I am max kaiser this is the kaiser report 1st of all i got it shout out congratulations to my friend Ronnie Osullivan who have won 6 times now the World Snooker championship up there at the crucible in sheffield thats in england ronnie is the mozart of stoker and as you can tell by by american accent i have no idea how to pronounce snooker but it doesnt change the fact that ronnie is the greatest of all time in that sport that i cannot pronounce congratulations ronnie and i hope to have you back and cause report soon dont be a stranger ok now lets talk with stacey. I think its something along the lines a snoop snoop at. Something like that anyway you know what max was a champion in predicting this sort of headlines then druckenmiller speaking of london i guess they used to run the quantum fund out of there right the in george soros yeah im not sure where they dumbass styled probably somewhere waiting. For certainly they did crash the pound and that is this guys then druckenmiller he was on one of the Financial News shows here in the United States and he predicts inflation and deflation out of the ordinary huge numbers he sees inflation will hit 5 to 10 percent over the next 4 to 5 years and he said thats based on what he heard at virtual jackson hole that the fed is encouraging the government to print more money more stimulus so fiscal stimulus and thats like m m t he said and this is going to cause inflation on the other side he said theyre all there asset price bubbles that the fed is stoking is going to cause collapse which will cause a 3 to 5 percent deflation on the other side so both tails he calls it right well i mean this is youre right because it plays into been talking about this for a while for a couple of things 1st of all definitions for the words inflation and deflation this is that the fact that he can say both are happening at the same time or could happen the same time you have to ask yourself whats the whats the use of even using words like inflation or deflation because a stock doesnt describe the whats going on with the economy weve outgrown those words the economy is moved beyond those definitions were in a different type of economy and market completely you know ive called it things like buy flake. Weve talked about that last year we have both inflation and deflation we talked about having financial window she. Here or the forces of inflation and deflation are butting up against each other and then the the average person is kind of caught middle like you would be caught in a storm a boat in this kind of storm and its being ripped apart and youre spinning we called it a Bermuda Triangle of finance where youre flying over the economy and all the gauges are going in opposite directions and theres that inflation is that deflation the my upside down we call it the poseidon adventure of the economy where Steve Mcqueen is and his band the people escaping the ship are going in the wrong direction because they dont realize the upside down weve been this is been a common thing so stanley drunken miller is that stating what weve been saying now for a number of years that it looks like both but it cant be both it has to be Something Different and what it is as weve been saying is that its neo feudalism its the fed is printing all this money as he points up but its not inflating the economy because its being used to take the Economy Private in a huge leveraged buyout like if Michael Milken were running the world this is what he would do its neo feudalism stanley thats thats what i call it by what it really is yeah and its that command and control in order to maintain that status quo of the neo feudalism whatever you want to call it the interference in the markets which are reflecting just merely nature and including in it time and energy those are the 2 most important ingredients to measuring you know our economy and time went negative with negative Interest RatesEnergy Prices went negative in the past year so it makes sense that you would have that swirling compass telling you are you up or down you dont know anymore because at a certain point you lose track and you could kind of see this in this next chart actually Jeffrey Gundlach says this could be the charts of the year and what you see is this crisis increased disposable income the bottom line there is dispute. Civil income. Excluding government transfers so Social Security welfare Unemployment Benefits anything like that including you see it is a huge surge going back decades this is like a huge surge in u. S. Income totally because of u. S. Government transfers so this is the thing that Stanley Druckenmiller says is going to cause the inflation but its also extraordinary that youre seeing you know we have gone through the Looking Glass that started in 2008 that we really had that a lot of the income. Of the ordinary american 18. 8 percent in 2008 came from the government and thats when baby boomers turn 62. 00 now you have that plus the pen demick plus all this collapse plus the financial collapse plus the negative Interest Rates and negative Energy Prices and we have 24 percent of income in america is from the government so were reaching a some sort of Tipping Point you know the Event Horizon is being passed but just postpone it come is being flooded into the system thats the money printing. And going to lax saying that while druckenmiller saying there is an inflation risk or its causing prices to go up. Simultaneously though you are living on a ship that is sinking due to the implosion of the velocity of money and therefore the collapse of the bond market and we know that the bond market has collapsed because the only way that america can sell sovereign bonds or government is to buy them back of from itself if america wasnt buying back its own debt then no no would be no bid there would be nobody buying the debt and like in 1971 the American Government would have to declare bankruptcy or insolvency which is what nixon did when he caused the gold window so net net you have. An economy that would be similar to what you might find at a funeral home its a cadaver thats being drained of all his life fluids but people are mistaken the formaldehyde of money as a reanimation of the corpse and that we should then put this corpse up on its own 2 feet and ask it to walk out of the funeral parlor which is asking too much of a corpse this American Economy diving 2008 theres been a lot of formaldehyde pumped in through the system but its still dead its dead today as it wasnt 2008 and these professional Money Managers obviously by their statements are utterly lost in the woods i have no idea what theyre saying they have no idea what they should be doing well part of the situation we find ourselves in of the topsyturvy them and where we cant tell up from down is that we do have a bifurcated economy where of neil feudalism right and because we have the u. S. Dollar and we can print it we dont need the bottom 99 percent so the top one percent in which Stanley Druckenmiller lives they get. The fed money thats the credit that is printed remember its credit is not money only the u. S. Treasury can create money they can issue bonds and they can print currency so the ordinary 99. 9 percent of americans live and that their economy where they have to rely on the treasury you know to and the government for tax policy business policy fiscal policy all of that stuff that would create in a real economy and obviously you know sense since nixon but especially under bill clinton we shift all of our economy to china right and and the top 1 point one percent have been able to live off all this credit so they get free credit for which they can buy up all the assets of the world and have an income stream based on that based on the real goods and services produced by the rest of the world and you know part of the military Industrial Complex and the intellectual property complex they get to get that stream based on all the credit created whereas the real ordinary person lives and that that all their economy and youre seeing like you know that huge rise in income. Is now hitting them because of this corona virus and that thats also going to cause turmoil we dont know how its going to play out but it could play out in this election because people have savings for the 1st time go online read it you could see people talking about having savings for the 1st time in their lives because of all this stimulus money thats being sent to them the enhanced Unemployment Benefits so you know there is something going on something snapping we wont know until it actually happens and we can look back and hindsight but its Something Interesting well thats an interesting point to make this possible income is going up but it doesnt mean that income is being disposed of he has that if people are saving it theyre not actually spending it we have main thats why the money velocity is down also is because yet disposable income if you are described as disposable income is up but people are saving it theyre not disposing of it so you dont see people people dont believe that the condom is coming back so theyre saving now this is also called the paradox of thrift and its of reviled by the keynesians and the money and the debtors out there who believe that you need to spend spend spend or the economy collapses but you know that is only true if you have a sound Monetary Policy and we dont if Interest Rates are 0 as you point out then the Michael Milken thickish of the economy is in full swing that is taking it private the mergers and acquisitions will continue until the meetings stop or the the beatings the mergers and acquisitions will continue until morale improves animal spirits improve right until animal spirits come back and if they never come back and we find ourselves with oh my god only 5 people own mind the 9. 8 percent of the economy how did that happen well you know if you watch the show for the last 10 years you would know how it happened yeah and fact when he said that people are saving americans are saving all this cash and its huge savings rate its like chinese level Savings Rates and why did the chinese save some. Well because there is no sort of they have a really nice feudal system where this a concentration of wealth is vast so they want to save it in order to be antifragile of course because Health Care Costs things like that might wipe out their familys wealth so they have to save a lot because of the per carry ness of precariousness of the whole situation so of course like your experience over the last few decades where you havent had savings for for decades because you have to work or work and work 2 or 3 jobs member as george bush has said like uniquely American Well of course like you are you want to youre still you have posttraumatic stress disorder from that from these stressful years and you finally could say ok here it is ive got some savings right the depression generation were great savers yes yes my mom would you know say for pennies on her nickels and put them in depend wrappers and take them to the bank and get cash around every few months right there in that was something she learned as a child of the depression these young millennial generation z. Or china are children of you know the debt apocalypse you might call it that this is what stand talking miller had talked about in terms of the deflation hes expecting hes expecting and asset prices of the fed controlled economy not the treasury you know control the economy the people that have to live within the treasury and some their checks the treasury for their taxes and stuff like that or receive income from the treasury so this is these are 2 different economies and theyre about to collide this could be like a neutron star colliding very soon they were happens when new tron stars explode it gives us gold casts were going back to gold were going to take a break after this detroit star explosion and a meteor or hits and when we come back we will be here at all itll be complete obliteration dont go away. The world is driven by a dream shaped by phone person with those great. Dares thinks. We dare to ask. That the believe it is smear those who really can. Show that they can just be suitably. Flat with that are supposed to notice that us they have something that. No no no has to be in a bull episodes didnt go to see in your the. Slayer during your force wake would be near must of missed with not thoughts about spirit i pity you it was emotional sick spinnin found in the. Stadia cruel should. Show the school schulmans for you to closely it will put us to move to. The story list so they will but what is. One else chose seems wrong. But all quotes just dont call. Me youll all get to shape out just a cupcake as a kid and it again should be close to trail. When so many find themselves worlds apart when shes to look for common ground. Welcome back to the kaiser report im max keyser time now to go to the to the oracle of secaucus the scene here of bayonne they want to only michael pentel of pent up port dot com michael welcome back. Good to be with you are tremendous to see you. Oh is a good time with michael pent all right lets you know usually taught kind of macro stuff and i wanted to dig into some whats happening in your industry folks that are doing what you do and trying to make money in these markets and start with Warren Buffett you know hes dumped all of his Airline Stock recently most of his bank shares he went long barrick gold thats quite an interesting move there and japanese conglomerates shorting america the thing that he said he would never do michel this is a traditional emblematic person who says you know just buy and hold america and now hes buying gold so i guess you can teach an old dog new tricks he no longer believes in the sanctity and the purchasing power d of the u. S. Dollar so he selling dollars by interest is metals i love who i think is very wise and hes welcome aboard my team he has to be nimble thats one thing you need to be in this industry is dead ball you know you dont make money by sticking on to a sinking ship now a stand druckenmiller neither famous money manager worked with george soros for a long time more of the best in the business he he made entering statement he thinks that inflation could easily hit between 5 and 10 percent because according to him weve got this to fact or modern monetary theory going on at the same time he thinks you could see deflation in terms of asset bubble bursts right so this is like 2 conflicting forces in the economy. All at one time it sounds i guess vaguely like stagflation vote what do you make of that michael i mean i like mr druckenmiller but he seems a little bit conflicted there there are 2 different Investment Strategies i have a 20 point model over the inflation deflation and Economic Cycle model and makes a heck of a big difference if you want to be hedged against stagflation or inflation or right or inflation where if you want to protect against just inflation and deflation so he better make up his his mind. Classing it collapsing hasnt prices would be very deflationary and you need totally different strategy than for one thats you know as i said a 2nd derivative increase in inflation i am heads right now towards just inflation and deflation and recession. I was hedged for a stacked lation from march to say august and ive changed wait until late august d and change the earlier strategy because we have a massive fiscal and monetary cliff that were going over and for those that believe like mr powell that you could just say i believe that we should bail have a chilling to hear Percent Inflation target instead of a 2 percent target that we just cant reach as we measure it based on the coup or deflate. You know doesnt mean you can reach it but as they say we had a 3. 3 trillion dollar deficit in fiscal 2020 that was borrowed money that was printed by the Federal Reserve and now this Balance Sheet that went from. 800000000000 in 2007 just 7 trillion in 2020. It increased by 3 trillion dollars in a matter of a few months the Balance Sheet max is now shrinking if you look at the past month the Balance Sheet has shrunk by 100000000000. 00 thats a big difference that increasing at the rate of about 500000000000. 00 a month thats a huge transient gap in the exhilaration of the Monetary Base and when you say that the fact that theres no more elegantly money no 1000. 00 checks going out of mr bernanke is helicopter as theyre often the 1st time in this country universal basically this is what caused the stagflation in the middle of this year but now again like i said even bear mr druckenmiller for just inflation deflation and recession intil the monkeys in d. C. Decide to. I think share each. Borrow trillions of dollars more bankrupt the nation even further and have the courage mr powell to print it all you know this modern monetary theory or universal basic and then this idea and it sounds like this election coming up and it sounds like its an election about whether america wants to be socialist or not is that a fair characterization whats fiscal and Monetary Policy has ever been in place that has ever been any country not only i see any country in the world that has been able to be successful and remove i mean just didnt deserve a policy for decades theyre still there and you read your is at 0 in straight policies and in to me we got off our observer policy for maybe a man and a nanosecond and then were already panicking and cutting rates in 2100 muster for anyone ever heard of the one virus they could reach 3 times in 2100 remember that we were backed into q. E. When the report archipelago so barely started we jumped the shark we entered into the threshold in the new era of u b r and modern monetary theory where we just say you know what you say in a moment well send you a check to do anything and if the democrats get in. Trouble harris whos on the democratic ticket as the Vice President as a spouse own 120000. 00 her. Judy every family there are virtually every family thats not or a quote rich ok so yes thats how you get that is how mr howell is going to finally achieve his core p. C. A 2 and a half Percent Inflation for many many years or at least as many years as it was below 2 percent and that is near the holy union between fiscal and Monetary Policy where you get money not just sent to wall street so they can gamble away you know so the robber traders can also join in and you send money to j. P. Morgan and he sent money to run to the traders through their 1000. 00 checks that arrive in the mail and thats how you get the 1st act lation and thats probably where were headed if thats where v. C. Wants to be in across the world and china may have got some tensions rising. Looks like theyre going to reduce some of their u. S. Bond holdings does it doesnt matter that china starts dumping bonds more u. S. Bonds more aggressively i mean cant the fed just print more money and buy them why is that a big event there michael well i think its a big event for the u. S. Dollars has your money and its worlds reserve currency status by more than 7. 00 u. S. Dollars going to lose that status i dont think is going to crash against the renminbi or the yen or the euro but he could lose a lot of its purchasing power even against other floyds the i currencies but i think china made decisions that i mean couldnt outrun just rain 80 and default on back were going to treasuries thats owed to china thats a big risk for china also the chinese are not really getting a huge Interest Rate on a 10 year deal you know the 10 year treasury is yielding 0. 6 percent. And you could be here in to 0 like the rest of the developed world maybe sure is a gee why am i going to invest my trade surplus in a bond that pays me nothing in the principle can be defaulted on by. I decree from the president so maybe ill do the smart thing and put my currency surplus in things that really mean Something WhitePrecious Metals i got to ask you this question youre a keen observer of markets and Global Finance this story about tech stock is fascinating so chinese has a Company CalledTick Tock SocialMedia Company and dot com mandates as emperor of the world that the china must sell america ticktock where this come from is this unprecedented in your lifetime or whats going on here michael well i mean im certainly not an expert in tech talk but i can say this we have a president who again im a political gentle for the man but he seems to be not only him but him and the Federal Reserve seems to be stretching the boundaries and limitations of what government is supposed to do so youre not supposed to Tell Companies a few will oversee his youre going to pay huge tax if you develop your products overseas are very important back here in the United States you use tax that doesnt really sound like capitalism to me although you know hes trying to fix the trade deficit by the way we did the biggest trade deficit this country United States has the biggest trade deficit is ever had in the last 12 years. In the last most traders it was largest remember that so. For all the bluster about trying to balance our trade deficit with reza wrote it just hasnt not worked but you know you want to say china spies on us like not a big admirer d of Big Government of china maybe they do im sure sure thats the case and tongue and trump by decree can say guess what youre selling that company where youre banned from this nation so nothing surprises me anymore by the way just in time the internet will bow i think if they did the Federal Reserve was not allowed to buy junk bonds i should think that would be ridiculous but guess what jury in your emergency we have learned one thing jury room and emergency our government in our stead change you. Forget about the constitution yeah i mean a center just driving on their driving a semi tractor through every legal barrier on the books that i mean ive seen the wall street for 40 years and ignore the law but this is getting pretty absurd so lets mean your got a hot hand over there pent up or dot com again this year looks like were going to have another big year over there and you know youve got your 20 point model to guide you through these turbulent markets and you you know if you make a mistake it shows up the next day so youve got to be on your toes a way like talking to you. Lets talk Portfolio Management for a 2nd barack all done the gold miners in general they seem awfully cheap compared to the price of gold michael are they dirt cheap or am i crazy well you might be crazy and they could be deferred cheap because you know theyre not mutually exclusive. But yes i think youre going to like gold to my portfolio consists of 3 things right now utilities Precious Metals and assurance those are the 3 things that might work for you and that is the case that has been the case for the last 2 weeks about about the last 2 weeks. Because this is were going over this massive fiscal cliff and i still hear people talking about the dont you know the state has your back well the thing is youre back with 0 restraints but look at the 2nd derivative change in the Monetary Base and will so hurt theres plenty of fiscal so work for the economy no there isnt all those robin hood traders that used their 1000. 00 checks. But all options on just one big bird and theres no further checks coming so wall street has a huge fiscal and monetary cliff a reality check not to mention the election chaos coming november 3rd eye is exciting going to carry this hour to a 2nd segment thats ok with their thanks for being on kaiser report michael wonderful all right when i was going to do it for this edition of the kaiser report with me mikes kaiser and i want to thank our guest pressure Michael Petro a pent up for dot com and stay tuned for a lot more coming your way by all. A new gold rush is underway in ghana thousands of ill equipped workers are flocking to the gold fields hoping to strike it rich here is a good. Day oh. Children are torn between gold. Was very poor i thought i was doing my best to get back to school which side will have the strongest appeal