The Capitalist System’s Agenda with David Morgan

TWS 11 | Capitalism


Some say that many governments have tried various economic systems, but there’s nothing like capitalism. How true is that in today’s government and market? Capitalism is a financial system where goods and services produced are through supply and demand in a market economy. A precious metals aficionado armed with degrees in finance and engineering, David Morgan gives more precise and in-depth insights on the different types and principles of capitalism. In this world of chaos that we live in, The Morgan Report founder sheds light on the importance of being accountable and trustworthy in business as he critics the current monetary and market systems.

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The Capitalist System’s Agenda with David Morgan

We’re going to dive into some philosophy as it relates to capitalism. I have an incredible individual that’s on. His name is David Morgan. He’s an economist, a precious metals expert, a writer and is the publisher of The Morgan Report. David, thank you so much for joining me.

Thanks for asking me. It’s a pleasure to be with you.

I thought I’d start off because of your expertise as it relates to precious metals, how your perspective about the tenets of capitalism is maybe slightly different as an expert in precious metals than maybe someone with an economics degree?

I’m going to go through a stream of conscious, I’ve thought about what you asked. First of all, I adhere to pretty much the Mises Institute, so that’s the if you’re interested. There is a huge book called Capitalism that you can get actually download or get the PDF for free off of the Mises Institute’s website. There are a lot of critics about capitalism and I would say justifiably so. Every system has been tried and nothing succeeds like capitalism. First of all, you have to define it and I’m not sure this is a textbook definition but basically, it’s laissez-faire or the free market. There are a lot of people that say, “If it’s a free market, anything can happen. You have to have rules, you have to have regulations, you have to have regulators and without this you’re going to have complete chaos.”

You can’t legislate honestly. You can legislate it but you can’t do anything but enforce it. In other words, the market itself is the purveyor of right, wrong and good, bad and that type of thing. In a free market, the idea is the sound principle is that if I create something, I can benefit myself. Capitalists are selfish, yes and no. In true capitalism or idealize capitalism, I invent something because I’ve got this idea that’s going to save me time and energy, and it works. My neighbors come over and say, “That’s so awesome. I want one of those.” You build one for them and you barter. That’s true capitalism. Real capitalism or idealized capitalism, I am benefiting myself and society at large. This is the free market. I’m going to expand from this idea.

Let’s say in the real world, that’s the idealized world. We have a situation where there’s competition of capitalism. If I invent something, it works, I start to have a market, I get my neighbors involved and they all like it. One of the other neighbors says, “That’s a great idea but I know how to make that better,” and he does. Then basically, I’m more or less out of business or theoretically, I’m out of business because my idea has been made better and away we go. The market itself has determined, “This is the better product.” I want to take that theme and explore it a little bit. If it goes way back into the early days of self-entertainment, meaning the television but then this thing came out called the VCR, where you could actually get a movie and play it on your own TV.

There were actually two main thrusters there. There was the VHS and Betamax. Betamax was the far superior system than the VHS but if you had pure capitalism, the Betamax probably would’ve won out. In our society, we have something called advertising. If you can advertise something that might be inferior but convinced the majority or the consumer that your product is better for variety of reasons, you can have an inferior product take over the market, which is what happened with the VHS. This is another example because this one that hits close to home because I was all for the Betamax. When I went to buy one, the salesperson was nice enough to tell me, “Don’t, it’s not going to happen. It’s going to go the other way.”

TWS 11 | Capitalism


I want to point out some flaws to capitalist. Let’s go to non-classic Liberal. In some cases, they’re justified because there are people out there that only think of profit. They are greedy and basically run scams. It happens but again, you could legislate in a way and say, “You can’t do that.” In an idealized capitalism, if I make a product and it’s an inferior product, no one’s going to buy it. The market itself is going to give me true feedback and I’m out of business because word gets out. I might think that the product, but if I think it’s great and the market doesn’t, it’s useless. That’s where the real free market will work if it’s allowed to. People have this greed thing. This is probably something out there, I don’t know if I’m inventing this word or not. I’m sure it’s out there somewhere but I would consider conscious capitalism.

Conscious capitalism is where you actually take into the large picture something like the Native-Americans and the Chinese purportedly where you’re looking out four or five generations. You’re saying, “If I build this product like this, is this to the highest and best good of all involved?” Take off on that thing and hopefully you can follow my train of thought. In this day’s capitalism, there’s built-in obsolescence. You have an automobile, a washing machine, a refrigerator or whatever. A lot of these products could be made better. Meaning that they don’t have to have built-in obsolescence. It’s possible. An automobile, it’s not a good example but a refrigerator washing machine and stuff, they can be built to last 30, 40 years fairly easily.

Of course, they’re machines and they can break down and need repairs but overall built-in obsolescence is morally correct or morally incorrect. That’s a tough question. In our view of capitalism, if I build this VHS tape player and it only lasts five years, then I’ve got a market every five years because people are going to go back and you’re going to get a newer one. I have my business model so that I stay in business. If you’re a conscious capitalist, “I’m building this thing that’s going to be so good that this is going to last a lifetime.” I have to build it one time. That’s a much better use of resources. This is more conscious capitalism, more than driving out where you think it through and I could take it on a tangent if you don’t mind but this is more where the Millennials are going with the minimalist idea. That I only need one of these things, I don’t need twelve.

I only need one set of dishes. I only need one set of glass or only one set of coffee mugs. I like that idea because, we speaking to the society at large, have become brainwashed or the propaganda has got us to such a degree that rather than take what we need, we’re constantly taught what we want. Our want can never be satisfied because we always want the next iPhone. You’re taught this. In your heart of hearts, you may actually realize it doesn’t matter. It functions the same. There’s not much difference between my six and the ten. I’ve got a six and I don’t want upgrade it but that’s the idea. We’re built into this obsolescence, consume, consume, consume. Whatever I’ve got, there’s a better one coming out and I must have it. These ideas are not necessarily capitalistic ideas. They’re more bet on the propaganda machine from Mr. Bernays and teaching people what they think they should think rather than use what I call conscious capitalism. I said a mouthful. I’m sure you’ve probably got some ideas throw back at me. I’d love to hear your thoughts.

I would say the premise of humanity is that we have fallibility. We make mistakes. We make wrong calls. We have a unique perspective. Everybody has a different perspective of the world. We operate off of that, but it doesn’t mean that the other person’s perspective. I look at capitalism and the framework itself is the exploration of what you think and figuring out a way to do well, to appease that self-interest exchanging with others. Equally, as capitalism can create a lot of wealth, it equally could destroy wealth. A person may have the right idea but they bring that idea to the marketplace and to them it was a good idea but nobody else thinks the same. I think capitalism goes both ways. It appeals to both sides of humanity, our side which is brilliant and can bring value.

If you don't profit, then you're basically out of business. Click To Tweet

In the process of trying to figure that out, when we do fail, it has to equally support that. As I’ve thought through this concept and thought through some of the things that you’re saying, in the end we have to believe that. We have to believe that there’s going to be success and there’s going to be failure. Ultimately, as you brought up laissez-faire capitalism, it’s one of those things where the equality is essentially the equal protection of individual rights. I think capitalism is definitely confused. There are multiple definitions and it depends on who you’re asking. Warren Buffett has a definition for it. Everybody has all their definitions of it.

Fundamentally, I think it’s pretty simple if people would actually take time to research it and it’s understanding that, we as humans have shortcomings and we also have this notion of self-interest. It’s figuring out what is the right system in order for those tendencies and instincts to operate. That’s where I go to, whether it’s Mises and there are a lot of others like the Austrian school but there’s also the Chicago school too that understood some of the primary fundamentals of capitalism. It’s one of those things where it’s reasonable to expect that system would work now as it was assumed to work 100 years ago just because of how much perception says we’ve progressed.

It’s been corrupted so much. Most of what we called capitalism is crony capitalism. Rather than go out and let the best product win in a real free market where there’s competition, they have a defense contract, which is a good example where it’s basically favoritism and political infighting. Who’s got the best lobbyists in Washington, DC to get a given contract during a given weapons program? It might be an inferior product but in real capitalism rather than the government funding and even the startup or the initial, let’s say piece of equipment or a piece of hardware, the entrepreneur wouldn’t have to go out and get funds one way or the other. Maybe they had a big success and had a lot of capital like Howard Hughes and they want to make something.

They have it within their own means to create something new and then there’s someone else that’s a competitor that raises funds. The market would decide which is the best. Like a foot race as a metaphor, this piece of hardware versus that piece of hardware, which one function the best, which one has the longest life and which one is easier to repair? We don’t have this anymore. We have a very small amount of it. There is this true free market capitalism in existence, yes but it’s rare. Most of the stuff, especially when you get government bigger and bigger has to do with who you know and this is called crony capitalism. It’s who you know, it’s what political cloud. It’s your district. It’s like, “We’ve never gotten funds for this. We should give it to them because they need to bring up their standard of living in this part of this district, of this town, of this state.”

TWS 11 | Capitalism

Capitalism: Every system has been tried, but nothing succeeds like capitalism.


It goes and it all sounds well-meaning but it doesn’t serve everybody to the highest and greatest good. The highest, greatest good is one capitalism and its real free market form and the market determining who’s right and wrong. I remember one of my earliest interviews I ever did on the internet is capitalism. It guarantees the right to succeed and the right to fail and that’s part of the process. I’m going to pick on Elon Musk. I don’t know him. I’ve seen him on TV, the internet and I heard him speak. He’s obviously quite brilliant. If Tesla was a true free market where he wasn’t subsidized, it would have failed. I’m going to add onto that. You can have a great idea who is ahead of its time, which means that you can have this electric vehicle from his Tesla motors and you can’t raise the capital and you can’t make it profitable.

Unfortunately, capitalism is based on a profit motive. That’s the way it is. If you don’t profit, then you’re basically out of business. We have crony capitalism, subsidies or whatever. He gets pushed. We need electric vehicles. It’s great and it’s wonderful. We’re going to subsidize them. He may have been ahead of his time where it wasn’t profitable at that time. He goes back to the drawing board and says, “I created a luxury car and it’s too expensive. I’m going back and I’m going to reinvent this thing. I’ve already got the basics, I’m going to go and I’m going to make the beetle, the initial Volkswagen of the EV market. That’s going to be my initial Tesla product.” It comes back out and the market’s like, “This thing is only $13,000. Are you kidding me?”

I’m not trying to pick on Tesla but everyone’s familiar with it so they can understand what I’m saying and get a picture in their mind. This is the idea of real free market capitalism. He might have failed temporarily and gone back. What does the market need? They’re awesome but is that what the market needs? What if the market needed a $17,000 EV that’s got a 200-mile range and everybody loved it? That’s what the market needed. The market comes out like, “Holy moly.” He’s only making, let’s make up a number, $1,500 per vehicle but he’s selling $12 million the first year.

There are two thoughts I have. The first one is agree with you. You look at whether it’s Amazon who is putting retailer after retailer out of business or it’s a Tesla that’s completely disrupting the auto market. Those markets were already manipulated. If you go back and look at how much GM has suffered through the years and how much political clout that they’ve built and spent. That cycle goes on forever, the unionization and how that has affected certain things. The second point I’m trying to make is our whole system has these elements of capitalism but the whole system is not based on it. This system is based on this cycle, which I think academia is part of it. You have funding for academia which bids up prices of tuition. You have students that are trained to be workers because of how our school system is set up based in the Prussian system.

Energy is a very important asset to own. Click To Tweet

You have the government that’s involved at local levels, federal levels in pretty much everything as far as who they’ll fund, what they will subsidize and what they’ll back. This entire system has been based on that vicious cycle and because of the capital markets, whether it’s leveraged by the Federal Reserve because of loose lending standards. You have a whole system which is based on these fundamentals, which is in capitalism. Still, I look at some of the fundamentals of capitalism very well would have prevented a lot of what we’re experiencing right, which I think there’s a lot of good stuff. There are also some things to be concerned about. I’m trying to figure out, where we haven’t had necessarily sound money for 50 years, 71, I believe. We never had capitalism so knowing that, what do we do? How do we understand what’s right, what’s wrong and how to understand what we do to live a fulfilling life?

I look at the study of economics and the study of capitalism, the free market system. It’s being aware of what those principles are. A lot of the unintended consequences, a lot of damage hasn’t occurred yet based on some of how our economy works but it’s ultimately going to occur whether it’s one fell swoop or whether it’s in pieces, it’s still going to happen. The awareness of these principles will allow people, to understand what to do when a lot of the chaos starts. In the past, what has ultimately been done? It’s, “Government should take care of it. I’m not responsible for that. They should take care of it. They’re smarter than me or that’s their role.” Other than that, I look at what capitalism was as far as the intention and the principles around it and what we have. I think there are some stark differences. At the same time, the notion of capitalism is still very much alive in everybody. It’s part of our instincts.

One of the fundamental principles of capitalism is property rights. You have the right to your own body. You have the right to make a living. Let’s go to a real baseline example. Let’s say we are somewhere in the 1800s and you can own land by staking it for example and you go out and you build a cabin for shelter. That is all by your own labor. Do you own that or not? On capitalism, of course you do. It was your labor, your ingenuity, you designed on a piece of paper or both and you made it. You took something that was raw, which was land and trees, you converted it into something more meaningful and of higher value. That’s an example of property rights and without that, capitalism breaks down. The idea that, “You made it but I need it more than you do so I’m moving in, you go build another one.” This is absolutely fundamentally anathema to true capitalism but this is the idea of socialism, each according to their need. I need it more than you do because I can’t work and you can or I’m too old to build one. I get it, you don’t and that’s the way this is equal. This is fair. This is what’s right.

This is a concoction of the mind is what’s fair and what’s right. To harp on it, the real capitalism is determined by basically competition and by the ability of someone or someone’s company corporations or whatever. What happens when these systems break down? This is not unusual. I want to assure everyone that there are cycles through the monetary system. It’s happening again and again. We’re in a situation where certain times in history, you have the fundamental philosophy breaks down and the fundamental philosophy is trust. What can we trust? Can we trust these big corporations to do what they say? Can we trust the government to do what it says? Can I trust my company to provide me the pension that it has promised me? Can I trust the city to pay me the pension that it has promised me?

TWS 11 | Capitalism

Capitalism: In most of today’s capitalism, there’s built-in obsolescence.


What happens in a corrupt system which we’re in and have been for quite some time, is the trust starts to be questioned. First by the intelligentsia, the intellectuals or whatever, I’m not trying to differentiate. People are different. Some are deeper thinkers, some look ahead and some don’t, some don’t care. It’s something the government should care take care about. I don’t have to worry about it. The company should do it. I worked for you. All I have to do is collect my check but you cannot overcome Mother Nature. There’s Mother Nature in the marketplace and the more you distort the market place, the more you’re going to have a price to pay. This is cyclical. This isn’t something that’s just unique to our generation. The trust breaks down and the confidence breaks down. The whole system is based on confidence and the whole system is a lie because the idea is you can’t print wealth and you can’t.

If you could print wealth, Zimbabwe would be the richest country in the world and everyone would be down in Zimbabwe because they’ve printed their selves as one of the wealthiest nation on the planet. America pretends that you still can print wealth and we’ve been doing it for a long time and we’ve gotten away with it because of the reserve currency of the world that’s basically enforced our currency on everyone else that must accept it. The people that must accept it of course use it because it works still to some degree. At the top, what Mises calls the crackup boom more and more people in the market place start to question, what is the viability? What is the long-term confidence that I have in this piece of paper, in this idea, in this unit, in this thing in my account? That starts to break down and it’s already breaking down. In fact, it broke down to such a degree in 2008.

We’re a cat’s whiskers away from having to complete financial collapse. Most people don’t believe that. I’m not saying that to gain points or to scare people but it is a truth. Most people are unaware of actually how close we came to a complete collapse. The reason I say complete collapse is because when the banks give up the trust of each other, which had happened, then the whole system would freeze. As Jim Rickards says the Ice-Nine situation. He used the metaphor where everything freezes up. We’re very close to that. The only reason we didn’t freeze up because it was starting to happen, the ice was starting to freeze. It was starting to take off and the Fed intervened and said, “Bank A don’t trust Bank B’s paper. Bank B doesn’t trust Bank A’s paper. Here’s what we’re going to do. We’re going to buy all this worthless crap, we’re going to give you treasuries for it, the most trusted paper out there.” That kept the system from freezing out but we’ve got very close.

The next time, will the Fed be able to intervene, paper it over, make it better and all of that? The answer is no one knows. I don’t know. You don’t know. No one knows but the game is getting very near the end. The main thing to watch of course is the bond market, the debt markets and credit markets. Do you trust that dollar to be worth enough in the future for you to loan it for a given period of 6 months, 2 years, 5 years, 10 years or 30 years? It’s breaking down and yet the system isn’t allowed to function as a free market would. In a free market or a true capitalistic system, the right to succeed means the right to fail. The bond market would fail and these bonds would be marked to market.

The government produces misery most of the time. Click To Tweet

They might not go to zero but it would certainly be worth less than face value almost across the board. This, of course, is allowed to happen because of the powers that we are able to basically buy up their debt. They could come in and buy up their own bonds, issue currency for it and keep the game going. Eventually, it gets to the point where enough of the market says, “I don’t trust what that dollar is going to be worth in the future. I’m going to spend it for something that’s a hard asset that I can maintain value and I am going off these dollars. I want to get rid of them because I’m not sure what they’re going to buy a month or a year.” This takes place over and over throughout the world. It’s happening in Argentina. It’s happened in Valenzuela. It’s all over the place. There are so many times it’s happened. The idea that it can’t happen in United States or the world currency, the US dollar is preposterous. This actually is happening but most people don’t recognize it. That’s what we see. Philosophically, it’s a loss of confidence, loss of trust and once that’s lost, it’s very difficult to get it back.

One of the points was this notion of accountability. That’s what you were saying when it comes to trust. Part of that human element that we have is some people don’t tell the truth and some people do it consciously. Some omission and commission. It’s one of those ideas where, what is this the standard way to protect everyone? It’s to have something that doesn’t attach to a human being that can be used as a unit of accountability. That’s where precious metals because fundamentally it’s very difficult to manipulate. You can’t create gold out of nothing. That’s I think the fundamental premise but we’re way beyond that.

We’re in this environment where the United States is that beacon of trust when it comes to any financial exchange around the world. Whether the reserve currency or whether because we have the biggest military force or whether it’s our influence on goods and so forth. It allows making sanctions at other countries. It allows us to throw weight around but in the end it’s a fallible unit of trust that we have. I was curious to understand your perspective and understanding of precious metals at a very deep level. How do you balance that with what our current system is, which is operating around the same thing in a sense like trust? That’s where the accountability is. At the same time, it’s not a completely objective trust.

I want to hold that thought but you did a great job on why the dollar still remains where it is, is it the military forces? One thing I’d add to that as the Rule of Law. The other nation states don’t necessarily operate in the same standards of the United States and also used to. The reason it is that the rule of law is breaking down. The reason there is the legal system in a lot of ways is due to business and contract. If you didn’t meet the contract, then there’s a legal remedy but that also is breaking down. The loss of confidence goes to, “What can I have confidence in that will see me through financially?” The answer there is primarily gold. Gold has stood the test of time for thousands of years. Ups, downs and in between and the value does vary but nonetheless, it never goes to zero. It’s always coveted, especially in times like these where we’re unsure of what that dollar is going to buy a year out or ten years out or whatever.

TWS 11 | Capitalism

Capitalism: The society at large has become brainwashed or the propaganda has got us to such a degree that rather than take what we need, we’re constantly taught what we want.


You’ve seen the banking system actually had the largest purchase of gold that they’ve had in I think eleven years or something. It’s a massive amount that they purchased relative to what their purchase has been in the past. The public is burn out on the gold story. Gold went higher year over year for eleven years straight. That’s a pretty darn good bull market. That peaked out in 2011 and here we are years later, it’s been going sideways to down. We found the bottom, I believe. Even the gold bugs had given up. The thing about gold is I think a big misunderstanding about it. Here’s the idea that I have and it’s pretty simple. One is you buy gold, you sleep better and you forget about it. You own it because at times like these it’s a must if you can afford it.

The other part is you buy it because you want capital gains. You want to have a better life, you want to see the price appreciation so good relative to when you bought it you can basically improve your lifestyle. There’re two types of gold purchases. You have people that understand that by some enough for their protection, which is generally thought to be 5% to 10% of your overall net worth. It could be as small as 2%. It’s basically what makes you comfortable and forget about it. That is not the vast majority. Those are the true gold bugs. Most of those people don’t consider this to them gold bugs, they consider themselves smart enough to understand the nature of fiat money to hedge. The vast majority are looking to trade it or swap it or whatever make these big gains on it. When gold doesn’t perform within a certain timeframe, then they’re very disappointed.

Silver is even a different story. Silver as Professor Jastram called The Restless Metal. As he wrote that book, you looked at silver’s relationship to commodities over a vast period of time like he did with the gold constantly. He looked at gold the same manner. What he determined was that gold basically is the ultimate money and regardless of conditions, especially during depressions, gold was the best asset you can own. Silver was mixed. Some other time during the depression, silver actually did well, sometimes during depression it didn’t. Silver, the conclusion of the book was during inflationary times, nothing outperforms gold. We saw that take place when QE2 was announced, when QE1 took place, the market acknowledged where we probably need it. We saved the banking system. We’re going to get back on track.

When QE2 was announced, most of the people that are monetary savvy said, “Here comes the inflation.” The problem was that all those savvy people and yours truly included and I traded that market did very well but none of that money, none of that QE hit main street. It only went to Wall Street. Basically, it was static money. It was sterile. It was there but it was all printed. It went to a vault and stayed there. It didn’t circulate. It had no velocity. It didn’t have any meaning in the marketplace. Once that was made clear to the market, the price of silver basically crashed. Most of us, myself included thought when it was announced that we’d see the velocity of money increase. We’d see it hit main street but didn’t. That’s been the story ever since. A lot of forces going back and forth.

The only thing that you can control and influence is your awareness, your knowledge, and your understanding of how the system works. Click To Tweet

The idea that I think was the best that I can give to the public at large is, take the attitude of someone that buys gold, silver or both with a comfortable amount and go about your life. You can pretend that we’re not going to have a financial collapse. I think we will. I think it will occur in my lifetime but you don’t want to harp on it. You don’t want to live your life thinking about it. All you need to do is be hedged but most people that learn this think, one is going to happen. It’s almost imminent and that the only asset class to own is this one. That’s poor thinking. Energy is a very important asset to own. If you’re a capitalist as far as, “Where can I put my money and make money with it?” What is the one thing that’s gone on from 3,500 BC where have been 14,000 wars since there has? If you want to invest, buy defense stocks, buy Lockheed and the war machine continues. Chris Duane calls it the Debt and Death paradigm and he’s correct. Unfortunately, that is the real world that we live in.

I look at the complexity of the world we live in and it’s interesting. I would say at the same time you look at how concerned you could be looking at debt clock. You’d look at that and it’s like, “This thing’s going to pop tomorrow.” You also look at humanity and how much they’ve taken ideas and done some brilliant things with it. It’s one of those things where it’s always been the case with humans. There’s always been good stuff that’s going on. There’s always been some bad stuff. It’s trying to figure out how to keep a balance of it. As much as there are a lot of ways to be concerned, there’re also a lot that can be celebrated to an extent. I’ve stood back and I’ve said, “I don’t know what the future’s going to hold. I love your point about trust. People especially in times of difficulty will seek trust but they’ll seek something that they trust. Somebody or some group of somebodies failed them and did things that weren’t trustworthy.

They’ll seek trust but in the end it’s an awareness of how people work. It’s also an awareness of what principles are. I know that there’re some principles to capitalism that still are extremely relevant when it comes to personal freedom, personal capitalism. Which is taking who you are and what you know and doing something with it that’s of value to somebody else. If that is claimed, you definitely want to be aware of questions to ask and a good foundation of knowledge so that you know what they’re talking. There’re so many different definitions of capitalism. In the end, I look at it being an incredible time to be alive. It’s understanding that when you go against principle, there’s probably some sayings around, when truth or principles followed what the result is going to be. It’s going to come home to roots.

These are decisions that are unprincipled and they are decisions that have to have a price paid for them because failure means loss. There’s lots of different failure being papered over, whether QE, what the Fed’s done, government policy in general but there’s a lot of failure being deferred. It’s being aware of how to position yourself both from a business standpoint, from a personal standpoint, from a money standpoint, so then when those corrections happen, you know what to do. You’re not operating out of scarcity and emotion. You’re operating out of awareness and knowledge. That’s the most that we can do in the end.

TWS 11 | Capitalism

Capitalism: What can I have confidence in that will see me through financially? The answer there is primarily gold.


Maybe we’ll do a little bit more a philosophy. The idea of founding the nation, you can work capitalism into it and the idea of property rights that we already discussed is the rights of the individual. In a constitutional republic, the rights of the individual are protected. Democracy actually comes from the word mobocracy which is mob rule, majority rules. In the constitutional republic, the rights of the individual are preserved. That’s key in a way that the system was set up initially because that protects someone to have the right to not only free speech but free thinking and motivations based on their own personal goals. If in an idealistic world, if you have an idea and make something of value to you and the market says we want it to, you can become rich. There’s nothing wrong with that, at least from my perspective.

The whole thing has been usurped and corrupted by such a degree that people don’t even seem to understand how the system could work. If you go back to the financial failure of 2008, in real capitalism all those banks that were over-leveraged would have failed, not only Bear Stearns and Lehman Brothers but many others. In fact, AIG would have failed. AIG that insured all of these CDOs, all these swaps and everything else is out there in this derivative Never Neverland couldn’t make good on it. The backing of full faith and credit means that everybody that’s a taxpaying person in the United States is responsible but why are they responsible for a bank’s failure? The banks should be held accountable. It comes back to your accountability. Who’s accountable? Let’s make the people accountable. This is what most people don’t even understand. They didn’t have a clue. They think the government actually produces something. The government produces misery most of the time.

The reason of the misery is because the failure of those institutions are put on the backs of the people. It was subsidized by you. If you’re a US-taxpaying person, you’re the one that’s paying for that failure. It’s not the government paying for it, you are but this is a concept that most people don’t even get in school. I don’t think it’s even taught anymore. It comes to accountability. Who’s accountable? If you go run up to your credit card and you can’t pay it, then it’s your right to put it on your uncle because after all, that’s the way the system works. He’s more capable of paying it than you are. Let’s swap it over to him. That’s basically what’s taking place. Most people are so under-educated. I don’t want to offend anybody but I’m not here to sugarcoat it either. You’re responsible, why are you responsible? You shouldn’t be, the bank should be held accountable, but they’re not.

This is one of the biggest problems with the system at large and this is why the distrust in the currency goes to the next level. The velocity of money starts to pick up where people would rather own a jar of peanut butter that they know that’s cumbersome. I see inflation in a much higher level and many do. John Williams, I have him on my mastermind series about once a year. I read his work. The hamburger index and everything else are going off down a rabbit trail. I’m not a big fast food guy. I try to eat healthy most of the time but occasionally I do it. Here’s my point. A basic meal is $12 in there. I couldn’t believe it has been such a long time since I’d been into one of those places. I thought I misheard the guy. I thought I ordered two meals but this is real inflation. This is what mom and pop in America are facing. I think the inflation rate is squeezing a lot of people and it’s evident across the board.

Money is important but you don't have to make it the center of your life. Click To Tweet

You’re right but here’s the thing. Nobody knows what that means. They see higher prices, they hear the word inflation, but they have no idea how it’s created and why it occurs. It’s not a natural phenomenon. It’s like, “Why are prices going down? Isn’t that a good thing?” but yet prices are going up. It’s a fundamental question around, “Why is bed policy for things to become 3% more expensive every year? Why is it 3% less expensive?” I was in Walgreens. I had to renew my passport. I heard this older woman at the counter and she was buying makeup and she was stuttering. She didn’t know what to do. She was like, “I can’t afford it.” She didn’t pay for the makeup. She paid for some other things. People are experiencing it, but they’re not aware of what it is and why it’s occurring. That goes to everything that we’ve been talking about, which is the current monetary policy is fundamentally flawed. It’s not trustworthy but yet people are trusting it. It’s not going to be this slow process. Everyone’s buying stuff and exchanging and it goes really quick. The only thing that you can control and influence is your awareness, your knowledge and your understanding of how the system works. When things start to happen, you know how to respond to that, not react.

I think one of my main job for the public good on a global basis is to teach these principles to the people and have an understanding. Then they can go and take an action, or not take an action but at least they could explore. They don’t have to take my word for anything. Look it up, do your own research. Do some reading. Look at the grand inflations of the past. There’s so little awareness and that’s the reason there’s such a small market for the gold and silver markets because most people have no idea that they preserve wealth and there are financial asset for thousands of years. If that was well-known, you’d have a lot different percentage into those metals than you have now.

One of my most popular videos called Myths in the Silver Market. One of my pet peeves I said in the video was this idea of most of the coin dealers or precious metals dealers that you will talk to, especially those that are more established than I am. I’ll tell you why I think everyone should own a little. This goes back to the idea we talked about that everyone should know a little. What people don’t understand is how few people actually take action. In that example on this video, I said at the time the mining activity was roughly 700 million ounces a year on the silver market. If everyone in the United States owned two ounces of silver, which is very little. It’s $30 worth. It’s not going to change your life. Two ounces of silver, believe it or not, goes to $100, it won’t change your life. It goes to $1,000. It might change it a little bit but it’s not changing your life. It’s a little warm up.

If everyone in the United States bought two ounces of silver, it would take up the entire mine supply on an annual basis. The United States is only 5% of the world’s population. If we include everyone, the other 95% of the people on the planet should own a little. There isn’t enough silver for everyone is my point. Yet, so few people own it or understand it and it doesn’t have to be silver, but silver is a good example. It is my specialty and I enjoy a lot of aspects. If you go back to 1980 at the top, most of us think that the amount of gold in portfolios of roughly 2% maybe 3% and now it’s about a half a percent. If we went back to the 2%, we need a four-fold increase in the amount of gold demand that we have right now. Think about that. Think if there was a four-fold increase in demand for gold, the world would be a better place.

TWS 11 | Capitalism

Capitalism: In an idealistic world, if you have an idea and make something of value to you and the market says, “We want it, too,” you can become rich.


This has been fascinating. I know we could probably keep going and all on all of this. I look at as an expert in a certain field. Historically, it has been pertinent to understanding money in general. Looking at where we’re at now, I’m sure you’re as surprised as I am. The more you learn about how the monetary system works, the more you learn about business cycles, especially if you understand about the Austrian business cycle, which shows that the Central Bank is at the hub of financial collapses or financial corrections. We’re well beyond what is reasonable but at the same time we’re still kicking along every day. The future is going to be bright, but also the future is going to be very volatile I think because of the technology that’s coming online. I also think because of how connected the world is becoming, how many people are joining the internet and becoming connected in emerging markets especially.

It’s going to be interesting to see how things transpire. I still cling to my understanding of financial principles and monetary principles in essence. Even though they may not be the clearinghouse right now, it’s a deferment of what should be clearing right now. If you understand that, you’re going to understand what those signs are when things start to get volatile. I also step back and say, “That could be totally wrong.” Who knows? They can maybe come up with some new principals. The modern monetary theory is absurd. People are advocating, some of these don’t make any sense. In the end it’s what can you do? It’s becoming aware and becoming educated. With that being said, I’ll give you the final word. Then would you mind giving out your contact information, your website, your YouTube channel, social media, so people can start following you?

First of all, money’s important but you don’t have to make it the center of your life. Most people think about it almost constantly, especially if you don’t have enough. It is part of life. There’s probably a better system out there. As it stands now, there’s nothing better than a true free market capitalism. It’s been proven over and over again. Where we are going to go in the future is very interesting because with this Modern Market Theory, which is preposterous, but I have to say with the advent of the digital currencies, which is basically everything that’s on your VISA or credit card and the advent of the cryptocurrencies. It’s not inconceivable to think that you could create more something out of nothing, ad infinitum and keep this thing going a lot longer.

I’m certainly open-minded enough to see that that’s a possibility. It’s unlikely, but unlikely doesn’t mean impossible. As far as getting ahold of me, the best place to go is our main website, which is If you’re interested in my new project, there’s a webinar that you can get for free. The URL is We’ve broken it up. I think it was about an eight-hour lecture between me and some of my colleagues. They’ve got it toned down to about an hour and a half. As far as social media, I am on YouTube, I’m on Twitter. I do have a Facebook presence. The best thing to do is type in any search engine, David Morgan Silver. If you type in David Morgan then the word Silver, you’ll find the LinkedIn, you’ll find the YouTube. You’ll find all of the social media.

David, it was an honor to have you on. Thank you for sharing your wisdom and everything that you’ve studied for so many years. It’s been an awesome conversation.

Patrick, I appreciate having a conversation. Thank you.

Important Links:

About David Morgan

TWS 11 | Capitalism

David Morgan is a precious metals aficionado armed with degrees in finance and engineering. David considers himself a big-picture macroeconomist whose main job is education—educating people about honest money and the benefits of a sound financial system. Besides being an author of three books dealing with precious metals, he is also a much sought-after public speaker. Additionally, he consults with hedge funds, money managers, and mining executives.

His ideas can be seen in the movie Four Horsemen, a Feature Documentary. Available for free at

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report, and numerous other publications.

Additionally, he provides the public with a tremendous amount of information by radio and at times writes in the public domain. You are encouraged to sign up for his free publication which starts you off with the Ten Rules of Silver Investing where he was published almost a decade ago after being recognized as one of the top authorities in the arena of Silver Investing.


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The Coddling Of The American Mind And Learning To Evaluate Ideas with Andy Tanner

TWS 10 | The Coddling of the American Mind


Together with Andy Tanner, we read deeper into Greg Lukianoff and Jonathan Haidt’s book, The Coddling of the American Mind: How Good Intentions and Bad Ideas Are Setting Up a Generation for Failure. Andy is a renowned paper assets expert and successful business owner and investor who also serves as a coach over at Rich Dad’s Stock Success System. He pours out his thoughts and insights over what he thinks about the good, tackling how we draw the line when thinking until when protection and safety are always good and whether or not pain is bad. Andy gives a lot of important points to think about, emphasizing the ability to learn how to evaluate ideas.

Watch the episode here:

Listen to the podcast here:

The Coddling Of The American Mind And Learning To Evaluate Ideas with Andy Tanner

I’m here with Andy Tanner. We are going to be discussing as a follow up to Greg Lukianoff‘s podcast called The Coddling of the American Mind: How Good Intentions and Bad Ideas Are Setting up a Generation for Failure. It was interesting as you had posted something on social media and put the idea there which is what coddling is and what it isn’t. I happen to be interviewing the author.

I’ll get a book recommendation from Patrick because he’s always reading fascinating stuff. This one, we both were reading independently in kindred minds.

Thanks, everyone, for reading. How did you hear about the book?

The Rich Dad advisors, we do a book every six months and this one wasn’t in it. Robert had come across it and said, “Here’s another one.” We didn’t study it formally. He has a lot of books. He’s an insatiable student. He reads as much as anyone I know. He’s always got a book to recommend. I picked it up and started with the audiobook while I was on the treadmill. I found it fascinating because of the roles we have in our life as entrepreneurs, investors, coaches and parents. The one that hit me probably the hardest was the parents. When I thought about it, sometimes when you read stuff and you feel a good vibe on it, I always say, “Am I feeling a good vibe because of confirmation bias?”

In other words, “Do I believe this stuff and this guy singing my song? Am I reading it because it’s articulating a belief I already have well or do I like this because some books challenge what you believe?” Those are the best ones. The ones that say, “I’m believing differently now than I did before.” I think that’s true learning. This one is probably the former because it resonated a lot of what I believe politically already and the way I operate. Let’s put it on a spectrum. On one end of the spectrum, you have coddling, which would cause brittle bones with no resistance. The other end you have abuse, which is breaking bones. As a basketball coach, I have parents that see me on both of those spectrums. Some of them say I’m too soft, some of them say I’m too hard. Some of them like Goldilocks think I’m right. That’s very few.

All based on what you’re doing at the time. You have multiple perspectives analyzing how you’re coaching and how you’re leading. Some describe it as more toward coddling, others describe it as abuse.

In the book, it speaks a lot to academia. The idea that in academia, we’re dealing with words and ideas most of the time. Outside of academia, in the real world is where you get hit in the face. The idea is how weak our children. You can’t lump them all together into one. How do you do that? As an investor, do you want to be strong entrepreneurs? Is it easy for us? Is the world of competing and being an entrepreneur just a piece of cake where you don’t need any resistance to prepare you?

That’s the variable is the degree of what is resistance? What is the environment of learning? It says good intentions, what’s the intention? The intention is to protect. Is that a good thing? It is, but it’s in certain contexts. There has to be a certain situation, which protection is good. Is protection good always? That’s where it comes down to, where is that line? What is that environment where it is trauma? It’s disruptive or against a specific belief and how do you govern them?

Let’s talk about investing first. I don’t know how it is in other things. In the stock market and the options market, I don’t know anyone that has incurred losses. I don’t know anyone who hasn’t dealt with nervousness, fear, uncertainty and setback. You’re dealing with emotions of fear and greed and all those types of things and seeking reward one would risk. I will tell you my opinion is in that arena, you better have a strong spirit. You better have some guts and have some stick-to-itiveness. If losing money hurts, is that abusive? Losing money isn’t physical. No one has ever died because of bankruptcy. In this idea to protect the perfect little psyche, what resistance is required?

You look at sports too.

It’s a perfect analogy.

If you coddled an athlete, how long are they going to be an athlete?

They’re not going to be an athlete at all.

As far as growth is concerned, it’s an interesting dynamic because we’re trying to avoid pain but yet pain is the way. Ryan Holiday said, “Obstacle is the way.” When there’s resistance, it could be painful but that’s a catalyst to growth. Is that absolutely true?

Let’s decide this. Let’s talk about pain. Is pain good or bad? That’s the first thing. We tend to want to not have any of it. No pain, no gain. How much pain is healthy? I think it has to do with damage. Your analogy of an athlete is great. It’s as if I resist, if I do the pushups enough, I’m sore the next day. The DOMS, Delayed Onset Muscle Soreness, it’s painful. It rips it out but that’s how the growth comes. Through pain comes the gain. It’s very true. You put astronauts into space, the biggest problem is there’s no resistance. You can kill someone with no resistance. It’s as lethal as if you shot him with the gun. Here you have the spectrum of abuse on one side, coddling on the other. One causes brittle bones. Others will break even the strongest ones. That’s what we’re here to figure out and talk about.

Let’s talk about the book, what’s the point of the book? The book is called The Coddling of the American Mind. It’s not saying that coddling is bad. If you coddle your child or if you coddled a baby, it’s saying the coddling of the American mind. What is he saying with that statement?

No one has ever died because of bankruptcy. Click To Tweet

The book deals a lot with academia. They’re saying, “Can an idea be harmful and damaging?” Do we need to protect people from ideas? For example, someone’s on one side of an issue, maybe there’s a rape victim and is going to speak. This rape victim might say, “I’m going to talk about being strong and saying, ‘You need to move on with your life and you need to understand that guy doesn’t have the power to take away your worth, take away your value. It was an episode. Get the help that you need, but don’t let that kid take control of your life.’”

There’s a big group of people who say, “If you give that message, that’s insensitive to the other rape victims.” It’s a very real conversation to have and say, “We’re going to boycott this speech because by being on campus, that validates the rapist in some way.” There were some ludicrous examples on one extreme that he gave. It’s a slippery slope into abuse. You don’t want to tolerate abuse. When you say the American mind, can words harm someone, sticks and stones may break my bones but names will never hurt me? Is that what it is or words will never hurt me? Being called names, name calling or ideas that are opposing to yours, are they harmful? Obviously his premise is no, they’re not.

Let’s go to the growth of the American mind, whatever it’s called in the title. What’s the growth he’s referring to? The American mind, it’s growing. How does it grow? Is it the same principle of resistance that applies to athletics?

He seems to think so. What doesn’t kill you makes you weaker. If it does it give you resistance, you become weaker. When you get into society, you have to function. In real life, there’s this thing called competition. As entrepreneurs, we see this competition and it hits you. It is a fight. If a person can’t stay in the fight and fight for what they believe, I’m damaged. The other thing is that sinister is it can also be a ploy to kill the dialogue. If you embrace the idea that coddling is a good thing, that’s a very good way to kill the dialogue of your opponent as a weapon. Let’s not let them hear this because it’s too harmful. Now, information has been controlled. That’s how cults happen. Information control forms people’s beliefs. If you control the information, people will only get one set of information and they’re not allowed to address an opposing idea because it could kill them and damage them. When you look at information as something as damaging, how do you ever find the truth if you don’t have it?

Greg is the CEO of FIRE, which is the Foundation for Individual Rights in Education. Where he creates through defending free speech. The free speech idea, which is essentially the openness of people being able to share ideas and information. That’s where it’s like some information and some ideas could be harmful. At the same time, what’s the difference between being harmful and resistance or something in contrast to a person’s beliefs? It comes down to everyone’s going to have a certain belief system of a certain perspective. Obviously having an exchange of ideas could potentially ruin a person’s beliefs. It could have them question certain things. It could have them maybe question to school in this sense. The idea that the school is sharing. It can create trauma. At the same time it’s like, “How is the protection of ideas being shared going to be traumatic?” because you could justify trauma on both sides.

If you look at free speech and we isolate that idea into just words, it’s easy to find the abuse and start there and work backwards. Yelling fire in a crowded theater when it’s a hoax, obviously is not a good thing. If it’s a credible threat on someone’s life, a bomb threat, that’s my freedom of speech. That’s a credible threat. That’s harmful. You start to back that off and you say, “Can words cause pain?” He talks about in the book a lot about Veritas. That in the search for truth though, ideas are going to have to be challenged. You move from threatening people or lying to the idea of honest dialogue that may be right or maybe wrong, but there has to be that fight. In a fight, there’s going to be stress. He sees that as a healthy thing. If someone says, “I’m uncomfortable talking about this, this is causing me stress.” Is it stress or is it damage? Is it permanent?” That’s where he says, “Our intentions are good. Don’t make people uncomfortable.” There are so many issues. There are race issues, religious issues, moral issues, political and all these issues that people are attached to. Yet if you isolate people in academia and decide which ideas are healthy and unhealthy. Sticks and stones may break my bones, ideas should not harm me.

It’s interesting to look at it. I interviewed Ed Griffin as part of this season. He’s big into the idea and the protection of the individual and that the collective is an abstract. That the collective doesn’t think like the individual thinks. Look at the fostering of the mind of a young person. We have our perspectives of the world and it’s a certain way. We have certain strengths. We have certain abilities. We have certain tendencies. Our children even when they’re young, we have a sense of stewardship over them. They’re individuals. They’re going to have a different way of looking at a lot of different things. Oftentimes as parents, you want to protect them. You want to make sure that they don’t get harmed. At the same time, how are they going to discover their individual personality, their perspective, their characteristics, their strengths and their talents? How are they going to discover that without the environment in which they’re challenged?

TWS 10 | The Coddling of the American Mind

The Coddling of the American Mind: How Good Intentions and Bad Ideas Are Setting Up a Generation for Failure

Tribalism is primal. It takes seconds to happen. Certainly, from a sociological standpoint, we live in tribes as human beings. We have our political tribe. We have our work tribe. We have our religious tribe. All these family tribes. What happens is tribes do have group thinking. Libertarians, Democrats and Republicans all have a statement they make, “This is what we believe.” Any idea that opposes that is an attack on that group. The idea is to protect the people. This idea of coddling is another weapon to say, “It’s not up for discussion. I can’t discuss it because it might hurt our group or it kills the fight.” That’s how culture is a scary thing.

If you look at a Moonie’s Cult or other cults, you look at maybe a Hubbard type of figure, every one of them tries to control information. They say, “This is the information that’s good for you and this is information that’s harmful to you.” You can see there’s a trap in that is that a person will never escape into what could be the truth. Maybe they have the truth. Hopefully, they do but no one has all of it, at least we don’t think so. If you forbid conversation or information, you’ve now created a mechanism that will trap people from the truth. I can’t imagine that’s the way to protect the truth. Most of the times it’s the way to defend something it might not be or hide the truth.

When it comes to our evolution as people, as humanity, you’re either growing or you’re dying. You don’t sit stagnant in life. We’re compelled to move forward. It’s hard to argue. Then you have to define, “What is growth?” It goes to Maslow. What does Maslow’s Hierarchy of Needs show? It shows you first seek food, shelter and clothing. You seek safety. Safety is found in tribes, in groups. What’s next?

The highest part is self-actualization.

You can’t achieve self-actualization unless you have a sense of safety. There are the ego and the self-esteem side of things too. It’s interesting because we’re compelled to seek safety. We’re also compelled to love and also be empathetic, which is the self-actualization in a sense. Everybody is at different stages. That’s why when you look at a tribe, it’s full of individuals at different stages. In a sense, tribes both protect but they could also inhibit. When you look at academia, you look at the purpose of school and education, it’s not to memorize multiplication tables. What’s it supposed to do? It’s an environment in which your mind grows. It’s challenged. You have new information. It grows even more. It’s challenged even more. It grows even more. That’s the thing is I look at academia and these days it’s the subject matter. You don’t need half of it. Academia, for the most part, is teaching kids how to learn, but is it teaching them the right way to learn?

I can tell you not knowledge but like toughness. Another great book is Jay Bilas’ Toughness. He talks about what toughness is and the difference between a rock and a rubber tire. In academia, what’s interesting is young students, eventually are going to have to go out into the real world eventually. If we coddle, can they survive the world? That’s the big thing. Are they strong enough to deal with the realities of setback? One of the things in the book that’s interesting as he talks about the Generation Zs and these guys that were brought up on their phones and social media where the fear of being left out is traumatic.

The fear of not being liked on the Facebook page, the fear of seeing all your friends someplace where you didn’t get there. All this stuff causes all these anxieties that maybe you and I can empathize with. We didn’t get it drawn up. If we go back to pre-Columbus, Native Americans. What was the adversity for those kids? Starving, not being able to get the buffalo and getting beat up by the other tribe. Their idea of stress and difficulty was probably much more physical than social-emotional. We have almost no physical. You’re going to have the bullies and stuff but I’ll tell you, by and large, it’s more emotional toughness and emotional battles that these guys have to fight.

I don’t think it’s shutting off the social media. I think it’s learning to deal, to face it, not hide. Facing up, manning up, womaning up, adulting up or whatever you want to call it and not hiding from these little things that get magnified. He talks a lot about that in the book too is that by creating a safe place suggest that it’s horrible. It reminds me when someone went in to get some counseling and they said, “This is going to happen to this guy. I want to talk to someone.” It’s not like, “This is going to harm you. You’re going to have to work through this. This is going to get worse. You get PTSD.” He says, “No, I want to talk to someone. I feel like talking and I think I’ll be okay.” “No, you’re not okay. You’ve been harmed.” It’s crazy.

Where does it come from? Is the intention so that they’re safe and that they’re protected, they’re protected from harm?

Through pain comes the gain. Click To Tweet

Where I might disagree with what he said is he says, “Good intentions and bad ideas.” I’m not so sure they’re always good intentions because if you have an ideology, you’re against and you can create and paint it as toxic that gets it out. You don’t have to address it. You don’t have to debate it. You have to prove it wrong. You say, “It’s harmful. It’s out.” You can eliminate something from the public debate and the public dialogue by labeling it as toxic and people will be trapped in the ideology that the person refers. He says good intentions and bad ideas. Is that always good intentions? Are we always calling good intentions or is this a way to keep things out of a public dialogue by labeling it toxic?

Instead of going off on tangents, in the end what did we learn from it? What are some of the things you take away and say, “What is the right thing? What is not the right thing? Where do we draw line?” It’s a very gray area and it’s very situational.

I don’t have the answers to that or I’d write another book. Part of the value of reading a book like that is the mindfulness of it. It is when we’re in a situation like let’s say I’m coaching basketball. It’s like I can say, “On this side it’s coddling and on this side it’s abuse. I might not have the answer but if I think about it, I’ll probably get closer to it than if I don’t. At least I can consider it, “Are we coddling or are we being abusive?” If we don’t even ask the question and we go, “This is abuse every time or this is coddling every time.” At least the idea of having that spectrum to consider probably will make you a better father or maybe make you a better coach. Not a perfect one, but it will probably do a better job. As an investor and entrepreneur, it’s the same thing. I don’t want to be guilty of either one. That’s what I put on my Facebook page. I don’t want to be an abuser but I don’t want to be a coddler.

It is situational. Is it possible to know exactly what to do in every single situation? Probably not. That’s why I would say dictating policy around how you deal with resistance is concerning because you’re allowing one person or a group of people that have interests, that have a bias to take away your power, take away your ability to know how to act for yourself in that specific situation.

We’re probably biased. You and I both feel the power of an individual is very strong. When I’m on my podcasts addressing difficult issues and as an educator, my solutions are to the individual. Off and on my podcast, I have people who want a systemic solution. They go to Congress and they try to lobby for this law and that law. I go the opposite way. I said, “There’s nothing you can do about what Congress says. You as an individual, you can make decisions to better your life and improve yourself.” There’s always going to be that. It’s going to be an interesting experiment. I have a little basketball team that I coach. I’ll share the story. Half the people are going to think it’s awesome. Half the people are going to think I’m an abuser.

We were playing below our potential in a game. We were down by four. We should have been beating this team by 40. We weren’t playing our best. I called a time out. I align the kids up and I said, “This is a one-minute time out. We’re going to run a sprint during the time out and we’re going to get tired one way or the other. We’re going to get tired playing harder or tired sprinting.” They ran the sprint. As soon as they went back, they got back out and played. I called my second time out, I had to do it twice. The other team cell phones are coming, “This is going to be on YouTube. This crazy coach doing this.” What was interesting is after the second time out, that’s a lot of running for two minutes, to run sprints for two minutes. I didn’t care about the game. I thought, “We’re going to lose this game because I’m going to send them out tired.”

You wanted to take advantage of the environment to teach a lesson.

What I did is I looked them in the eye and I said, “I can write effort and tired down on a clipboard. I could put it on a chalkboard. I could try to explain what it feels to be tired. How many of you looked me in the eye and know what it means to give your all now and what it feels like to go to that place? You know what tired feels like. You weren’t tired before when I called a timeout, you had energy left to burn. Now you burned it. You know what it feels like.” That’s what it should have felt like when I called. It was interesting because I had parents mostly from the other team that were booing me and this and that. After I had two or three quietly come up and said, “If you’re ever looking for a player.” They thought it was great. One of those parents, I’m not coaching his kid. What’s going to be the test is this, 30 years from now, are they going to say, “My life is a mess because I had this abusive coach. He embarrassed me in front of everybody,” or are they going to say, “I learned the best lesson when I was thirteen years old?” Running for two minutes is not physically harmful. People do it all the time. You get tired. You recover. No one had a heart attack. No one has had a broken knee. Was that emotionally bolstering to that group or is that emotionally deteriorating to that group? Time will tell. I don’t know.

TWS 10 | The Coddling of the American Mind

The Coddling of the American Mind: If you forbid conversation or information, you create a mechanism that will trap people from the truth.


I think also you have the relevance of the person that’s controlling the environment at that time, making those decisions and influencing these decisions. This again comes down, maybe it’s the intention, maybe it’s leadership ability. You could easily have seen a person who could have been a jackass and have the kids sprint and yell at them. The example I always think of is it was like his platoon or some war movie where Nick Nolte was this jackass leader that nobody wanted to follow. You also had true leadership there as well. Why do people follow certain people and not others? I’m not sure if it’s a feeling, and knowing you, the kids felt like you knew what was in their best interest.

Maybe not, who knows? My opinion it was or I wouldn’t have done it.

It is very situational. We’re going to make mistakes. Perfection is an idea. Nothing is perfect. What’s the perfect way to deal with the situation? The perfect way is to accept imperfect but allow people to figure it out. That’s where I look at free speech zones. Maybe somebody comes on campus and gives wrong information.

How do they learn to evaluate the wrong information?

That’s my point is you have to have the experience where there are resistance and the ability for something false and something true to arise and for individuals to have that experience. If you rob that experience, I believe that it is that coddling. It does weaken an individual because they’re going to face resistance at some degree in the future and how are they going to deal with that?

The other thing it does is it eliminates gray because it teaches people to have a worldview of harmful and safe. We can categorize as, “That not safe, it’s out. That it’s safe, it’s in.” It eliminates gray and the ability to have a gray area to say not everything is dichotomist. You don’t want to have people seeing things in terms of who’s right, who’s wrong or even he’s good, he’s bad, harmful or safe. Here’s what’s interesting. He talks about a safe room. This blew my mind, he talked about announcing to students that, “I might do something that could trigger you if you don’t want to be around or go to the safe room and hold this teddy bear.”

Literally, a teddy bear is in the room. By framing that to a young mind, by saying what could happen is dangerous enough to require a bomb shelter. You’re now putting people it’s a nuclear freaking warhead. By sending that message, are we teaching people that words that sticks and stones are not only the things that break bones, but words can also devastate your soul or your spirit? It doesn’t seem intelligent to say, “Here’s information. Don’t read it,” because if that’s a policy, you’re not going to get to that veracity, that truth.

It’s not an absolute finish line. Things are always being discovered. Progress is always being made. What is true now may not be true tomorrow.

When it comes to our evolution as people and as humanity, we are either growing or dying. We don't sit stagnant in life. Click To Tweet

Your debate skills go out the window because there won’t be one.

That’s the thing is we have a saying that we use all the time because I’ve had experience in business where you had two conflicting ideas. There was so much resistance there. They didn’t want to be wrong and kept resisting. Those people are gone. I look for that now. I want them to pursue what’s right, but not be adamant about what their opinion is being right and being willing to be slightly wrong. That’s the thing. If you look at the dialogue, if you look at progress as an individual, we’re very limited. Having conversations, especially group conversations, where you have similar values and similar outcomes, multiple minds in there is a profound dynamic. However, if you essentially prevent people from being harmed, you’re never going to have that conversation, to begin with. The ideas will not come to fruition.

We’ve talked about it in the position of being the leader of your own investments, of your own company, of your own sports team or your own family as parents. I also thought a lot about this book in terms of whether I’m seeking out safety too often. Whether I coddle on myself by self-imposing restrictions on what I read or what I’m willing to listen to. I think no one gets out of cognitive dissonance. It’s the way we are built. Flipping that in my mind is the challenge of how open am I to have my beliefs changed and not be coddled and how might I be challenged? There are a couple of fun websites out there.

One of them that I thought was fascinating is they’ll take these severe issues like gun control or abortion or stuff and people will go there and say, “Please try to change your mind. I want to see if I can find empathy for the other side to change my mind.” It takes a lot of courage to do that because we become so entrenched. The news cycle is interesting because Walter Cronkite used to summarize everything that was important about 25 minutes and a couple of commercials. I don’t see the difference between Fox and MSNBC because I feel like both of them are telling their crowd what they feel is right.

It’s a validation of their own narrative night after night. It separates people good or bad. The tribalism that you mentioned with this idea that it’s usually one tribe and another tribe. They’re trying to limit this information coddled in their own group. What’s interesting about that is these two groups, they’re going to fight and they’re never going to have the chance to get out of that rut because they’ve lost the talent and ability to consider something else. What happens in tribalism is as soon as you put a label on a group, all of their individual merits are erased. For example, if you don’t like President Obama, he said he’s a Democrat. What type of father is he? He must be a bad one. What type of husband is he? Maybe he had some interns in there with them.

Who knows what type of cigars he smokes? He quit smoking when he was in there. What happens is when we get those divisions, we tend to erase all of the other merits that the individuals in that group might find. As I look at my friends who are Democrats, Republicans or Libertarians, I have friends in all three groups that if I was in trouble and my car broke down the middle of the freeway at 3:00 in the morning, I feel like I’d call them. Every single one of those guys would respond in the most benevolent manner willing to help even though they’re there in those different groups. Another part of this coddling of ideas is they’re bad people. They’re dangerous. You erase any merits they might have outside of that solitary issue. All of a sudden, the dean is unfit for office. All of a sudden, the dean of this college should resign because of this issue.

That’s what Greg and his organization defend with one of the authors of this book. That’s the biggest thing right now because kids going into college, think about the environment that they’re in. They had high influence based on parents, community, the city they grew up in or the state that they grew up in. They have a certain perspective of the world. They go into this environment in which it’s different because you have kids that are all different. In that environment, it’s grounds to make a lot of change because your mind is pliable. You’re highly influenced because it’s new. If you’re given one narrative, you’re given one label, then now you go into the real world, it’s going to be such a shock. It’s going to be beyond whatever crutches. It’s one of those things where it’s destroying an individual’s ability to think for themselves. They’re thinking in groups.

The evolution of the technology is interesting though because we live in an information age where ideas are thrown at you all the time. It makes sense that people that didn’t feel that’s a war because there isn’t information war controlling eyeballs and controlling ideas now that they would want to fight by saying, “This is an incoming missile. We can’t have these missiles pointed at us.” It’s such an interesting time to be alive.

TWS 10 | The Coddling of the American Mind

The Coddling of the American Mind: Perfection is an idea that nothing is perfect.


It’s fun at the same time. There’s information overload. It’s what we experience on a daily basis relative to 60, 70 years ago. It’s unbelievable and it continues to change. I would say going back to some of the main points, “All human beings are flawed. All groups have flaws but they all have strengths.” The environment in which people where discussion can take place, where exchange can take place. That’s how you grow. That sounds Utopia-ish but at the same time, it’s one of those things where the freer a person is, the more growth that exists.

If I want to run away from coddling, the further away I run for coddling, the closer I get to the abuse. If I want to run away from abuse, the further away I get from abuse and coddling. The invitation for me in reading this book was to begin to see both of those extremes and try to come back to a larger awareness in each individual person, situation and role that I play. Try to find a healthy place in the middle where there’s enough resistance to grow the bones but not enough resistance to break them.

This is such a great point because the coddling is what shows a sense of nurturing.

Everybody is dangerous.

At the same time, if you have that intention and the idea but yet you allow for resistance. I’m talking more like a parent right now. If you allow for that resistance and difficulty because you understand how growth occurs, that’s like right there in the middle.

We usually start off talking about investing. We always come back to our kids. It’s a big challenge in this environment and yet the competitiveness of it. I see parents that schedule up every bit of their kids. “No Fortnite allowed because you’ve got to get the piano done. You’ve got to get this done. You’ve got to be prepared to get in this college.” They overtrain in order to try and make them strong enough to compete. They’re scared their kids would fail. The other end of the spectrum are these people that just coddle. I’ve seen it in sports where parents are so afraid to have their kids lose a game. It’s insane to lose a game. They’re sandbagging that goes on where teams with huge talent will go and play in leagues with almost no talent so they can get their trophy. It’s incredible to me.

We were talking previously about your boys. You talked about your experience with playing basketball. You played at the University of Utah. You had a team but you didn’t play high school. The reason why is because you said you were cut. It was interesting how they did the cuts, big cuts and then a small and then the one last person cut. You went through that for three, four times.

I got cut seventh eighth, ninth, tenth, eleventh, twelfth and once in college before I made it.

You can't achieve self-actualization unless you have a sense of safety. Click To Tweet

It could be described as traumatic. At the same time, what did that create inside of you? How did that start to form who you are and what you’ve pushed for?

I’m not the only person that might have tried out for play and didn’t get the lead. As investors, learning to understand that failure isn’t fatal. Failure is not the end of everything. Did it hurt? Absolutely. Did it affect my self-esteem? Absolutely. At the same time, those were gifts in a way because you learned that you don’t win every race and everything isn’t roses all the time. He talks about in this book that there’s a resilience that is inside of people, evolutionary or God-given, one of the other, to where there is a resilience built in where people can deal with the cancer diagnosis and figure it out.

You can control whether someone comes on campus to speak but you don’t control when you hear the news that you’ve got cancer or when you’re being sued by a competitor and it’s unfair. If you can’t handle a simple idea being brought on campus, what’s going to happen when you’re in a lawsuit or when you get cancer or when your child gets cancer? You can’t coddle your kid against cystic fibrosis. You can’t coddle them. There are certain things in life that can’t be coddled. What makes us think that an idea can hurt these kids when there are so many more things that are so much more emotionally severe, infertility, loss of a child, lawsuits or failures in business?

These coddlers, how devastating was it to try out every single year and get cut? It was devastating. It’s not something that I couldn’t rebuild on top of the rubble. What about a failure in business? What about a failure in investment? You get into bigger stuff. What about health failures? What happens when you lose a child? There is definitely a resilience that can be strengthened or weakened inside of us. It’s finding that point where you bend but not break. Where pain is a good thing, not a harmful thing. Too much lifting can be degenerative and cause your bones to hurt but not enough to be degenerative and cause your bones to hurt. Where do you find it? I don’t know. It’s food for thought. For every investor and parent, where are you? Do you want to be coddled? None of us want to be. I don’t know.

This probably resonates with most people. It’s one of those things where these principles apply to so many different aspects of life. We have talked about kids. We talked about sports, business or politics. It applies to everything.

We should never apologize for this podcast because resistance is going to have a business. Resilience is a prerequisite. The strong survives in a world that competes. You can’t eliminate the competition because it’s the way life goes.

The first four months of the year, we’re talking about capitalism. The reason why I wanted to get this on is because obviously, it’s a different situation but it’s a very similar principle because of the notion of capitalism. It’s one of those things where you have commerce. You have the exchange of ideas and capital. You’re going to have success and you can have failure. Free market capitalism doesn’t exist because you have political influences. You have monetary policy influences. That’s the thing is if you look at where we’re at as a state of the economy, we’ve had artificial coddling of institutions of certain businesses of money in general where people put money to invest in hope for some future. People have been coddled when it comes to commerce due to the coddling of the actual institutions that are serving them. I look at how applicable these ideas are in that instance. This comes down to maybe where we end, which is if you continue to coddle, you have very weak bones. When resistance happens, you have breakage.

TWS 10 | The Coddling of the American Mind

Toughness: Developing True Strength On and Off the Court

What’s interesting is there are both ends of the spectrum in capitalism. There’s abuse because he who has the gold makes the rules. There’s a great way to think about it is when you think about capitalism, if you want to take the other side of the argument, talk about the evils of it if we dare do that. What Superman’s greatest superpower? He’s got an X-ray vision. He’s strong.

He can detect if the person is telling the truth.

I’ll tell you what I think it is. It’s his heart because if you change Superman’s heart, he becomes the world’s greatest villain. He is still the world’s greatest superhero. If you have capitalism and you have evil people begin to grow. You have greed. You have those things. You have no benevolence. There is a range but yet if you coddle, it’s as bad.

They’re very similar if not identical principles.

The thing that’s beautiful about capitalism is it allows for the tremendous potential for someone to be the greatest they could be. You look at a Warren Buffett and Bill Gates, you look at the amount of money, half of their wealth are given away. They both made that pact. They have that club they started where a billionaire can join and say, “We’re going to give half our money away minimum.” They will give far more than that. Certainly, guys like Steve Jobs, when I look at what my kids learned in that iPad, they’ve contributed in their products as well. There is ambivalence. On the other side, the Bernie Madoff’s of the world, they deserve to be in prisons because they have broken rules.

You have rules that protect people’s rights and that’s where you look at the environment though. You’re not going to ever have perfection. You’re always going have a Bernie Madoff.

Here’s what’s tough. Here’s probably a truth that we fight against. It depends on what your definition of because it’s an idea that’s manmade, the idea of fairness. If you go into the Serengeti and you watch any other species, do they have fairness? Do chimpanzees have fairness? The one mother who got their daughter eaten by the lion when they weren’t looking, that’s not fair? The death of your chimp is a fair game out there. We’re not willing to accept that as human beings because we’re smarter. We’re not animals but yet we are animals. It is an interesting idea that the pursuit of fairness is a great pursuit, but defining what it is, that’s tough. Every human being wants to be treated fairly.

Do you teach your child life is fair and you should expect it? Even though we all want it and even though we want to pursue it, it’s so difficult because life isn’t fair in how we’re born. Some people are born with higher IQs, some with low IQs. Some of us have to work harder for what we get than the smart kid. Other people are limited physically. The way you’re born genetically, the genetic lottery isn’t equal. Unless you want to get into eugenics someday, which we probably don’t want to do. How do you make it all fair by the nature of birth? You’re going to have abuse, coddling and unfairness in between. It’s tough.

You have the environment and humanity has amazing things about it. It also has a lot of frailties and weaknesses. That’s most fair environment is where I would say people’s rights are protected if you were able to act, learn and grow. It’s hard to find because there are lots of different circumstances and situations.

Things are always being discovered. Progress is always being made. What is true now may not be true tomorrow. Click To Tweet

Equal opportunity is very important to fairness and yet we have an inequality in the ability to capitalize. You can throw out an equal opportunity but individuals might not be able to equally capitalize because of what they’re starting with. How do you subsidize? That’s where we start to coddle maybe, I don’t know.

The things that you can do though is essentially have certain environments in which ideas can be expressed. That was the point of the book.

You can’t suppress ideas in the name of protection.

That’s where people start to understand themselves and understand growth and what their strengths and abilities. It has to go through a refining process.

It’s a great question and an invitation for discussion is, “What is harmful and what is the power of resilience? Are we not resilient enough to withstand an idea and a speaker on campus that disagrees with us? Are we not strong enough and resilient that is abusive and breaks our bones?” He says, “Let’s put the pause button on here and understand that we might be taken this too far,” in his opinion, obviously, we have. For that reason, it’s a very healthy discussion because I didn’t realize how pervasive it was. The things he was siding and the sheer volume of cases and losing in their jobs over two words in an email that got blown up and the fear of your colleagues and being tenured. It was incredible. I had no idea what was going on in academia. I didn’t realize there were safe rooms and trigger words. My son in his school might be saying now this might cause you mental harm if you want to go to the safe room, go ahead. That’s unsettling that level of coddling. I probably liked it because I agreed with it. I confess.

My disagreement with academia in general and a lot of different aspects of it. This is the next generation of those who are going to be in the world, be producing things, starting businesses or solving problems. It’s one of those things where in order to solve a problem, you have to be able to face some adversity. If the environment of which they’re transitioning from a home life where they’re highest protected. Kids in generations to the environment which is the in-between before they get into the real world. If that is how the programming is taking place, they’re not going to be fit for most businesses. They’re not going to be fit for most for most jobs because if they cling to this notion of tribalism. This is the idea and everybody has to believe that certain way. They’re afraid of being wrong. They’re afraid of getting hurt, that person that solves problems.

That’s not resilient. It’s an awesome discussion. Thanks for having me.

Thanks for reading. We’ll see you next time.

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About Andy Tanner

TWS 10 | The Coddling of the American MindAndy Tanner is a renowned paper assets expert and successful business owner and investor known for his ability to teach key techniques for stock options investing. In 2008, Andy was key in helping develop and launch Rich Dad’s Stock Success System, which teaches investors advanced technical trading techniques to profit from bull and bear markets. He serves as a coach to Rich Dad’s Stock Success System trainers and as the Rich Dad Advisor for Paper Assets. He is currently authoring an upcoming Rich Dad Advisor book on paper asset investing.

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Understanding The Markets, Washington, And The Economy with David Stockman

TWS 09 | The Markets


David Stockman is an American politician and former businessmen who served as a Republican US representative from the State of Michigan from 1977 to 1981. He is the ultimate Washington insider-turned-iconoclast. David reveals some of the secrets that politicians tend to hide while sharing the milestones in his life that brought him to understanding markets, the economy, fiscal policy, and monetary policy. He takes us back to the events that changed the economy in history to that of the financial crisis in 2008, sharing what he understood about Wall Street and how things came to be from then on. Tying it up to the issue at the heart of capitalism and the prosperity it creates, he talks about the markets and creative destruction.

Watch the episode here:

Listen to the podcast here:

Understanding The Markets, Washington, And The Economy with David Stockman

TWS 09 | The Markets

The Great Deformation: The Corruption of Capitalism in America

I have the pleasure and the honor to have David Stockman on with me. David, welcome.

I’m happy to be with you.

For those of you who don’t know David Stockman, he is an American politician and former businessman who served as a Republican US representative from the State of Michigan from 1977 to 1981. He also served as the director of the Office of Management and Budget under President Reagan. David is the ultimate Washington insider turned iconoclast. He began his career in Washington as a young man and quickly rose through the ranks of the Republican Party to become director of the office that under President Reagan. After leaving the White House, he had a career on Wall Street. You’ve had quite the experience, David. You also authored an incredible work, which I would say a treatise of what your principles really are called The Great Deformation: The Corruption of Capitalism in America. You also have a book that you just released, Peak Trump: The Undrainable Swamp and the Fantasy of MAGA.

David, thank you for your work over the years. I’ve followed you for a long time. The empath in me cringes sometimes and I see you on TV trying to advocate principles of liberty, principles of free market and certain monetary policy principles, fiscal policy principles. It doesn’t seem to get through. Honestly, it says a lot about who you are that you continue to advocate for principles you believe in despite the resistance you get most often. Give the audience an idea of what are the milestones of your life that brought you to the point where you understood what you do about markets, the economy, fiscal policy and monetary policy.

You summarized my career at length. Half of the time I was a politician and half of the time, I was an investment banker on Wall Street, so I never had an honest job in my whole life. I learned something big during that two-phase career and that is about debt. Washington loves debt because you can keep the can down the road and put the cost on future generations and pretend that the interest carry is not all that bad and you can get away with. There are no offsetting institutions and principles that mitigate against that. You’re going to end up with a $22 trillion national debt that we have. As I show in my new book, Peak Trump, we’re heading for $40 trillion before the end of this coming decade and that will be just a devastating burden on the economy. As near as I can project, it would amount to about 140% of GDP. We only know of three economies that have more government debt than that are Japan, Greece and Italy. It doesn’t bode well for where we’re heading, especially because we have this oddity in our demographics here in America and that is the Baby Boomer. It was a giant aberration in terms of the number of babies that were born in 1946 when I was born.

In 1962, there are 80 million people. If you do a little math, you’ll realize that all of them will be retiring in the 2020s. In the early 2030s, they’ll be hitting the Social Security trust funds and Medicare and a lot of the other so-called welfare state supports massively just in terms of numbers. What politicians don’t let you know or maybe don’t even know and don’t acknowledge is that it’s a built-in Ponzi scheme, Social Security and the rest of the welfare state. They build in higher and higher real benefits over time relative to what people earn during their working career and put into the trust fund. It’s nothing like insurance, it’s nothing like actuarial balance. It’s a Ponzi. If you have this debt already baked into the cake and you have the demographics baked into the cake and then you have this escalation of real cost per beneficiary, you’re in big trouble. That’s what the politicians have ignored. Wall Street used to know a lot better. Back in the ‘50s, ‘60s and the ‘70s, you had a decent level of prosperity. Wall Street understood a little bit about what sound money was in what fiscal rectitude was.

If you got heading off the deep end, it happened in 1967 or 1968. It was Johnson’s, Guns and Butter. It’s the Great Society on the Mekong River. It was a disaster, but finally, Wall Street rose up and said, “You can’t do this.” They forced Johnson to raise statutes to balance, which is out of control. William McChesney Martin who was the chairman of the Fed at the time believes, “You can’t print your way to prosperity.” We were on the grades and we had a recession and people learned their lessons. I say all this because after 1971, when Nixon took us off of the gold standard, it was mainly nothing to do with the magic of gold. It had to do with discipline on the central banks and the financial system. It’s accountability and discipline. You couldn’t create credit and money at will in any quantity. That went away and it took a little while for people to realize that we were on a total fear system and nothing could stop the central bank if they want to print like crazy.

Wall Street learning to love money burning because, in the short run, it helps to inflate financial assets. It made interest rates lower. It made capital rates and our P/E multiple times and everybody lived happily ever after except Main Street. Here is the point where the rubber meets the road. Since Greenspan took over the Fed in 1987, we had been off in something I called bubble financer Keynesian central banking. In which we’ve had tremendous booming prosperity on Wall Street and increasing stagnation and flat-lining failure on the Main Street. Let me give one statistic on that and then we can move on because it summarizes what I learned through my years in Washington and in the second half of my career in Washington. If you go back to the days right before the great crisis that shook the rafters in September 2008, everybody thought the world was coming to an end. If you look at where Main Street was as measured by industrial production and that’s everything. That’s manufacturing, that’s energy, coal mining, oil shale and all the utilities, gas, electric, water. It’s a fundamental measure of output on the Main Street economy.

You couldn't just create credit and money at will in any quantity. Click To Tweet

The reason I dwell on it is that if you go to the level that existed in November 2007 and compare it to where it is now, we gained 3% in the last eleven years. That’s the same thing. If you divide that out by eleven years, you might as well fall flat. Look at where the NASDAQ-100 was on November of 2007. NASDAQ-100 is the leading edge of the casinos or the stock market. You take the inflation out of it. We’re talking apples to apples here because of the industrial production is physical and it has inflation in it. On an inflation-adjusted basis, the NASDAQ-100 last fall peak up to 200% and Main Street production output is at 3%. That doesn’t make any sense because often the price of equities and other financial assets reflect the output and income capacity and growth of Main Streets. What we have is a totally bifurcated economy on unbelievable prosperity down on Wall Street and that’s a great bubble that’s gearing the labs.

Trump made a mistake of embracing it. The stagnation and increasing resistance to growth on around Main Street because we have so much debt. We can get into that but the amount of debt, not just on the government sector that I talked about, but also in the business and financial institutions, add up in total to $70 trillion, which is three and a half times net income. I don’t think that stable is sustainable, but it does mean that you’re lugging so much debt that growth becomes harder and harder. That’s also why we woke on a ten-year rolling basis. Our real GDP growth rate now is 1.5% compared to 3% to 4% back in the heyday before 1971 when Nixon took us down the path we’re on. That’s some big-picture views that I put together and assess over my years in Washington and then on Wall Street.

The first thought that comes to mind is I think it did work relatively speaking for bankers over the last years. At the same time, if you look at the fundamental side of things. I don’t think most people understand the fundamentals. If you will dig to look at what occurred 2008, it started with Greenspan and what he started to do, especially with the dot-com bust. It comes down to the artificial influence of markets because markets are supposed to be a clearinghouse. If you look at profit and you look at capital and you look at valuations, you buy companies that are profitable, that have good cashflow and that have good fundamentals. You don’t buy those data. They’d have poor operations and poor balance sheets and poor financial statements.

If you look at what has been done is the injection of capital into society. It has artificially increased the demand and the flow of capital into businesses. That’s why a lot of the bond issuing by corporations to buy back their stock is just one example of that manipulation. It’s not understood from the average American’s perspective because they don’t have this background in economics, unfortunately. A lot of the stuff that’s happened has been, not necessarily behind the scenes. What’s occurred into the narrative around it that you explained is that this is a good thing. That we’re here to save the economy, we’re here to bail out banks and we’re here to do this and this for your benefit, but ultimately it was just to the benefit of them.

TWS 09 | The Markets

Peak Trump: The Undrainable Swamp And The Fantasy Of MAGA

This is where I want to get into the idea of capitalism and economics. I interviewed a guy who wrote a book called The Coddling of the American Mind. The book is about the higher education system and how free speech has gone from one side of the spectrum where the epitome of free speech and now it’s the complete opposite. The Coddling of the American Mind is trying to protect those from emotional harm than anything else. What it does is it robs people of the experience of figuring things out on their own. The point of capitalism and economics fundamentally is to have a system in where things are innovated and solutions come up. People are able to express themselves through capital and through resources, but if they fail, they’re out of business or they learn. That’s ultimately been completely removed from the equation in most cases and has created what we have now.

In terms of the things I look at, I don’t pay that much attention to the way that they’re paddling all the snowflakes on college campuses but I totally understand that. At another level, at the level of the macroeconomy and Washington policy and Wall Street, it’s the same thing. Wall Street wants to be cargo. We saw the Christmas Eve and they had a hissy fit because they finally said, “After eight years of negative real interest rates, the money market rate, the Fed funds rate is less than inflation for eight years running.” They finally said, “We’re going to normalize interest rates. This big bloated balance sheet we have that inflated with stock and bond market is going to continue on automatic pilot.” That’s what follows it. They have a hissy fit and the next thing you know, it does a U-turn. The Fed-heads are out there singing about, “We can be patient. We can defer delay.” I said, “What are they thinking about? They have been deferring for ten years.” We’ve had unreal Central Bank policy. Go grab this balance sheet level and it’s manipulation of interest rates in the yield curve. Yet, we get just a modest correction or wakeup call a couple of weeks before Christmas Eve. At the big sell-off on Christmas Eve, all of a sudden, all the crybabies on Wall Street are asking for their safe room.

If you go back to 1970 or even the mid ‘80s, when I left Washington, the Reagan administration when I was budget director and I joined Salomon Brothers, which was a rough and tough place then. It was run by John Gutfreund. He was called the king of debt. It was a huge trading house with all debt securities. You didn’t see this snowflake attitude on Wall Street. People expected that there were going to be cycles. That they were at risk if they’re going to chase the latest and greatest stock bubble phenomena. There was no presumption that if there’s a big meltdown, Wall Street would be bailed out or that we would get to a situation like 2008 when Morgan Stanley was insolvent. It should have been forced into Chapter Eleven. Merrill Lynch was insolvent, it was put into a shotgun marriage. The Bank of America didn’t want to buy Merrill Lynch, but they were forced but it and Merrill Lynch should have gone bankrupt. Frankly, Goldman Sachs could have gone bankrupt as well. All of them were way over their skis with all kinds of sticky, risky, long-term assets that they were funding with overnight money. The panic came in, the overnight money dried up. They faced over putting crisis they couldn’t get out of and the market should have been allowed to work.

What I said in my previous book, which I think still is a lesson that’s been lost because we’ve had this phony stock recovery. The recency bias obscures everything that we allegedly learned back then. What I showed is, there was no danger of a meltdown in the banking system on Main Street. There were no lines with the banks other than a few high that were in the subprime mortgage business that should have gone out of business anyway. The key point is the bailouts were of the big Wall Street gambling houses. It wasn’t of the banking system. We should have allowed the crisis to burn out in the canyons of Wall Street. All those firms who will be gone on there, they would have been reorganized. The same people that were running them, then we’ll be running the reorganized Wall Street now. All of their phony wealth had been built up and now consist of some realistic appreciation about the danger of too much debt and risk and too much gambling down in the canyons of Wall Street, but none of that happened. If we did the snowflake thing, Wall Street will go to all these banks, the same way with the car companies and a lot else in the US economy. As they say, it was a wasted crisis.

We did nothing but double and triple down on what Greenspan had already been doing, which was bad enough. Now the Central Banks led by the Fed have painted themselves into a corner. Let me just give one little illustration of how aberrant all this is. If you listen to what I call bubble vision and let’s say CNBC are both the same, you would think that everything is normal and stable and will forevermore be when in fact, we’re in a giant crazy experiment. Anybody who looks at it objectively with historic notions of sound finance and financial discipline will say, “What are they doing?” On the eve of the Lehman bankruptcy, September 15, 2008, the balance sheet in the Fed was $138 billion. It had taken 94 years from when the Fed opens its doors in 1914 to build that balance sheet off into Ohio State and test and business cycles and so forth. It had taken 94 years to build that up. Even then, it wasn’t perfect and you were creating separate bank credit out of thin air. In the next 94 days after Lehman went under, Bernanke and his merry money creditors at the Fed created 145% more balance sheets in 94 days that all their predecessors had gone into previous 94 years. They took the balance sheet and earned $30 billion to $2.2 trillion in 94 days.

After they had supposedly rescued the economy when the only thing they did was suspend the laws and supply and demand and financial discipline. After they’d done that, they kept on going and they invented Q2 and Q3 and the twist and other central bankers baloney. They eventually took the balance sheet to $4.5 trillion. That means that in roughly nine to ten years, they create $3.5 trillion of Central Bank credit out of thin air and pumped into Wall Street. That caused the price of bonds to soar because of all of this artificial demand from the debt. They paid for it with something for nothing digital credits made out of thin air. When the bond markets soared and long-term interest rates went lower and lower beyond the 1.35% here and even lower abroad, that’s the capitalization rate for all financial assets. When the long-term interest rate gets pushed down before the board, the P/E rate or the price-to-earnings ratio is the inverse of its source for equities. The stock market waves off and then you get all kinds of financial derivatives, options and futures and the whole rest of the complex going for a huge ride.

The point of capitalism and economics fundamentally is to have a system where innovated solutions come up. Click To Tweet

They didn’t fix anything. They violated even more laws than anybody had done before and get on the financial laws. They created with the third-grade bubble of this century that we’re in right now. I want to relate this because I don’t think it’s sustainable. I think we’re going to have an even bigger and more thundering crash for some reasons that we can get into. The reason I call my book Peak Trump is that Trump, for all his defects and lack of preparation and know-how to do the job that he was running for, at least he called it one big crowd ugly bubble during the campaign. When he was elected, the S&P 500 was 21.40. Fast forward to two years, the peak was 29.40. The problem is that big fat ugly bubble now became the trance of Trump and economics. It was a huge mistake to embrace that bubble in the economy that went with it because they’re both going to go down for the count. They’re going to splatter over the White House and Donald and all the rest of it and we’re going to be in for big-time crisis in the years ahead.

What keeps circling through my mind is it’s like a violation of the principles of humanity or behavior. We’re here having an experience of life and we learn by going through difficult things and learning how to make decisions and being responsible and being self-reliant. That cycle happens throughout our entire life. Going to the example I was using, it’s evident that the higher education model, the coddling of a mind, ruins and destroys the mind. It’s not allowed to have the experiences that form their perspective, their intuition, their opinions and figuring things out using a rational brain. It’s the same thing monetarily where you had these companies and you also had influences that failed, yet you didn’t allow them to fail and it magnified the problem.

It’s not even making the problem worse. It’s worst times two because now they didn’t learn and they’re going to just keep using the exact same behavior that they used before. Now, it’s a much bigger problem and it affects the whole world. It’s not the US. This has gone through the entire world. What happened is it’s on the backs of the American people. The citizens meet Main Street as they are called, but the unfortunate thing is that the majority of people don’t know what economic policy is and monetary policy. They’re just following what the status quo has been for the last 30 or 40 years. The unfortunate thing is that we’re past the point of no return as far as having to learn a lesson the hard way. That’s part of making mistakes. It’s a little difficult in the transition and it’s unavoidable. I agree with you. It’s a matter of time. That’s just one of those things where it just keeps sputtering along and people were like, “If I believed you or if I stuck to the fundamentals and principles ten years ago, then I wouldn’t have made any money.” What the view is right now and one of the things where in hindsight, the lesson is always learned. It’s never learned in foresight.

This gets to the issue of the heart of capitalism and the prosperity that it creates, is the money and capital markets. That’s where the financial flows crisscross. That’s where capital is raised. That’s where savings are put to work. You need very honest, efficient and discipline money in capital markets. If you have those, it will spread out to the rest of the GDP and the Main Street economy. The great trade market economist Joseph Schumpeter has this concept of creative disruption and that’s all capitalism progresses. Buggy whips go by the wayside and you get a horn on your automobile, your Ford, your model-T or whatever it is. That is important, but creative disruption is not working efficiently and productively if the financial markets are falsified by central bank manipulation and intervention. When they’re falsified and you get stock prices that are way too high, people are rewarded for doing the wrong thing where they should be doing something else.

I use this as a way of working up to Amazon. Amazon is turning the retail world upside down. It’s an amazing machine. In some ways, created a destruction like there’s never been before, but the stock market is so out of control because of the central bank manipulation that Amazon is drastically overvalued. It doesn’t produce any profit. The profits that you make are nothing to do with that big eCommerce business, the profits that may come out with the cloud business and that’s a tiny piece of it. The people running Amazon from Jeff Bezos are being told, “Don’t worry about pricing for profits, simply price for expansion, a price for sales growth or price in order to destroy the next industry that you decided to penetrate.”

TWS 09 | The Markets

The Markets: An artificial influence is always going to create unintended consequences.


It trades off and on at 150 or 200 times income. It trades multiples of cashflows that never made any sense of history. As a result of that, we’re not getting just creative destruction, we’re getting just pure destruction where it’s all these empty malls and all these failing retail chains. All these people whose livelihood was invested in the bricks and mortar retail sector are being prematurely thrown overboard or impaired and injured. Amazon is going too fast because Amazon is way overvalued. These are maybe worth the peak, but if the company were valued rationally and a preset template or preset type of machine, it might’ve been worth $5 billion.

At $5 billion, he would have one kind of business model and growth strategy, a modus operandi for Amazon and $150 billion is one that is something totally different. All the people who work for it will have some piece of the action in the stock options and so forth. If you take that example and you multiply it over and over by hundreds and thousands of times and we’re getting all kinds of bad signals to all our economies. People are making bad decisions and at the end of the day, they’re going to meet less growth, less prosperity, lower living standards and more trouble down the road. The worst case is the signal for Washington. If you tell the politicians and I was one of them for more fifteen years so I understand the mindset. If you tell him that you can borrow almost unlimited money at less than 2% interest, they’re going to borrow as if there’s no tomorrow. They’re going to say, “Debt spend is bad things. How many will get to the deficit in the volume buy?”

We’ve been kicking the can for 25 years and it’s because they have been totally mis-signaled and misled. The reason I know that’s true is that I was there. When I became the budget director in January 1981, the tenure bond rate is 16%. The 30-day trade rebill 20%. Our mortgages were up in the high tens and the bank rates are up for pushing 20%. In that environment, the deficits and debt scared the hell out of politicians because at least they could do the math. If you borrow $1 trillion and you’ve got a 15% bond yield, that’s $150 billion a year of interest you’re going to have to pay. It’s going to squeeze out your favorite book or project for education or some do-gooder thing that all the politicians glom onto. Some favorite war has happened to the warmongers so they’re either domestic do-gooders or foreign warmongers, but they want money and they don’t want to have to spend it on interest so they get reasonably disciplined or prudent fiscally if there are real interest rates.

We can call it price discovery and we can call it honest pricing, but the systematic effect are in central banking. I used the word because it means they’re trying to run the economy on the theory that capitalism was a total failure on its own. We’re constantly stumbling far in the recessions, depressions and all kinds of organizations, which is total baloney but that’s the view. Therefore, they’re in the middle of what I would call the central nervous system of capitalism. It’s Wall Street. It’s the financial markets and they should get out of there. They should let interest rates find their own level. Let supply and demand clear the market. If the stock market gets all enthusiastic, let there be a couple of crashes and let a few people be carried out on their shield. By the way, we have the greatest prosperity known to man. In 1870 to 1914, real GDP growth of 4% per year on average for 44 years. There’s nothing like it since and we had no central bank. We had nobody saying what the interest rate should be and we had nobody targeting GDP or the equation rate or anything else. We had just capitalism well.

It all comes back to that principle of accountability. When you have signals or you have influences, it’s an artificial signal. It’s an artificial influence and that always is going to create unintended consequences and they’re everywhere. You mentioned some empty malls and so forth. I’m not going to argue that Bezos or some of these tech guys have created value because they have, but at the same time, what value has been destroyed somewhere else? If I look at my local economy here where I’ve had a hard time trying to hire people over the last two years because there are hundreds of tech companies here now and they are not profitable. They price everything with tremendous amounts of VC funding or private equity funding and I can’t afford the developers. I can’t afford the project managers. It’s insane how much wages have been pushed up.

We're here having an experience of life and we learn by going through difficult things and learning how to make decisions. Click To Tweet

That’s one of those things where it seems good on some measurements because of what artificial demand is doing. At the same time, you’re not looking at the unintended consequences. I don’t think a lot of those consequences have manifested. On paper they have whether it’s a default of automobile loans, whether it’s the student loan bubble. They’re yet to manifest, but those are going to be some of those signals like, “Maybe it was good over here, but look at all the crap and chaos it caused over here.” That’s where I would say that difficult time is ahead of us. We all have it in our prayers that hopefully at this point, they understand the fundamentals of it and make the right decisions. You can’t just keep deferring the fundamental issue. The fundamental issue is you use debt to manipulate behavior, manipulate prices and manipulate growth and it wasn’t true growth. That’s what hopefully people will get, but time will tell.

You’re getting right to the heart of the trouble with bubble finance. There’s a lot of hidden rot in the financial and operating economy as the bubble gets larger and larger. People don’t see it either because it’s a new phenomenon or because there’s a suspension of disbelief. There’s been such a huge boom in the total value of the equity market and the bond market together that it’s generated enormous amounts of investible venture capital. Now, venture capital is flowing in tens of billions of investible funds. They’re looking for every top of maybe startup they can find and they’re all being funded. These are what I call burn babies. They are not paying the rent and the lights and the payroll out of revenue, they’re paying it out of venture capital. We’ve seen it before but this time it’s going to be the worst ever.

When the market goes into a big correction and the venture capital world dries up and freezes up and there are no third, fourth, fifth rounds or new fundings, all of a sudden, all of these burn babies out there are going to run out of cash. They’re going to turn off the lights, nail the door shut, get out of dodge and it’s going to cause a huge negative sucking sound. Voices like Brooklyn or Silicon Valley or Austin, Texas or a lot of others. For instance, take my favorite, WeWork. If there was ever a poster boy for the insanity of the current bubbles, it’s WeWork. They raised billions of dollars in the junk bond market and elsewhere to buy fixed office building assets that have a long life of 40 years or to lease them on long-term leases and to improve them will all kinds of fancy gigs. They attract people to come in and they’ve got all kinds of flavored coffee and all the rest of it there. On the other side, their tenants are on one week, 30-day or three-month leases. That is the most mismatch book in human history and it would never see the light of day if you have financial discipline. When the money is flowing in unlimited ways, the risk is totally ignored. You create a ridiculous oddity aberration like we were.

I’ve been to WeWork and they’re cool. They have a cool office space. It’s open. It’s a cool concept. I’m not saying that they’re not creating value, but at what price and what’s the consequence of how they’ve done it. That’s the point you’re trying to make. There are good sides to it, but nobody ever focuses on the bad and what the consequences are. It’s super convenient to order stuff from Amazon instead of having to go to the store. At the same time, it’s like, “What is that done the way in which they’ve been able to fund that and do that?” The consequence of being able to do it in the way they’ve done it hasn’t necessarily been manifested yet. That’s going to be worse than having the benefit of what they offer as a product.

I’m not pointing that WeWork is a bad idea. It’s a great idea but it can mismatch your work. You can’t be writing twenty-year leases on one side and day-tenancies on the other side. If you want to do it that way, then you’ve got to charge your tenants in the arm and the leg so you build up reserves. When the next downturn pumps, half the people occupying desks in WeWork are going to be gone. They’re going to be ionized because they’re burned babies. They have no revenue, they have no profit and they have no reason for being that only if they could raise capital because at the moment, anything goes. Now, you get a half-empty office building on twenty-year leases and all your tenants are disappearing or bankrupt. You’ve got a mess.

TWS 09 | The Markets

The Markets: The ignorance of individuals has been preyed on. Ultimately, we’re the ones who are going to have to pay a big share of the price.


I have one final question for you. If you had 60 minutes inside of a room of your choosing with Alan Greenspan, Ben Bernanke, Janet Yellen and Powell, what would be some of those first questions you would ask them or statements you would make to them?

For me it wouldn’t last very long because I would say, “You’re dead wrong and you’re not needed.” The idea of activist central banking and setting every price on the meal curve from overnight to 30 years, which directly or indirectly they attempt to influence. This idea of a Central Bank board is counterproductive. It’s negative and it’s not needed. We should go back to the banker’s bank that was created in 1940. You’ll see a legal Fed to buy any government debt, not bonds or anything. It did not have any mandate of full employment or 2% inflation. It was simply meant to be a backup source of liquidity to regional banks. Liquidity was to be provided to commercial banks only if they presented sound collateral based on receivables or finished inventory that could be converted to cash. What you need are central bankers where they would pair green eyeshades that could work through balance sheets and financial statements and determine whether or not the collaterals that are being brought to the window is sound and mostly loanable. We didn’t need Alan Greenspan and we didn’t need Ben Bernanke and his PhD and all these ridiculous models that they used. We didn’t need any of that. We need good accountants and lending officer. I would say, “We don’t need you but thanks for your service.”

It’s one of those things where they have this iconic status it seems. I look at the core and root of the problem and the unfortunate thing is the awareness that people have regarding monetary policy and the role of a Central Bank is nonexistent. It’s going to take some hard times for people to wake up. That’s behavior in general. When you start to experience pain, you’re like, “I don’t like that. I should change what I’m doing to get the pain.” That’s when change happens. As a society, it’s unfortunate that the narrative that we’ve been fed for the last 30 years is that all of this is good for us. That’s the saddest part. The ignorance of individuals has been preyed on. Ultimately, we’re the ones that are going to have to pay a big share of the price, but time will tell.

It’s bad and it’s also good because they put their credibility on the line. They said they fixed everything. We know what we’re doing. We need a monetary policy and geniuses on the Federal Open Market Committee and we’ll make everything better. When this bubble collapses, they will not be able to rescue the market. People are going to lose trillions of dollars. They’re going to be mad and angry. Some people are going to be totally financially ruined and there is going to be a day of reckoning then maybe the way will be open. We understand this to tell the American public. We don’t need this massive central bank intervention. It’s got to be house clean with echoes building and a totally curtail back to its original mission. There’s a chance that it could happen, but it will be painful getting from here to there.

David, thank you so much for your time. This has been a fascinating dialogue. I appreciate you teaching me and teaching the audience. What’s the best way we could support you? What’s the best way to follow you and see what you’re up to?

The lesson is always learned in hindsight; it's never learned in foresight. Click To Tweet

If you’re interested, I have a daily blog. You can Google it and sign up. It’s a modern subscription-based service or you can read my books. My newest is Peak Trump: The Undrainable Swamp and the Fantasy of MAGA. It’s important to understand what’s going on right now because we’ve all been totally misled by all the boasting and bragging coming from the White House about the Trumpian economy. It’s a house of cards and a house of debt.

Thank you for what you’re doing. Thank you for your service. We’ll talk to you next time. Thank you, David.

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About David Stockman

TWS 09 | The Markets

David Stockman is the ultimate Washington insider turned iconoclast. He began his career in Washington as a young man and quickly rose through the ranks of the Republican Party to become the Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street. He is the author of The Triumph of Politics (1986), New York Times best-seller The Great Deformation (2013), TRUMPED!: A Nation on the Brink and How to Bring it Back (2016), and most recently, PEAK TRUMP: The Undrainable Swamp and the Fantasy of MAGA (2019). He is the editor of David Stockman’s Contra Corner:


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Capitalism: The Individual At The Center Of The State with G. Edward Griffin

TWS 07 | Capitalism


We all have different social and political stands. This normally starts when we’re young and honed by various exposures to different environments. Writer and a documentary film producer, G. Edward Griffin followed his curiosity about these ideological discussions in the ‘60s and found himself attending a communist group. However, the things that he discovered upon reading all these communist books opened his mind to more questions waiting to be answered. His worldview has grown all through the years of studying and research, and he realized that the struggle is being able to simplify the concept of whether the basis of the society is the individual or the mob. He shares sensible insights about individualism and takes us through a deeper understanding of capitalism and all of the powerful and reasonable stands on the real balance of having the individual at the center of the state.

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Capitalism: The Individual At The Center Of The State with G. Edward Griffin

We have a very special guest and his name may be familiar to most of you, his name is G. Edward Griffin. He is a writer and a documentary film producer with many successful titles such as The Creature from Jekyll Island, The Capitalist Conspiracy and World Without Cancer. He is listed in Who’s Who in America. He is well-known because of his talent for researching difficult topics and presenting them in clear terms that all can understand. Ed, it’s a pleasure and an honor to have you on the show, welcome.

Thank you very much. It’s a pleasure to be back.

Over the years, I’ve had some very enlightening conversations with you. It includes some of the presentations you’ve given at different events. I’m fascinated by how articulate you are and how well researched you are, but also how you present yourself and present these topics, which I believe goes to your character. Maybe before we get into the topic now, which is capitalism, how would you describe your philosophy about life?

I thought we were going to narrow it a bit about life, but that’s interesting. That’s like my favorite speech topic is the world and everything in it. My philosophy about life, maybe we can do that again sometime, but about the social and political aspect of our lives, it’s considerably a narrower field. It’s taken me a lifetime to refine my concepts on that. Now, they’re so clear to me. It’s so obvious. I think to myself, I must have been a blithering idiot most of my life not to have seen it because now that I do see it, it’s like night and day. The old saying is that once you see something, you can never forget it. Sometimes people do, but in terms of a worldview, you never forget that. Once the bell is rung, it can never be un-rung. Once you know, you can never not know.

This is all prefatory to this because I have a great deal of optimism about the world now in spite of all of the negative and horrific things that are going on. I see a great awakening going on. Young people, in particular, are coming to know and they are seeing the truth. They’re hearing the bell being rung. Even though all this turmoil I still going on, I’m aware of this growing groundswell of awareness of young people. They’re going to be here long after I’m gone and they’ve got it. Like you, you’ve got it. I know you have. Once you understand that, you never don’t understand it. Back to the question, what is my view? Like a word or a handle to describe who are you? Are you a conservative? Are you a liberal? Are you a left winger or a right winger? Are you a moderate? What are you? A neocon or whatever, all these words are floating around. A capitalist, a socialist, a Nazi, a fascist, all of these things. I was in that trap for most of my life trying to figure out which one did I want to be.

I picked one that sounded pretty good, then I got to learn a little bit more about it. I said, “Nope, that’s not me after all.” I went through the whole thing. I think every young person starts off being some communist, a socialist, a collectivist is the word. It has so much public relations appeal. The greater good or the greater number. Isn’t that wonderful? We all have to get together and be a team player. These things are very appealing and they’re good in so far as you go, but nobody ever looks at the flip side of the coin. It’s not what you do so much or what you want to accomplish so much. It’s how you do these things and how you accomplish them. I learned that a long time ago because, in the ‘60s, I was very curious about all this ideological discussion. I went down and I said, “I’m going to go down to the communist’s bookstore. I heard there was one in town,” and I did. It was down in Larchmont Street in Los Angeles, practically in downtown. There it’s called the People’s Bookshop. I went in there and I got to know the comrades pretty well.

They thought I was a convert or potential convert. They invited me to their study clubs. Their study meetings, which I knew and everybody knew that this was a recruiting funnel to get me into the party. I played along with it. I didn’t know much about it and I’m here to learn. I told them, “I don’t know what you guys are up to but I’d like to know. Show me what you believe, what are your books and so forth.” I don’t think they expected what happened because I bought their books and I read their books. I not only bought them, but I read them. It wasn’t long after going to a couple of those so-called study groups, I realized that I knew more about the doctrine than they did because they hadn’t read. They had slogans. I’m leading to this. I realized in that early stage that most people are driven by slogans and certainly those on the left and the right too, they’re driven by slogans.

One of the greatest slogans and it’s very appealing for the communist and socialist movement is, “From each according to his ability and to each according to their need.” What is wrong with that? Isn’t that wonderful? Isn’t that the basis of charity? Isn’t that the basis of all the religions of the world? To help your fellow man in need to the best of your ability. Naturally, it’s appealing but what they don’t tell you is how. You have to think a little bit. Not take this to the next step. How? It’s the argument for world government would bring peace because there would be no nations to fight each other. If there could be no nation, there could be no wars between nations and so forth. Then you’ve got to ask the question, “What kind of world government?” As a kid, you don’t think of these questions. When I was trying to figure out what all this mess is, I suddenly realized that in the Western world, there were only two basic ideologies. If you go outside of the Western world, you’ve got theocracy for example.

The government based on the concept that the leaders are representatives of God. They’ve been empowered by God. In fact, they have some kind of spiritual status that makes them above human. There are many places in the world now that still believe that. In centuries past, it was much more common than it is now. That’s not the driving philosophy in the Western world. Theocracy is not our problem. Our problem is something else. In the Western world, there are only two concepts and they have words. These words were well-known 80 or 100 years ago. I found out in the literature that these words were used to all the time, but I never heard them when I went to school. The words are collectivism on the one side and individualism on the other side. What is that all about? When you take these other words like socialism, communism, fascism, leftist, rightist, moderate and all these things. You peel off the labels of those concepts and all of them are variant of collectivism.

They’re all the same if you understand what the underlying elements of the ideology are. I made a study of that and I came up with about eight. They were quite common such as I mentioned the origin of the idea of what is the ultimate goal. The conflict between the individual or the state or the collective, which is more important. The collectivists, whether they call themselves communist, socialist, fascist, Nazi, whatever, they all believe that the group is more important than the individual. That the individual must be sacrificed if necessary for the greater good of the greater number. That’s that magic phrase and I bought into that when I was in school. I know that sounds good. The greater good for the greater numbers.

It’s a mathematical equation. If you’ve got three over here and they want something and only two are here, well the three get it because it’s the greater good of the greater number. The old cartoon about democracy. The greater good for the greater number. The cartoon shows the wolf and the bear arguing over what’s for lunch and the lamb has only got one vote. The democratic thing is that the lamb has to go. My worldview gradually has grown over all these years of studying this and making a lot of discoveries and frankly finding out how ignorant I was. Even to this day, I don’t think I have any idea that’s completely original with me. Everything I have learned was known by the ancient. It was known by people hundreds of years ago and they wrote about it. I just never read their stuff.

Now that I’ve found some of these things in the old documents and I found books that had been forgotten. Some of them had been buried and deliberately hidden from view. I realized that these ideas are not new but they’re very important. I realized that the struggle is between this concept of what is the basis of society, is it the individual or is it the mob? Once you get it simplified down to that concept, it begins to get easier to straighten out. What is my view? I am what you would call an individualist. I believe that the individual is all there is in human society and hence, the most important thing. I don’t believe that you can vote away a human right.

A human right is yours. If you’re an individualist, you believe this. That you’re born with certain inalienable rights as they said in the Declaration of Independence here in America. Inalienable rights, which means they’re individual rights, they are not group rights. I don’t care how many people there are out there, there’s a mob out there and they don’t like it. Maybe they don’t like your beliefs. Maybe they don’t like the color of your skin. Maybe they don’t like your religion. Maybe they don’t like the way you talk or whatever it is, they don’t like you. As if they can gang up on you and there are three of them and you’re only one or two. In the concept of collectivism, the three or the larger number gets everything. There’s no question of limitations and the power of the group.

Once you get down to that understanding, things began to fall into place. I believe that the structure of society is based on individual rights and that we have them. They come with this. Some people would say that they’re God-given. That makes you nervous, then they’ll say, “Anyway, you were born with them.” They’re hardware, they’re not software. You have these rights and you create the governments. The people create the governments. The governments can do only those things which you as an individual have a right to do because that’s all you can delegate to the government. It’s what you have the power to do. Once you get that concept in place, that’s the next one and they go, “That’s an interesting thought. What can I do against my neighbor and using force and violence against my neighbor? What’s okay for me to do to kill my neighbor? Is it ever okay to kill my neighbor or somebody I never saw before?” The impulse is never okay, but that’s not right. You do have the right to self-defense.

TWS 07 | Capitalism

Capitalism: It’s not what you do so much or what you want to accomplish so much. It’s how you do these things and how you accomplish them.


If somebody is trying to kill you, “Lord, help us,” but it’s desperate if you are the lamb. You didn’t pick the fight. They’re trying to take your life. They’re trying to kill you. Maybe they want what you have. Maybe they just don’t like you. They’re trying to kill you. I don’t think anybody would blame someone for defending their life, their liberty or their property with violence if they had to into the defensive mode. If that’s the only basis for individuals to use violence against another human being, then that is the only basis that this individual can delegate to his state, his authorities, to the police, the military, the judges, the courts and all that.

If they derive their power from the people, as we’d like to say, then that’s all that they can do because that’s all we can give them to do. Once you get that in your mind, you mean the state can only use force, meaning military force, guns and jails. They can kill you in the electric chair. They can punish you and they could torture you and all these things. The only thing they can use any of that for is in the defense of life, liberty and property. That means that 99% of the stuff that our state is doing that supposedly for the greater good of the greater number, they’re doing it without any basis at all. They’re just doing it. They don’t have a right to do it because you and I don’t have a right to tell our neighbor that he can’t sell his candy bars on Sunday. We can’t do that. We can’t tell our neighbor what to teach his kids. We can’t tell our neighbor how many hours a week he must work or whether or not he needs a lunch break and the list goes on and on. We cannot take money from our neighbor that’s got a lot of money and give it to the other neighbor that doesn’t have a lot of money because we want to justify it.

I’m glad you’re hitting on all of this because is it possible to understand the proper role of government? Can you understand what a free market is or anything? Like you’re saying, there are these layers that come on top of this initial idea of individualism versus collectivism. The collectivism idea is an abstract, individuals are all that exists. If you can’t get beyond that, then there’s no sense in getting to the next layers as far as the Second Amendment, as far as other laws, other ideas and other structures. Would you agree with that?

Absolutely. As much as I revere the constitution with the United States, I think it was an inspired document. It’s the best political document that’s ever been written. I also know it was a beta model. It was the first time in history that any men had tried to create a state based on the concept that we’re talking about, limitations on the power of the majority or in the power of the ruling elite. Nobody had ever tried that before. We just assume that if you had control of the guns, that’s it. You’re in charge. You better like me because if you don’t, these are not going to go well for you. I have a great revere for the constitution because it was a beta model to try and instill some of the concepts I’m describing onto an agreement on a printed page. This is what we agreed to.

I also recognize that it wasn’t perfect. I also recognize that if we’re going to be talking about these principles and advocating them on a global basis and we go to some country in Europe or in Asia or in Africa and we say, “The US constitution says,” they look at you like who cares what the US constitution says? I realized quickly that we want to be missionaries on this concept. We had to talk about the principles. Even if they had never been embodied in the constitution, which was almost a fortuitous accident maybe. Even if it had never been written, these principles still needed to be understood and talked about. You’re absolutely right, I think it’s the principles that we have to look at.

It’s interesting if you go back and look at whether it’s John Locke or some of his contemporaries and then the Scottish enlightenment. How all of these very similar ideas, which originated before their time. As they started to converge and even though there weren’t the modern ways in which you communicate, those ideas spread. They spread in parts of Europe and obviously in what’s now known as the United States. I think most people will embrace that fundamental idea. That’s why I wanted to hit on that because if you can’t get your mind around that, then there’s no sense in having a discussion about the ideas that come afterwards.

Let’s go there. Let’s assume that our audience understands that we have inalienable rights, fundamental right and the purpose of our current government structured in the Declaration of Independence then leading into the constitution was to protect these rights. That was the function and proper role of government. Going to the next layer, why is there this draw towards what we currently have now as a very collectivist society? There is this moral backbone it seems into most of these collections of people, collections of individuals. They’re driven by this moral justification and you’re right, it doesn’t matter if it’s Democrats or Republican, there are these groups that have a very similar initiative. How have you come to understand this draw or this positive thing that has come from the collective grouping doing and acting for the benefit of the whole, if that makes sense?

Once the bell is rung, it can never be un-rung. Once you know, you can never not know. Click To Tweet

It makes a lot of sense and I think that the answer is twofold. It’s a combination of the fact that people do not know or have not taken the time to think and study about the questions that were raising the issues. It’s like they’ve never been to school. They don’t know how to read and write. They don’t know what math is all about. They’re not informed. It’s not that they’re stupid, that’s not it at all. It’s that they’ve never been exposed to this information. I’d like to use the word politically illiterate and it’s not their fault because they’re depending on the school system and the society in which they’re born to deliver this information. At the turn of the last century, that information was being delivered at an increasingly higher level in America. The school systems were doing increasingly a good job I thought.

Then with the advent of the rise of collectivism and the takeover of the educational system by the missionaries or collectivism and they started to rewrite the textbooks. Then you’ve got the large influx of money from the Rockefeller Foundations and the Carnegie Groups and so forth. They stated right in their own literature that their goal was to change the attitude of the people in America, their favorite collectivism. They said that openly. That’s what they set out to do and they did it. They did it through, first of all, removing the information from the history books and from school systems that you need in order to come back the propaganda. They’ve been so successful that now you can hardly find any remnants of this history in our educational system.

Unfortunately, the young people going through the school system are denied this background history. That’s half of it. The other half is that there is a class of people who know exactly what they’re doing and they’re the ones responsible for the extraction of this information. For the substitution of a new philosophy or a new point of view, it’s their favorite collectivism. They profit immensely in this situation. Over the years, I’ve never known what to call these people. People call it the elites and the powers that be and all these names. I finally came up with this, I call it now the PP class. What is the PP class? The PP class is those people that are made up of the predators and the parasites. In every cross section of any society, any place in the world, any race, anywhere throughout any period of time, you’ll find that a certain percentage and I’m going to say about 15% or 12% of the population that are predators. Probably another 15% on top of that would tend to be parasites if they were encouraged. If they were given a free ride, that side of their nature would come forth.

Here you have the predators who want to control you. They want to control society for their own wealth and power and they really are predators. They had no sympathy or compassion for the human being at all except to make them their servants and their machines to serve them. They will deceive you and deliberately lie. They’ll even kill you if you get in their way. They’re just predators. Then you’ve got the parasites that get sucked into this thing and they get dependent on the predators. They’ll do what the predators say. They’ve got a pretty good little army there that will work day and night to continue to further their nest at the expense of your work and your liberties. It’s as simple as that and you could go sub-analyze that into different subcategories. Overall, those are the two main forces that we’re facing.

Let’s pivot to this because the theme of our season is capitalism. The discussion we’ve been having and what we’ve been referring to as far as principles and individualism and capitalism. What’s the connection in your mind?

The word capitalism, that’s one of those words that is very hard for people to find in agreement on the definition. If you’re a collectivist, then you’re thinking maybe you’re not one of the PP’s out there, but a student hearing all about this will think, “The greater good for the greater number,” and all of that and so you’re into that. Then somebody says, “These capitalists are all selfish individuals. All they care about is getting to be rich and they’ll just grind you into the ground.” Are you going to be a capitalist? No, that’s the definition of capitalism. It depends on how you define the word capitalism. You get 50 people in the room and ask them to define capitalism, I bet you’ll have at least 35 or 40 definitions.

What’s my definition of capitalist? I like to go to the roots of the word. Capital is a form of property. Capital is property. A capitalist is a person who believes in the concept of privately-owned property and he uses that property for whatever purpose he wants. In an industrial society, the capital, this property becomes a means of production. He invests his personal property into machines, into educational institutions and training programs. He may even have schools they create to bring people to a higher enough educational level so they could work within his factories or his systems. For them to provide jobs and raise their standard of living. He can be a criminal or he can be a bad guy and use his capital for purposes in which we would not object. That’s up to him. If he’s going to use this capital against the laws of the land, then he’s a criminal. He’s a criminal capitalist.

TWS 07 | Capitalism

Capitalism: We cannot take money from our neighbor that’s got a lot of money and give it to the other neighbor that doesn’t have a lot of money because we want to justify it.


Being a capitalist doesn’t make you a good person, except it does narrow your focus to the fact that you believe in private property. That is I believe the foundation not only for prosperity but for personal liberty. If you do not have private property, you cannot sustain yourself. You cannot be independent. You have to be dependent on the group. What’s the group? It’s always the state. You become the servant of the state. You do what the state tells you to do if you do not have private property, which is why people like Karl Marx, Lenin, Hitler, Mao Zedong and all the other great collectivists of the world said, “Private property has got to go.” They teach that in the schools now. They say private property has got to go because it’s not right. It’s not fair. They put a twist on it and they sell it as a humanitarian objective when they know that private property stands in the way of the individual being subjected by the state. My definition of a capitalist is it’s simply a person who believes in private property.

I spent an entire year of going through John Locke’s ideas around life, liberty and property and what those things meant and how a very successful society has to understand those principles and how they work together. I look at what you said, which is brilliant, that property or capital is something tangible. It’s the physical world but I haven’t look into these days with the internet and how much is being done there, which is hard to distinguish is that physical or nonphysical? In the end, human beings, the brilliance we have in each of us is that we’re all different. There’s a uniqueness about human beings that’s incredible because we’re all different. We all have different backgrounds. We all think a little bit differently. We all have different ideas. That’s why I think property is an extension of that. Property in and of itself, I don’t know if it has value. The value comes from our ideas and our uniqueness and how it applies to that specific physical resource and what can be done with that.

If it has no value, it’s not property because nobody wants it. If it’s a rock in the middle of the stream and it has some value but not very much. Nobody cared for it unless it’s pretty. If it’s pretty then it has value and somebody wants it, now it’s property.

It either has to be like a relationship between individuals in order for property to have that value. It’s a fascinating idea but at the same time going back to your point of criminal capitalists because there are. The criminal capitalists are those that prey on the individuals but also they violate those inalienable rights. I look at the structure of free market capitalism and how it reinforces and protects individualism and it allows for both the success and also the failure associated with using capital. Tying into the idea of individualism, you have to protect a person’s desire to want to use property to do something and to benefit themselves. Ultimately, it has to benefit someone else in order for it to be determined as property.

The principle of enlightened self-interest is extremely important. Even if you’re a son of a gun and you’re a bastard but if you realized that the only way you can gain wealth and comfort is to build something or do something that serves a purpose in the society, then you’re going to be a constructive human being, whether you like it or not. This is your enlightened self-interest to do it.

If you look at the whole centralized power around what capital is and resource is, it conflicts with the ideas of individualism. I look at the word that’s thrown out there now which is equality where this person has too much money or this person has an unfair advantage. How have you come to understand the drive for equality and what that even means because that’s a word that is defined in a number of ways?

First of all, it’s a word that is very difficult and people have different responses to it. As you said so well that no one is the same to somebody else, exactly the same. Nobody is exactly equal. Thank God for that. Wouldn’t it be boring if everybody was exactly like we are? We’ll be mad at each other most of the time because we’re onto each other. We know all of each other’s tricks and all of that. Thank God there are differences in talent, structure, strength, intelligence, aptitudes and I might even say gender. Nobody wants to be equal in the sense of that context. What we want to be equal and under what circumstances is under the law. We wanted to be treated under the law equally and that’s all we can ask for, all we should ask for. We don’t want any favoritism. We don’t want to be treated as a special group or class.

A capitalist is simply a person who believes in private property. Click To Tweet

Even if our parents were destitute, even if we were poor or if we were denied something, it didn’t have love or something, maybe one of our parents is dead and all of these things. Maybe we were born with a deformation of some kind and maybe we don’t have a hand. Maybe we were in an accident and all these things. All we have to say is that you cannot give any group any favorite treatment under the law, no matter how worthy their cause is or how compassionate you may feel toward them. Once you crossed that line, there is no stopping that. You can always make an argument, if this was true for Matilda, it’s also true for Johnny. His condition is a little bit different. Now you got two exceptions. If it’s true for Matilda and Johnny, it’s also true for Mary. The next thing you know, the whole world has got these exceptions.

All you need to see that is go look at the federal income tax and see all the exemptions and so forth. It just becomes a maze. It’s illogical. It’s unethical. For all we can ask for is to be treated absolutely equally under the law. Most people will say, “That sounds good.” Yet they’re perfectly content with the existing legal system, which I guarantee you 90% of the existing laws on the books do not treat people equally. 90% of them at least are designed to shift favoritism from this group to that group. Give this person a little edge over that edge or to punish this group for that. 90% of the laws are not administered equally and we’ve got to do something about that if we want to create a better world.

It’s one of those things where it’s going to continue to have corrections of the law to compensate for the deficiency that is created by another law. Then it’s this vicious cycle of trying to compensate for something that’s simple.

The truth of the matter is that it’s not just stupidity. It sounds good but they’d made a mistake. They didn’t think it through because it won’t work. What we don’t realize is we’re dealing with predators. They did think it through. They know exactly that it won’t work, but in the process, they know that it puts them in the middle. They are now the administrators of the system. They’re in charge. It helps them a lot. They don’t care whether it doesn’t work. In fact, they’re delighted that it doesn’t work because now it’s an excuse to go back and have another program and more taxes, more regulations and more power to them. It’s not stupidity. We got to remember there is a predator class at work.

I had the thought I had on bullet points to talk about monetary policy. I think a book that is definitely something that you created as this enlightening document to be able to understand what the monetary system of the US is or just a central monetary system in general. Going into that will take another take another few hours. I look at even with that, which is another way of describing collectivism and also the creation of equality in a sense. If you don’t understand the simple principles of what individualism is and also the principles associated with why our founding fathers created the documents that they did and why they did it.

Escaping from the political systems that they were in before, then there’s no sense in getting into monetary policies because it will just be super confusing. At the same time, you look at what is running the world right now, it’s commerce to an extent. Commerce is all controlled. It comes down to the control of a central bank and how they’re able to manipulate certain things, for the interest of some. I won’t even get into what those groups are, but you know where I’m going. Did a lot of what we’re talking about play into the desire that you had to write that book?

I have to think back. I’m rewinding the tape now all the way back many years. I think the honest answer is no, because when I had a desire to write that book, frankly I had no idea what I was getting into. Had I known, I’m sure I wouldn’t have attempted it. It was too much but ignorant though I was, I thought, “This is an interesting thing. How money comes into creation. How they create money out of debt, out of nothing.” Actually, debt is even worse than nothing. I thought, “I’m going to do a little documentary on this one.” That was just the beginning of my learning process. Had I known them, I wouldn’t have gone all the way through. It’s too much. The depth of this problem is something that grew in my awareness as I prepared for writing the book. It was a learning process.

TWS 07 | Capitalism

Capitalism: Young people that are recruited into the left movement are definitely crusaders. They think they’re working for something good.


Looking at where we’re at now. You had said something that hit home, which is there’s optimism. Despite what’s going on in the world around us, which is quite a bit. Where do you derive the energy for that optimism? What are you seeing that makes you optimistic?

That’s a two-part thing. The first part and is the most interesting is where do I derive that energy? Where does that drive come from? I had to stop and think about that. Since we’re talking about the predator class, we might think that at the other end of the spectrum there is a crusader class. I think that’s true. We have about the same percentage or 3%, 10% little group. At the other end, that are born with that drive to shut things right. I’ve discovered late in my life. I was an adult, I was married, I had a job and had a family and everything before my crusader gene kicked in. I had no interest in saving the world or anything like that. My interest was climbing the ladder of success, looking good, living well and all that sort of thing. When I got into some of these issues that we’re talking about now, I realized, “What am I going to do about it?” That’s a problem. Some of us have this insane desire, this insane thought that we can do something about it and we must do that.

The honest boldfaced answer is that I can’t help myself and I have a feeling you’re probably the same way. Probably at this end of the spectrum, there may be 5%, 6%, 7%, 10% of the people who just can’t help themselves. They’d got to rush forward and see what they can do to correct the wrongs. No matter what it takes, we can’t sleep until we figured it out. That’s my drive. I’m not claiming any great honor for it or any praise. It’s the way I am. My crusader gene is always buzzing. That’s interesting because if you look at the world in retrospect, in all history, all the great changes in history were done by 1%, 2% of the population. That’s all.

It’s been 1% or 2% in one end, 1% or 2% on the other end fighting it out and the other 98% were sitting back saying, “I don’t know which side will win but whichever side wins, I was always on that side.” It’s sad in a way, but it’s encouraging too because it means that we don’t have to convince our neighbor next door cutting his lawn. If he looks at us with that glazed look and he says, “Huh?” “What did you think about the Super Bowl?” That’s what he probably wants to talk about. “What about that Dancing with the Stars last night, wasn’t that something?” If that’s the focus of his life or her life, then you just say, “Next.” We’re looking for that 2%, 1% that have this crusader gene.

That’s an amazing way to put the crusader gene. I’ve never heard of that, but that makes sense. I look at a lot of what drives other collectivist groups. They probably think that they’re crusaders too.

A lot of people, especially the young people that are recruited into the left movement are definitely crusaders. They think they’re working for something good. I was that way at first, then I realized the trickery involved in all of these slogans and then that changed everything.

Maybe we’re going to end with this, how I’ve looked at things over the last couple of years and wanting to understand how important it is to recognize not just the principles associated with individualism, but you yourself. That there’s beauty in all individuals. There’s that uniqueness of where they’re born, that the socioeconomic environment, that political environment. People are driven in very similar ways. What touched me over the last couple of years is understanding more about the hierarchy of what people are driven to do. Maslow has one model. I think it’s pretty simple to understand. We don’t have to worry about in our day and age, food, shelter and clothing. Those are somewhat simple to come by. Then as far as inching our way up the ladder, people are getting very close to this idea of wanting to do purposeful things.

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That’s where it comes down to the collectivist idea, where it does have, in a sense, a moral foundation. They think they have a moral foundation and they’re pursuing something for the best interest of others. I look at most of those groups and really what it does is it ruins the individuals. Whether it’s giving away welfare and their social programs and giving away this and giving away this, redistributing wealth. It ruins the experience of the individual to grow and to experience life. That’s where I find it very unnerving because I look at how important the experiences I’ve had in life, the difficult experiences. If I had been bailed out, where I would be and not having learned from those lessons. I look at family members, I look at so many different circumstances where individuals are robbed of experiencing life. I think that’s one of the travesties of our day.

You’re certainly right on target with that; the idea of protecting people against the effects of their own folly. I think it was Lord Acton or somebody like that said, “If you protect men from the effects of their own folly, you will fill the world with fools,” and that’s exactly what happens. You realized that if you follow the mantra of collectivism, you do not help people, you actually hurt them. You may give them a temporary meal. You may give them something they need very badly at the moment. That’s charity. I’m all for that. You should be doing that but to build a system around that so that it becomes no longer voluntary, but you have to do it or you’d go to jail.

Now, you’ve created a system, a machine that’s going to destroy the average person. They will not help them at all. I came to the conclusion that the mantra of collectivism is for the greater good of the greater number and if necessary, that means you have to sacrifice the individual. I finally came out the other side realizing that the individual should be the center of the state, protecting the individual. That is the greater good of the greater number. That does help the greater number to a higher degree than collectivism, which professes to have that goal but accomplishes just the opposite.

How can individuals follow you and learn more about what you’re doing? I know you still write quite a bit and contribute in different areas. What are some of the best ways to keep up to speed with what you’re up to?

Thank you for that. Supposedly the first thing I should do and I always forget this, is to talk about our commercial site, That’s where we have a lot of books and recordings, videos and audio tapes on the themes that we’re talking about here. My books are there too but we have about a hundred different excellent items. It’s a good place to start if you’re looking to flush out these ideas and say, “I wonder if this is true,” and you want to dig into the history, the rationale and the logic of it all. Then you have to do a little study. That’s the starting point. You have to put these ideas into action. Knowing that something is a superior idea, doesn’t make it win, especially when you’re up against the PP class. The predators and the parasites are working against you and all of them are looking for laws, the force of the state to compel you to shut up or go away or conform to their point of view, whether you like it or not.

To have this knowledge and a big bookcase full of books and you read them all, “You can’t do anything to me. I understand. No, that’s not it.” You’ve got to get out there and get active and recapture the system and change law if necessary. I’m devoting my attention to that aspect now. For anybody that’s interested in that, I’d like to invite you to come visit us at It’s an organization. It will tell you all about it there on the website. It’s a group of people. We now have members in 85 countries. It’s amazing. This issue of collectivism versus individualism is global, ladies and gentlemen. It’s not just here in the United States. That gets even further advanced in some other parts of the world. It’s more sophisticated here but it’s quite global, let’s put it that way. Then let’s go right to the chase. In order to get the word out to as many people as possible, we’d devise some marketing tactics if you wish to call them that.

We’ve adopted the idea of the Red Pill because you can talk about ideology all you want, collectivism and individualism. Some people will say, “That’s hurting my brain.” If you talk about something more popular like, “Take the Red Pill and break out of the illusion, face the reality.” “I saw the movie, The Matrix. It was a pretty good movie.” All of a sudden, it’s in a more popular frame and not quite so intimidating. We’re having fun now talking about these things in the context of the Red Pill. It’s fun, so I’m getting to the point now. We have a Red Pill Expo. It’s the third one that we put on and it’s scheduled for June. It’s coming up June 2019 in Hartford, Connecticut. Put it on your calendar, please. It’s on June 7, 8 and 9 and if you want to know more about it, come to the website which is and you’ll learn all about it.

TWS 07 | Capitalism

Capitalism: The mantra of collectivism is for the greater good of the greater number, and if necessary, that means you have to sacrifice the individual.


It’s a great event. That’s all I can say. It’s a no holds barred event. People come there. We don’t agree with everybody that’s on there. In fact, we have some pretty good debates sometimes. The idea is if you want to break out of the matrix, out of the illusion, you have to open your mind to the fact that maybe what I know or think I know is not true. If you say, “I’m not going to listen to that person because that’s not true.” That means that you already have closed your mind to ever getting outside of the box that you’re in. If everything out there is not true, only what’s inside my box is true and you’ve had it. You’re getting into some great discussions at the Red Pill Expo. I invite you all to come.

I’m from Hartford. Where are you doing it in Hartford?

I should have the name of the conference center, but it’s a big one. Right in the middle of town. I’ll have to look it up. Come to the website and you’ll find out.

We’ll post everything. I was just curious personally.

It’s going to be a lot of fun. I got to tell you, we just finished the website and the enrollment process. The man who’s taking care of our Facebook and social media stuff sent that tweet out to a couple of people and several minutes later, we had our first enrollment. It’s a good omen. I know people are going to flood to this thing. It’s something you don’t want to miss.

This has been a fascinating discussion and I know you’re passionate about this. You keep doing interviews and you keep doing videos and it’s a worthy cause because, in our day and age, people are understanding more and more. At least they’re curious and more open-minded. Hopefully, these ideas resonate so that people can start to celebrate what can ultimately change their lives but I think change the world.

These ideas do resonate. That’s the fact. They resonate because they’re the truth. When you hear it, the bell is rung and you think, “I’ve been waiting for that sound all my life.” There it is.

The biggest barrier of the truth is that you may have to be wrong and people don’t like being wrong.

It’s embarrassing but at the end you think, “Now, I’m awake.”

Anything that’s really changed the world is somebody had to step back and question assumptions. Ed, it’s a pleasure as always. Good luck with everything and I’m sure we’ll get back in contact. Maybe we will do a version two about the Federal Reserve.

We’ll do version two, meanwhile, put it on your calendar. I’ll see you in Hartford.

Thanks, Ed.

Important Links:

About G. Edward Griffin

TWS 07 | Capitalism

G. Edward Griffin is a writer, documentary film producer, and Founder of Freedom Force International. Listed in Who’s Who in America, he is well known because of his talent for researching difficult topics and presenting them in clear terms that all can understand.

He has dealt with such diverse subjects as archaeology and ancient Earth history, the Federal Reserve System and international banking, terrorism, internal subversion, the history of taxation, U.S. foreign policy, the science and politics of cancer therapy, the Supreme Court, and the United Nations.

His better-known works include The Creature from Jekyll Island, World without Cancer, The Discovery of Noah’s Ark, Moles in High Places, The Open Gates of Troy, No Place to Hide, The Capitalist Conspiracy, More Deadly than War, The Grand Design, The Great Prison Break, and The Fearful Master.

Edward is a graduate of the University of Michigan where he majored in speech and communications. He is a recipient of the coveted Telly Award for excellence in television production, the creator of the Reality Zone Audio Archives, Publisher of Need to Know News, and is President of American Media, a publishing and video production company in Southern California.

He has served on the board of directors of The National Health Federation and The International Association of Cancer Victors and Friends and is Founder and President of The Cancer Cure Foundation. He is the founder of The Coalition for Visible Ballots, a grassroots organization for the elimination of vote fraud made possible by electronic voting systems. He is the Founder and Chairman of Freedom Force International.


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Reflections On Capitalism And The Morality Of It with Craig R. Smith

TWS 06 | Capitalism


Capitalism seems to have more bad than good reputation among people. Breaking down some reasons why it is misrepresented is Chairman of Swiss America Trading Corporation, Craig R. Smith. He gives his thoughts about capitalism and the relevance of money in a laissez-faire capitalist society. He talks about China, the government, and what they have been doing to the markets. Helping those who are still grappling with the monetary system, Craig defines sound money and why it is important. He also reflects about humanity, equality, and where we are headed in the next ten years with our current situation. Ultimately, amidst everything going on in politics, he reminds us how we, the people, are the government.

Listen to the podcast here:

Reflections On Capitalism And The Morality Of It with Craig R. Smith

TWS 06 | Capitalism

Money, Morality & the Machine: Smith’s Law in an Unethical, Over-Governed Age

We are going to be talking about money and our monetary system. I have an expert with me to help navigate this sometimes difficult to understand topic. My guest is Craig R. Smith. He’s the Chairman of Swiss America Trading Corporation. He has also written a number of books including Money, Morality & the Machine as well as Don’t Bank on It!: The Unsafe World of 21st Century Banking. Craig, thanks for taking the time. I’m excited about the conversation.

Patrick, it’s great to be with you.

Our focus or this theme that we have for the next several months is around the nature of capitalism, what it is and why it’s misrepresented sometimes. I would love to hear how you think about capitalism, but also the relevance of money in a Laissez-Faire Capitalist society?

Let’s talk about capitalism. Capitalism clearly historically is the one form of societal thinking that pulls people out of poverty. This is one thing that very few people are talking about. Perfect modern-day example of that is China. China is a communist nation. We tend to forget that they are red communists. If they have to starve ten million of their people to save their country, they will do that. They embrace capitalism. All of a sudden, 1.3 billion Chinese people have a pathway to get out of their poverty. When you look at capitalism and how it changes society, it changes a society because it eliminates poverty. It rewards merit. It rewards hard work. It rewards results. Unlike socialism, you don’t have to do anything. You don’t have to produce anything. You don’t have to play by rules. You are taken care of. Capitalism is by far the most superior form of societal cooperation than any other system out there. Take a capitalist like John Rockefeller. When he took over, kerosene was $0.85 a gallon. When he retired, kerosene was $0.10 a gallon. Did his capitalism help the average person or did it hurt the average person? I would argue it helped the average person.

TWS 06 | Capitalism

Don’t Bank On It!: The Unsafe World of 21st Century Banking

I love the examples you’re using because China is not considered necessarily a capitalist society, but yet as they’ve gravitated toward that, giving a little bit more freedom, a little bit more openness associated with the trade. It’s benefited so many people even though it’s not a full capitalist society, even small aspects of it make a difference. I would say it’s similar to the US. Correct me if I’m wrong, I don’t think there’s ever been a pure Laissez-Faire Capitalist society. Are you saying that any increase in those tenants ultimately is going to benefit everyone?

It’s no different than the principles of gravity, they work. You can argue against them but jump out of an airplane and see whether your argument holds water. The tenants of capitalism, when they are applied properly, work very efficiently because you have markets. Markets can remove excesses, can get the price right. Price discovery and markets give us the ability to grow. I can think of capitalism. I can go all the way back to people like JP Morgan. People think he’s a banker, or some of these guys that did the financing on things like electricity that ended up lighting America, that ended up heating our homes, that ended up allowing factories to run 24 hours, seven days a week. This is the thing we have to keep in mind. Capitalism takes natural resources in the form of steel, copper, so on and so forth. Combines it with human resources, labor along with technology and capital markets and creates a product, and that develops an economy. This is what we have to be careful about. Our government has gotten so big, the government doesn’t produce anything and yet they take $4 trillion a year out of the economy.

They’re also adding almost $1 trillion each year.

It’s ridiculous. Remember, I talked about markets. Markets are going to get this right pretty quick. We talk about the national debt and we talk about the trillion-dollar a year deficit that we have? People say, “They don’t matter. We were at $10 trillion, it didn’t matter. $15 trillion under Barack Obama, $20 trillion now under Donald Trump, $22 trillion. Why does it matter?” Deficits don’t matter until they matter. The day that they matter is a day too late.

Craig, first off, maybe define sound money. What does that mean? For those that don’t necessarily understand our monetary system. Talk about maybe the importance of sound money when it comes to having a very capitalist type of society.

Money in its nature has to have certain characteristics. Number one, money has to be divisible. In other words, you have $1, $10, $20, so on and so forth so you can make a change. Money has to be scarce. It has to have a store value. Our money is not scarce. As long as they’re growing trees, you can make more money. There’s no store value. If you put $1 away in 1900, that $1 now is only worth $0.2. It didn’t do a very good job as a store value. In America, we used to have a gold standard. When we were on the gold standard, our money remains sound. Matter of fact, there are many periods in the 1800 where the US dollar became stronger. You were able to buy more goods and services with your money. When Mr. Roosevelt decided to recall the gold in 1933, and subsequently Mr. Nixon closed the gold window on October 15th, 1971, we took all gold out of our money. We systematically started devaluing our money. That trend is not going to change. We are on a downward spiral to where one day the dollar, in my opinion, will be replaced with an alternate currency, probably maybe the Chinese or the Russians or maybe even the IMF will come out and issue a gold back currency.

To answer your question, sound money has to have something behind it. We don’t have anything behind our money anymore other than the full faith and credit of the United States government. Go look at $1. It says, “This is legal tender for all debts, public and private.” What does that mean? Your dollar is a debt instrument. It’s not money. Money, in order to be money, cannot be encumbered by something. All we use in our money system is an IOU that we pass on to somebody else. In other words, Patrick gives me an IOU and I go down to the grocery store and I use that IOU with somebody at the grocery store. It works very well as long as everybody recognizes that paper. If that grocer says, “I don’t recognize Patrick,” that I will use nothing. Patrick doesn’t have any money.

Price discovery and markets give us the ability to be able to grow. Click To Tweet

I think right there is where you hit something that I want to make sure that I understand correctly because you’re the expert here and has spoken to it for so long. I would say the relevance where you are making an exchange. Money in and of itself represents something. Inherently gold has tangible value. Paper doesn’t have tangible value. You look at the underlying premise of money is the whole mimic of exchange idea where your work, your labor, your goods, as you put it, how you take the resources of the world, the material of the world and combine it with the human mind, labor and production. It creates something of value to other people.

When a person exchanges that medium of exchange, your understanding that it’s worth a certain amount and them understanding that it’s worth a certain amount. The purpose of the actual exchange is that for the person that’s getting the money because they provided the value is now going to go out and do something else with it. The certainty that exists that it’s going to be worth the same amount when they go to exchange it is where the whole sound money idea breaks down. Is that an accurate logic?

It’s very much so. Money, when you think about it in its purest essence, is your labor that’s convertible into currency so you can buy goods and services. You go to work every day. You work 40 hours a week. You get a paycheck the other week. You’re able to take that labor and translate it into a tradable commodity. This is what we have to understand that if that’s the case, which it is. I have to work 40 hours a week, 52 weeks a year to make $50,000. The Federal Reserve can push one button on a computer and create $50 million or $50 billion. What have they done to discount the value of my labor if they didn’t have to do anything to get $50 billion, but I had to work all year to get $50,000? That’s not fair.

Craig, these are the points that those that have studied this understand, but for those that don’t study this that this may be their first exposure. That right there what you said, is the heart and core of the issue, is that when you have a central power that has the authority to increase that amount of money that’s in circulation through whatever means, number one, it’s fake. There was no value produced for that. It dilutes and it essentially takes from those that did provide value. It’s everyone. It has been going on for a long time. It’s still that the overriding narrative is to continue to do this because it’s a good thing.

Governments by nature will never be satisfied. They always have to have more revenues. If the government was to move your tax rate, and I’m using a hypothetical here, from 32% to 80%, more than likely we probably have a revolution. Is that fair to say?


If they leave your tax rate where it is and they devalue your currency, they can get the same effect. You don’t even realize this happened. In other words, if they hit you with an 80% tax, you would revolt. You wouldn’t pay for it. If they devalue your money every day and you have to use that money to survive, they are in essence taking more money from you in the form of depreciating the currency. They can’t tax you so they depreciate your currency. The Chinese are famous for this. They’re currency manipulators. This whole bit about our trade talks with China, it’s a joke because if tomorrow we cut a new deal and they don’t like the deal, they’ll play with their currencies and work it out through their currency. This is what the Federal Reserve has done. They’ve stolen from every American. Years ago, we did a study about it.

We can argue that there have been $100 trillion that’s been stolen from the American people since 1913 when we formed the Federal Reserve by what’s called financial repression, by paying people an interest rate that’s substantially lower than the rate of inflation. We’ve seen that happen and by using inflation as a form of taxation. I did a whole paper for the Congress years ago entitled the uses of inflation. I showed how back in the ‘50s, our Federal Reserve chairman wanted to do away with federal income tax. He said, “We don’t need a federal income tax. I’ll play with the currency and we’ll get our revenues through the currency.” Nobody talked about that. His name was Beardsley Ruml. If you read what he was proposing to the federal government, it will turn your hair.

Deficits don't matter until they matter; and the day that they matter is a day too late. Click To Tweet

The introduction I made where the wool is over our eyes is that this type of conversation is not prevalent. It is something that affects literally everybody every day. There are different ways to approach this. The common narrative is so strong that a central bank is a good thing. It’s the lender of last resort. It protects us. I look at it as very similar to how we perceive the government in general. I say we, I’m talking as a society, not me particularly. As a society, the government is there because if they weren’t there, then we wouldn’t have roads or if they weren’t there then people wouldn’t have jobs.

You know the fallacy of that because the reality is if you go back 150 years ago in America, we didn’t have a Leviathan government as we have. People weren’t dying in the streets from malnutrition or for lack of healthcare. We didn’t have any of that. We didn’t have welfare or social security or anything back in the 1800s. I didn’t see elderly people dying on the streets or anything. We have to keep in mind we’re pretty a benevolent nation. We take care of each other. The bigger issue is it’s important that we hit on this. I could never have this conversation I’m having with you on that national television show. I could never have it because they say, “You’re a conspiratorialist.” The facts are out there. You know them and I know them. All a person has to do is read and use a little common sense.

You draw the conclusion that this Federal Reserve is a very failed experiment. We should unravel the Federal Reserve. We should abolish it. We won’t because of the powers to be as I write about Money, Morality & the Machine realize that the money is more important to them than morality. Keeping the machine going and Washington, DC is more important than at all. As a direct result of that, we are not going to see things change. Short of us having a revolution. When I talk about revolution, I’m not talking about a 1776 revolution with guns. I’m talking about people revolting and going to the polls and saying, “We’ve had enough. We want a government that will work for us instead of working against us.”

It’s interesting to see how humanity operates that way where something bad has to happen in order for there to be a paradigm shift. The reason why you can’t have that conversation and it’s very difficult for anybody to have that conversation especially with opposing opinions in an intelligent way. There are so many layers behind it that it almost gets to the point where it’s not the same context. Therefore, you are so many layers above context that it’s “I’m right, you’re wrong” type of rational thing.

It becomes an ideology. You’re right. It’s an ideological argument.

The physical revolutions, I look at where we’re at in our society, I don’t know. I’m hoping that people start to wake up, but at the same time it’s most likely going to be through some pain where people wake up and step back and say, “We’re going to be in this government shut down when we went this long. Why do we need the Federal Reserve? Why do we need this?” Hopefully, people started waking up and asking more questions, better questions.

I said on national television the government doesn’t produce anything, so why are we worried about it hurting our GDP? The government spends money. We have to worry about if the government can’t process small business loans and small businesses can’t operate, and that would affect GDP. I get that. As far as I’m concerned, if Donald Trump wants to do something brazen, fire the 800,000 workers like Ronald Reagan did with the air traffic controllers. They’re non-essential employees anyway. Has your life been affected since they went on vacation? I say get rid of them. Let’s get rid of a million employees at the federal level and let’s reduce the size of government and who knows? Maybe we can even lower taxes ultimately. There’s a big flaw. I want to bring this up before we get too deep in the weeds. The flaw with the Federal Reserve is simple to explain to every single American. Watch this, Patrick and Craig, we moved to a desert island and we start a money system.

The 2008 crisis is not an exception. It's a rule. Click To Tweet

We get the local guys. We come up with dollars. We decide we’re going to use dollars. We lend out $1,000 to the locals at 5% interest. Now the locals owe us $1,000 principal and $50 interest. If you and I only printed $1,000, how can they pay us back? There’s not $1,050 out there. I have to create another $50. I lend that out. I need to borrow more and more. That’s the point. Every year you’ve heard the feds say our inflation target is 2%. They have to have inflation to survive. Let’s say it’s 2%. Every 50 years, you lose 100% on your investments. That’s not a very good deal. Nobody is talking about it in these terms. It’s flawed. It doesn’t work. That’s why you wonder why we’re talking about trillions now. Go back to the $1,050. We need to create $1,050 payback. We need to create $1,200 payback. Now you know why we’re at $100 trillion. Just so your readers know, if you were to spend $1 every second for the rest of your life, it would take you 32,000 years to spend $1 trillion. We owe $22 trillion of those?

Plus you add benefits or social programs, Medicare.

Our long-term liabilities are well in excess of $150 trillion.

I’m glad we started by getting into the morality of it because of a lot of the other episodes that have been done have talked about the morality behind things because I look at that being one of the foundational tenants that people don’t understand. I’ll bring up an example. I made the mistake of turning on the local news to see a Jazz game score on a snow report. On there was basically, there was this huge rally of people that all opened their businesses, opened gyms, the food bank opened up for the federal employees that didn’t have any work who are struggling financially.

I look at the nature of us and the nature of us wanting to help. There’s this confusion associated with central powers what it is and what relevance it has, whether it’s a good or a bad thing. I’m bringing up that people naturally want to do the right thing and do good for society. The government, in theory, I would say right now isn’t necessary. You look at how it continues to perpetuate and it strengthens the paradigm and makes it all the more difficult to get people to wake up. It’s inevitable because of how extreme the negative results and the outcomes have been. Right now it’s getting papered over until who knows when. It could be any type of event but when it goes, it’s going to go quick.

When it goes, you’re going to see the unraveling very quick. When people talk about a crisis or a meltdown or a recession, we’ve got to keep these in real terms. We went through the Great Depression in 1933. If you talked to anybody that lived during the Great Depression, they’re now in their 90s. They will refer to the Great Depression as the good old days. They don’t see it as negative. We went through recessions in America in the ‘60s and the ‘70s. We had the inflation crisis in ‘79, ‘80. Here’s my point. When we have meltdowns, people get rich and people get poor, but you don’t have people dying in the streets or lining up for food. It’s not how it works anymore.

I hear people calling for the market is going to melt down. You start thinking to yourself, “Is it going to be Mad Max at the grocery store? How am I going to feed my family?” No, it’s not going to be that way because there’s no benefit. I have one neighbor who half of his house is underground. I said, “Richard, what are you doing?” He said, “It’s when the bands of criminals come down the street.” I said, “Are you crazy?” We have a military. We have the police. This is the point. In run-ups in markets, people get rich, people get poor. Drops in markets, people get rich, people get poor. What we’re trying to do is wake up the American people and say, “We’re going to have more crises.” 2008 is not an exception. It’s a rule.

We have them every so many years in America. You need to be prepared for them so that you don’t panic. Think about if you didn’t panic in 2008, you’re already back to where you started and you’re way ahead of the game in stocks. We try and show people that if you have a diversified portfolio and that you have planned your future, you’re not going to have to worry about these ups and downs in the market. You’ll be able to sleep well at night and know that you have a game plan that’s protecting your financial future. That’s why I wrote the book, Money, Morality, & The Machine. That’s why the deal I cut with the publisher was for every one book we sell, we give a book away because we want to wake up the American people. They’ll call programs like yours to discuss these issues because the American people have the answers. We’re smart.

Sometimes our intelligence gets stifled because I’ve thought oftentimes crises are a good thing at a large level, even at the individual level. As human beings are so resilient and when we’re put to the test is where we thrive and where we learn and we discover.

TWS 06 | Capitalism

Capitalism: When we’re put to the test is where we thrive, learn, and discover.


It normally takes a crisis for a major paradigm shift to occur. Is anybody going to tell me that we don’t need a paradigm shift in America? Have you watched the news? Have you watched Alexandria Ocasio-Cortez or whatever her name is, talking about we want to eliminate billionaires? That would have been good. Let’s see, maybe we should not allow a John Rockefeller to be a billionaire. Nobody would have light or maybe Bill Gates, we shouldn’t let him be a billionaire. He’s revolutionized computers. This talk is crazy that we have coming out of Washington.

It’s done under the guise of morality that this is the right thing. People should be equal. Not understanding the nature of equality and what that means. It’s interesting. It goes to show that this pervasive message of what is moral, what is ethical, how things should be, and what the purpose of government is. It’s out of whack. There are strong voices on both sides. It’s become this right divisive fight. That’s why the truth I don’t think is discovered unless that fight gets magnified. There’s a crisis. Suddenly people wake up during that typically. It’s interesting. It’s a fascinating time to be around where you and I can talk about this. The message can be spread.

Craig, these are our opinions. This is how we see things. We’ve connected the dots in so many different areas. We’ve read similar books. You have a much more extensive education and background than I do. I look at our ability to communicate our ideas. That’s going to continue because there are principles of truth that are true. People feel that and when it’s applied to specific situations, that’s when wake up occurs. Right now, it’s a difficult time. It’s also exciting that you can start to see what’s going to happen in the future.

You hit something that strikes me. You’re right on the money. Truth is it doesn’t matter whether you believe it or not. It doesn’t change what the truth is. It’s like a lie. A lie has to keep changing in order for it to live because if it doesn’t keep changing, it will die. The truth is the same now as it was 10,000 years ago as it will be 10,000 years in the future. You said something about equality that is spot on. A very dear friend of mine, Mike Savage, you probably know him who has a national talk show. He has a saying that says, “You can have no equality without quality.” I want you to think that through. We can’t have equality in this country unless the people are quality people.

It normally takes a crisis for a major paradigm shift to occur. Click To Tweet

Look at the people who are calling people racist, are they quality people? I don’t think so. We’re looking for this equality on whose scale on some guy from Black Lives Matter, from Antifa, from the Tea Party. Whose perspective are we looking at here? This is the problem. We’ve lost our ability to be human with each other. I could argue it’s because of cell phones and all this stuff. We’ve lost our humanity. If we lose our humanity, De Tocqueville told us that the greatest strength we have as a nation is our humanity. I hate to sound negative. I feel very optimistic about the future of America. However, the next ten years I think we’re going to experience some very difficult times.

Craig, everything you said has been brilliant. I look at humanity and I’d also say that during times of crisis is where humanity shines too. You saw many examples, whether it’s natural disasters, how people come to the rescue. I think we’re driven that way. We have this instinct inside of us to do the right thing. There are exceptions because we all have an irrational side of us as well. Generally speaking in crisis, you have a lot of good that comes from that. It is so much divisiveness. I had a cool experience a couple years ago going to Hawaii with my kids. It was a Disney-type of resort that they have there. We were swimming. There were these guys like a gangster, tattoos they had. They were like human having discussions with me laughing. It’s one of those things where everybody has this humane side. We all in a sense will resonate or talk to one another even though there are so many differences. It’s powerful but typically, the environment is what creates so much divisiveness.

TWS 06 | Capitalism

Tribe: On Homecoming and Belonging

What you brought up is so important. We should elaborate on this. There’s a book out that I encourage you to go read. It’s called Tribe by Sebastian Junger. In the book, Sebastian Junger studied war-torn societies, England after the famous bombings in London, Kosovo, and Sarajevo. He found out something fascinating. He found out that after the crisis was over, the people wanted the crisis to come back because when the crisis was happening, neighbor was taking care of neighbor. Brother was taking care of sister. Mother was taking care of son. Everybody was taking care of each other. In London, they would go down to the air raids bonkers when those sirens would go off. After the war was over, what the English people did was they congregated down in the bomb shelters. They missed getting together. Here’s the point, do you remember how tight we were as a nation in 2001? Remember George Bush on that puddle, “The people that tore down these buildings, they’re going to hear from all of us soon.” I felt like an American.

I’ve got to tell you something. We’re going to have another crisis. We have threats all over the world. I’m not going to telling you militarily. I’m talking about financially. We got China. We got Russia. Don’t underestimate India by any stretch of the imagination. The European Union, they’re trying to hold themselves together right now. Keep in mind, the European Union collectively is a bigger economy than ours. Individually, they’re not. As a European Union, they are bigger than we are. We have a lot of threats that we need to be thinking about on a long-term basis that is existential to this nation. One of them I believe happens to be our money system because if you devalue our money system, how are we going to be able to fund anything to be able to protect our interests? I’m incredibly concerned about the future of money because money, as much as we hate to admit it, has the morality to it. I talk about this in my book. Every moral decision in America has a financial consequence and every financial decision in America has a moral consequence. We’re not thinking in those terms.

Adding to that, I’d also say that behind every transaction is the nature of a human being to provide value to one another and use their abilities, use what their unique at, and also the process of figuring out what is valuable to others. It’s one of those things where money also has a very individual aspect in addition to what you mentioned.

Sometimes people misinterpret money too. Think about the guy that’s got $5 million in the bank and he’s drinking himself to sleep every night. He doesn’t think he has any problems because he’s got money. I would argue his problems are worse than the guy that’s on the street who is a drunk, who knows he’s got trouble because he can’t mask it because he lives in a fancy house. This is where we are in society. Money is merely a tool. It gives us the ability to trade, to buy, to sell, to live our lives. It shouldn’t represent who we are. My checkbook should have nothing to do with the quality of human being that I am. The minute that it does, we’ve lost as a society. What do we need government for? If men be angels, we don’t have any need for the government. The reality is men aren’t angels. The reality is men do things very immoral. That’s why I was very disappointed in 2008 that none of the bankers or some of the people that created some of the problems like Mr. Mozilla didn’t have to pay a price for this. Think about what happened in 2008 and nobody was held accountable.

It was worse. They made all the mistakes but yet all of their problems were solved for them.

That’s why I think the average American is getting very discouraged. They’re saying there are two sets of rules. There are sets of rules for the power of powerful people. There’s a set of rules for Hillary Clinton and those people. There’s another set of rules for me. That’s why most people are discouraged right now. The good news is we still are the greatest nation in the world. We still have the greatest capital system in the world. What I’m hopeful for is that these politicians have overplayed their hands. What we saw in 2016 is the beginning of, for lack of better term, a new popular populism in America where the American people get involved. I was very happy that the House went to the Democrats. You’re going to say, “You’re a Republican conservative. How could you say that?” Do you want me to tell you why? Because the Republicans in the House didn’t deserve to hold on to the House because in 2016, what did Donald Trump come back to the White House with? The American people said, “Build a wall.” The American people said, “Did this.” He’s doing those things. Isn’t that what he’s supposed to do? Isn’t that what he run on? Isn’t that what he got elected on?

If we have more of that, then the people are going to say, “If you’re doing your job, we’ll reelect you. If you’re not doing your job, we’re going to throw you out.” That’s what they did to the Republicans. We have a very healthy democracy. When the Republicans didn’t do what they promise in 2016, 2017, 2018, the American people threw them out. Now you’ve got Democrats in there. If they screw up, hopefully the politicians realize that until we start promising and following up on fulfilling those promises, we don’t have a chance to govern. If we do that, we have a bright future ahead of us.

I find it interesting your last couple of statements because you’re right. It comes down to what we as people believe and understand the influence that we do have by electing certain officials. At the same time, we make election decisions in this case based on our belief system, based on what we know. I look at how we’ve been conditioned as a society to understand government, understand their purpose, and understand their nature. That impacts the way in which we vote, where we do vote because this person is going to create jobs, this person is going to do this and this person is going to do that. Maybe you can end with your opinion here, going to quality, the quality of a collective people right now I would say isn’t necessarily making decisions politically electing certain people for the right reasons. As we shift as a society and understand whether it’s the purpose of government or whether not wanting to be taken advantage of because we’re aware of what they’re doing and why it won’t work. That will be hopefully the shift that can create some influence politically where we want different results than we want right now, which would definitely shift power.

I hope you’re right. You’d like to think that the American people get it right every so often. The problem in Washington, DC, I wrote about this in the book, Money, Morality & the Machine, the whole concept of that book is it plays off of Dwight Eisenhower’s warning to us. Be aware of the military industrial complex. What we do is we show how that military industrial complex is a type and shadow of other things that are going on in our government. Here’s how it works. The Congress appropriates funds. They go to build bombs, tanks, so and so forth. We need that for our national defense.

We, the people, are the government. Click To Tweet

Defense contractors turn around and give donations back to the congressmen and get them reelected. We wonder why some of these guys are like Ted Kennedy in the Senate for 40 years because they have this incestuous relationship with not just the defense contractors but everybody that contracts with the federal government. Whoever is contracting with the federal government, I guarantee you is giving money to the political campaigns. That’s the problem. If we break that, then we’d get our government back. We have the best government that money can buy right now because our politicians are bought and paid for. Our politicians shouldn’t be bought and paid for. The only people they should be responsible for is the American people. That’s why I’m grateful that you’re doing shows like this. That’s why I’m grateful for hosts like you that are talking about these issues. I am convinced if we engage the American people in a dialogue, we will fix this problem. We, the people, are the government.

You’re absolutely spot on there. There’s a lot more going on. I think there was more podcast created in 2018 than ever before. They’re a lot smarter than I am because I’ve been doing this for over ten years, there’s a lot of success in most podcasts. That’s also a good thing because it’s helping spread certain messages. I hear more of it. Craig, thank you for what you’re doing. You clearly contributed trying to understand how our seemingly complex system works and what are the principles behind them, the morality behind it. Thank you for what you’ve done and continue to do. We’ll support you in every way possible. Why don’t you let the readers know the best ways to follow you, see what you’re up to when you speak on this national show live. If you want to talk about ways in which people can follow you, that would be awesome.

I’m a major contributor to Fox so you’ll see me on Fox Business or Fox News every week or so. The best way to stay in touch with us is through the website, The publisher was gracious enough for every one book we sell, we’re able to give a book away. I don’t know how big your audience is, but I’m sure, 50, 60, 70 books, if they call 1-800-289-2646 and mention that you were listening to the program or mention Patrick’s name, they will send you a complementary copy from the publisher of the book, Money, Morality & the Machine. No hidden charges. They don’t say, “It’s $5 postage.” Everything is free. You call that number, you put your name, address, phone number down and they will send you a complementary copy of the book. All we ask you to do is read it and then engage with somebody like Patrick. I don’t know if you take call-ins, but let’s talk about these issues. Let’s get a number of opinions out there because I’m convinced in a multitude of counselors, we will find wisdom. The best years of America could be ahead of us if we fix some of these stupid problems that are very fixable.

You see signs everywhere that people are getting more engaged, more aware, learning and there’s a lot of accountability associated with media these days. It hasn’t been there before. It continues to improve and ensure that the messages that are out there are sound. We’ll make sure your book and the links to it gets distributed on everywhere we post the podcast and in our social media channels as well, and articulate that offer.

It’s great being with you. I look forward to doing it again.

Likewise, Craig. Have a good one. Thanks for what you do.


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About Craig R. Smith

TWS 06 | Capitalism

Craig R. Smith is Chairman of Swiss America Trading Corporation, a national investment firm specializing in U.S. gold and silver coins. Mr. Smith founded the company in 1982 out of a bedroom in his home with $50.00. It has since grown into one of the largest and most respected firms in the industry known for its dedication to consumer education and safety.

Mr. Smith is an expert in many forms of tangible assets including; oil, precious metals and U.S. numismatic (collectible) coins. He is a student of history and an author of nine books.

Mr. Smith is sought after by national media for his insights on breaking news because he instantly engages audiences with his common-sense analysis of major political and economic trends. Craig’s door is always open to the media. Over the past two decades, Mr. Smith has been interviewed on over 1,500 radio and TV programs. He has also been featured in various print publications. He is a former columnist for and writes economic columns for

To receive your complimentary copy of Craig’s book Money, Morality & The Machine, please call (800) 289-2646 and mention that you as a listener of The Wealth Standard Podcast!


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