September 13, 2017

Andrew Gause
THE REAL WORLD OF MONEY

Andrew Gause may just be the top man anywhere for the highest quality analysis into the world of money we all live in. Andrew is a currency historian, an internationally recognized expert on the United States monetary system. He’s written two books, “The Secret World of Money” and “Uncle Sam Cooks the Books”. You can order these books as well as speak to Andrew personally. As a One Radio Network listener, you’ll have highest priority in his phone time. His # is 800.468.2646

 Show highlights:

-3 trusted aphorisms from days of yore, save your money, pay your debts off early, live debt free, are now are the worst things you can do with your money.

-We buy gold and silver coins for way into the future, not for today or tomorrow.  Don’t buy more investment assets than you can afford, so you don’t have to sell early.

-Numismatic coins have no leverage.  No contracts, options, or futures, it’s all cash and carry, along with a fixed supply.

-The introduction of grading services in 1987 made a sea change in the numismatic coin market.

-China is doing gold futures contracts, buying gold from Russia and elsewhere.  The Yuan is a new currency, introduced in the 1940s, and doesn’t have clout.  To make the yuan stronger, China needs to convert them to gold.

-History of merchant bankers and how megabanks got started by standing in the middle of transactions.

-Venezuela introduces a new international payment system to liberate themselves and their trading partners from the dollar.

-Why do we need a debt ceiling?  After the Federal Reserve was given the power to create dollars in 1913, it was free to inflate the money supply.  Debt ceiling was imposed as a fiscal control to limit the supply of treasury bonds.

-The Fed created 2 trillion dollars in 2017.  They monetized all kinds of debt instruments and thereby increased the money supply.

-Jeff Leach of Goldman Sachs said everyone should own physical assets such as gold.  Odd things happen when liquidity falls.  It’s an issue of counterparty risk-there’s not enough gold and silver to cover all the contracts.

-Deutsche Bank is seeing bubbles.  Blankfein of Goldman Sachs said yields in corporate bonds are down;  he’s worried.

-Jamie Diamond of JPMorgan & Chase says Bitcoin is a fraud.  Right now it’s a novelty, but as it gets bigger, problems will develop, and they will close it down.  It is a fraud – an emperor without clothes.  They’ll keep the block chain technology and throw Bitcoin in the trash.  Bitcoin marketing showing a coin is misleading – there is no Bitcoin coin.

-Equifax hackers are looking for payment in Bitcoin.  Equifax execs sold stock after the hack but before it was revealed.  Will the Justice Dept. pursue them for trading on inside information?

-80% of American families don’t make enough to cover their current standard of living.  Are surviving by deficit spending.  Inflation has outpriced wages, causing a mispricing of the value of labor.   How long can we continue?  A debt limit on Treasury is like running out of zeros.

-We keep stepping away from the checks and balances on our monetary system.  Don’t store your wealth in Federal Reserve Notes.  The reasonable thing is to store it in gold and silver coins.

-Dollar-denominated debt has doubled in the last decade.  By creating new bonds, Congress increased the debt by $317 billion yesterday, suspending the debt ceiling until December 15.  Has the same effect as increasing the money supply.  $15 billion went to Harvey, $302 went elsewhere.

-Treasury Secretary Mnuchin’s solution is a longer amortization schedule, not cutting the debt.

Hour 2

-US has been out of the ability to borrow since March.  The $317 billion means we’ve now borrowed enough money to pay back all the debts incurred since March.  With a probable argument for debt ceiling raise in December due to extraordinary circumstances, politicians are in a good position for the mid-term primary elections.

-Trump administration is full-on for a tax deal.  Mnuchin says he’s hopeful for January.  But we haven’t even done a health care deal yet.  Gold down, dollar up now.

-Tax reform could increase revenues and decrease the need for so much borrowing.  Integral to get corporate tax reform as soon as possible.  But lots of breaks in the Congressional calendars.  Congress is in recess for 6 weeks between now and December 31, so running out of time for a 2017 tax reform bill.

-Jack thinks its hilarious that Jamie Dimon calls Bitcoin a fraud, when JPMorgan & Chase had a $13 million fine for stinky dealings.

-George said US money is recognized as money because it’s issued by the government and good for tax payment.  Why, when precious metals were removed from money, did money still function as money and precious metals did not?

-Glenn says the conflict in Afghanistan is over opium, but they also have the largest supply of lithium deposits in the world, needed for a growing world demand for batteries for electric cars.

-China wants to electrify everything and put in electric vehicles.  Will create lots of demand for batteries.  Congressional policy can alter the playing field for manufacturing.  US electric vehicles now get a subsidy.  If no subsidy, and no tariffs, China could come into the US and take over the electric vehicle market.

-Only US shoe manufacturer left is SAS – San Antonio Shoemakers.

-Eric asks if banking laws written in the 1930s make it illegal to question the national debt.  You can’t say we don’t owe that.  We must honor previous spending.

-Is it true climate change deniers are breaking the law?   It would be hate speech.  Andy would rather have free speech and no suppressing of thoughts.  Let sunlight be the disinfectant of ludicrous thoughts.   But man-made climate change is now a religion.

-The vast majority of doctorate economists are employed by the Fed or have contracts with them, silencing any dissent from official Fed policy.  The same thing happened in the weather field.

-Stevie Wonder having a big concert for Hurricane victims.   He said anyone who doesn’t believe in climate change is unintelligent or blind.

-What does Andy think of the documentary “The Chinese Hustle”, shown at the Toronto Film Festival yesterday.  US short-sellers found out how crooked Chinese companies were.  Considered to be a sequel to “The Big Short”.  China’s financial system is poorly regulated.  Another financial movie just out is “The Tulip”.

Even Jeff Berwick, the Dollar Vigilante, admits he has gold and silver holdings.  2 schools of thought on investing, either diversify or put all your eggs in one basket and watch the basket grow.

-New scheme for digital, spendable gold.  Someone else holds your gold – Andy is out.

-Ellen asks for an explanation of the debt ceiling crisis and what would be even a  short term effect of a default.  Debt ceiling suspended until Dec 15.  Even a short term default means people would lose confidence and act on it.

-Nancy asks about long Bitcoin being the most crowded trade on Wall Street.  That’s because Bitcoin is going up.

-Hillary says the book “1984” means we should all trust the government a bit more.  To her, government is always benevolent.  Even if it’s a conspiracy, it’s a conspiracy for your own good.

-Bullion or numismatic coins, which ones to buy?  What protection does it provide?  Numismatic coins are a means of storing wealth for the long term.

-Change coming up in a few months on the Fed board.  Potential candidate Gary Cohen showed he wasn’t truly loyal to President Trump and will lose out.

-Twitter suspended Hope Hicks’ account after alt-left targeted it.  Happened one day after she was appointed as President Trump’s new communications director.

Juie asks for advice on a new reverse mortgage that will roll in taxes and insurance.  Rates are lower than in 2015.  If taxes and insurance are put in the mix, will eliminate 2 more tasks you’re responsible for, and furthermore the bank will be financing them.

-US unfunded public pension liabilities surpassed $5 trillion.

-Stu asks for recommendations for stocks that will go up due to rebuilding after the hurricanes in Texas and Florida.  Building material companies – Gypsum board (USG Sheetrock owns the copyright for sheetrock), lumber, roofing material, Tyvek, concrete.

-People flooded out by Harvey got overshadowed by people flooded out by Irma.  That’s the news cycle.  Millions still without power in Florida.  Donate directly to people in Texas rather than national organizations.

-Stu says there is a strong chance people in east coast will freeze in the dark in the next few years.  Perfect karma.  Eric says most warmists are anti-gun so they can really only push their agenda so far.

-Puerto Rico hit by the storm Irma, and they already owed $70 billion.

-US has over a million kids 6 years old and younger on psychiatric medicine.  Half a million people since 2015 died from opiods.  Root of the addiction was that they ran out of prescription opiods like Oxycontin and turned to heroin because it was cheaper.  Drug scourge started because of doctors that wrote the script after being given money from pharma to push the pharma drugs.

-Corporate tax revenues make up a increasingly shrinking part of our revenue because they’ve been driven overseas to escape the high US corporate tax rate.  But if the corporate tax rate was cut and companies moved back to the US, the increase in payroll tax revenues could make up for all the loss from corporate tax cuts.

-Danny asks for a safe place to avoid having the value of your account deleted by the powers that be.  Physical possession.

-Will having a home internet business give John a tax shield against his wife’s $220,000 income?  Best shield is a home that you own.

-Is the home mortgage deduction threatened by tax reform?  Too many lobbyists make that unlikely.  Pretty unlikely that any tax breaks will be taken away from those that get them.

-LLC usually the better way to go for a home business.

 

 

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Andrew Gause and The Real World of Money, September 13, 2017 ONE

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