and selling at 2750 or something like that, you know, there will be a serious divergence between the paper and physical, especially in silver because there’s only so much silver to go around. And I’m sure I’m sure you’re aware of this, but there’s less silver for investors out there than there is gold in the world today. So the silver markets very small, it doesn’t take much to move it when people go rushing into silver, it advantages and the premiums go up for the physical. So you know in the future, we do expect divergence between the physical and the paper market to where the you know, the physical At this point, the physical market is really ruling the day. But there will be it’ll become more and more obvious as we go forward. We got to wrap up here. But one thing I’d like to ask you about James is, and I honestly, I haven’t found this to be very favorable for the investor. So you you alluded to it a moment ago. So I just want to ask you about it. Maybe we can wrap up with this topic, but I know that it’s easy for an owner of gold or silver to sell the metal but under what method and what terms because I checked around on that a few times and I had to ship my gold or silver back to a place so you know, I’m concerned about shipping First of all, but you can ensure that and then how do I know that when they open the package, they’re going to count the same number of coins that I counted when I sent it and they say well, this is all done with cameras and so forth. And and then after that they wanted a pretty big spread between what that day I had to buy it for and from what that day they would buy it for. It’s one thing to sort of, quote the price, but it’s another thing to actually have a liquid market where you can sell it. I mean, the nice thing about these stupid dollars is at least you can trade them, or at least for now. And you don’t Well, you don’t think you pay a premium when you buy and sell them, but I guess you really do what’s called inflation and taxation. But what do you say about the the, the ease of selling them and how,
James Anderson 51:21
what’s the spread? What do people really lose when they buy and sell gold and silver bullion? Sure, in the physical form, it’s not it’s not a type of investment that you want to like trade. Do you want to be a day trader and play in manipulated markets, you know, you should go for an ETF. But if you want to hold something outside of the, you know, financial industry, that’s real money, you buy bullion and, you know, depending on how much you’re buying and what form will depend on the spread that you’re gonna have to pay. If you’re buying a good amount of gold, you shouldn’t pay you know, spreads shouldn’t be more than 5% between what you’re actually buying and then what you can turn around to sell it with. You know, if you’re buying a good amount of gold, that’s all it takes is a 5% moving gold to break even Silver depends on how much you’re buying, right? If you come to a dealer to buy like 20 silver coins, it takes as much time for that dealer to service you as it does for someone else buying 20,000 of them right? Now, it’s the same thing. I mean, they gotta you got to put it in a box, you got to, you know, put all the stuff through their system, you got to get in line. I mean, it’s just take just as much time. So the spread between the guy who’s buying one tube of silver versus the guy who’s buying cases of them will be a little bit larger. I would imagine for a to have, you’re probably talking about 20 15% spread. Now, anybody who says, Oh, that’s huge. That’s ridiculous. Well, that’s fine. You can look at what happened in the last a month. I mean, Silver’s basically doubled in price. It doesn’t take any time for silver to move 10 to 15%. You know, you could literally break even before the box gets to you. And the same thing. I mean, if you’re getting a lot of silver, it can be in the single digits you can get down to 5% if you’re getting a lot So just to clarify it. someone buys a box of 500 silver coins and say they paid just for round number, say $20,000 for that and the spot price of those coins. is what is the spot price? Maybe $18,000?
Jason Hartman 53:04
Is that right? That that’d be fair. And then and then say it didn’t go up in value, say it just maintained. And then six months later or a year later, and then you know, the prices were the same, you were still selling the same box for 20 grand, and the spot price was still 18,000. So you guys are making two grand on that deal or not really, because you pay the mentor premium to that you get it right. But But whatever, you’re, the investor thinks it’s $2,000 premium. That’s what they see. And then they sell it to you. And how much are you gonna pay him for that $20,000 box?
James Anderson 53:34
Oh, well, on our [email protected] you see both prices, it’s printed there 24 hours a day, seven days a week and those prices are live, right? So you come to our website, you’ll see what it costs to buy, and you’ll see what it’s what we’re paying for it at that moment. And that doesn’t end will always be buying and selling gold and silver no matter where we are. Even at the tip of a market. It goes that way. So it’s published and it’s right there on the website for Silver Eagle. Like for instance, you were at that example where you said You know, 20,000 to buy the case, the spot price, you know, it’s basically 18, you know, you’re talking in terms of, for that case, you’d probably be like 18,500, that we’d be buying it back, we’d definitely be buying it back over spot. When it comes to all the products and bullying in the United States, the one that gets the biggest premium is the Silver Eagle both ways, you know, not just not just for the buyer. But you know, and I know people don’t like to pay the premium or whatnot. But that’s fine, you know, but if you if you go the wrong route, and you buy the wrong product, you’ll be regretting it the whole way through, you know, if you get something that has a weak Hallmark that nobody respects and you come to the table with that you’re going to get scoffed at and get a weak bit. For me, it just makes sense to go with products that everyone knows and respect and that you have various options to sell it. You don’t have to sell it to the same dealer you bought it from. You always want to have multiple exit strategy. You have to have multiple ideas of how you would exit this market. And you know, do it in a nice calm manner. But sometimes you never know it could be so busy at the end of this market. Some dealers or you can’t even get through the phone, right? So what would you do in that case, who you’re going to go to sell to? And if you have a product that only they sell, then is anyone else gonna buy it back? You know, those are the types of worries that can happen.
Jason Hartman 55:10
But I just want to I just want to clarify something there. So it sounds like the I’m gonna call them the closing costs on that deal of that silver box that we just traded. Right? It are about seven and a half percent, then
James Anderson 55:24
when you say closing costs, you mean well,
Jason Hartman 55:26
The cost to trade it back and forth?
James Anderson 55:28
By exactly the same day.
Jason Hartman 55:30
Yeah. Or a year later and say the price of silver didn’t change. So I’m, I’m paying us basically seven and a half percent. Those are my closing costs. My trading costs, right? Yep. I’m telling you storage fees for storing it, which is probably minimal. Good enough. What were you gonna say? And let’s wrap up, get your final thoughts. I just wanted to clarify that for the listeners because
James Anderson 55:50
I didn’t know if it was clear. Oh, it was just the final thought was that you know, having having hallmarks that everyone respects not just the United States, but around the world makes a lot of sense. So if there’s people out there who are really You know, interested in getting a tight premium close to the spot price, you know, just stick with maybe hundred ounce bars that are well known like Johnson Matthey, that type of thing. Sometimes people want to want to buy off off brand products that you know, then you have to go back to that dealer really to get, you know, a decent bid. Some other dealers might not even want it. So don’t pigeonhole yourself in a place like that. You want to make sure you have products that are well known and respected. So you have multiple options. Good point.
Jason Hartman 56:24
All right. Well, James Anderson, thank you so much the website goldsilver.com. I appreciate your education. You got some other great educational pieces on your website. And these are ominous times we’re living in and I think people have really got to be paying attention all of you listeners, please tell everyone you know, run around town and say inflation is coming. Inflation is coming because it is and we can’t tell you exactly when but all the signs are there and you better prepare yourself because you can be sorry if you don’t so James, we appreciate the insights today. Thank you so much.
James Anderson 56:55
Thank you tip of the cat for what you’re doing and it’s it’s very nice to be on the show.
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Jason Hartman 58:06
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