CapitalCosm (Uncut) 01-14-2025

Did the LA Fires Just Trigger a HUGE Financial CRISIS?

you know if your house used to be worth $3 million and now you can’t Ure it so you’re not sure you could even sell it for $1 million you’re not going to take that nice vacation you’re not going to go out and buy a Tesla or anything um you’re going to hunker down and uh and find try and find a way to survive the coming Financial repricing of all your assets uh and you know we’re looking at something like that on both coasts coasts and since a lot of housing markets further in the US you know in the middle of the US are also incredibly

expensive like Denver and you know lots of of Texas markets and places like that uh this is the kind of thing that could be could spread from the coasts Inward and um cause a pretty serious financial crisis uh leading the government to bail everybody in sight out uh which puts even more pressure on the financial markets so you know it’s possible that this homeowners insurance issue turns into a really big um Catalyst for a financial crisis and who would have thought you’re watching Capital cosm my

name is Danny and today’s guest is John Rino John thank you so much for making the trip down to Capitol cosm sorry we were just talking travel uh pre-recording and I just uh I’m still in the mindset of taking trips and you know all this stuff so thank you for making the the E trip down to Capitol cm um hey Danny it’s good to talk to you again and you know travel is a is a pretty good jumping off place for us because as we talked about before we started there’s a lot of stuff going on around the world you know it’s not just

a US story really the coming financial crisis so um there’s not a lot of things to talk about that U most Americans probably aren’t paying a lot of attention to but that might be really consequential going forward yeah I’ll throw the ball into your court what is most topical for you right now what what do you want to talk about first and foremost well um you know let’s let’s start here in the US and then go to the implosion of Europe because I think the the most topical interesting story right now is that um a catalyst for the next

big financial crisis might actually turn out to be homeowners insurance which is kind of unexpected right you know a year ago we would never would have conceived of that but if you look at what’s happening in the um the populace Coastal parts of the US um a couple of months back there were two brutal um hurricanes that hit Florida and the Carolinas um destroyed a lot of property caused huge amounts of damage and human suffering and right now Los Angeles is burning you know this started like a week ago they had these

these horrendous wildfires and they are still burning as as we’re speaking right now and in both of those places what had happened previously since World War II basically is tens of millions of new people had moved in there uh into places that are fundamentally um unsuited for large populations because on the East Coast you got it’s Hurricane Alley you know um Miami for instance is guaranteed to be hit by a cat five hurricane headon at some point and the Damage will be you know trillion dollars or something and

California especially Southern California is a desert that is prone to wildfires and yet they’ve got 25 million people trying to live there somehow and now they’re all burning up um so this is you know it’s terrible for the people who are directly impacted by it but it’s also kind of this death spiral event for the homeowners insurance industry because um you know since since World War II the US has been def um debasing the dollar uh which is to say they’ve been increasing the um the prices of financial assets Like Houses so houses

have gotten much more expensive just as people have moved into all these places that do have periodic um um natural disasters and so the insurance companies are on the hook for all these multi-million doll you know Santa Monica houses that are burning up and um a lot of homeowners insurance companies are just pulling out of these markets now they’re just bailing on Florida and Southern California and that’s leaving tens of thousands and maybe hundreds of thousands of people with very expensive houses um that are

uninsurable and therefore unsellable so you you know we’re risking a kind of reverse wealth effect you know when the stock market is going up people feel smarter and richer and they tend to spend more money so that’s stimulative to the economy but when um when home prices home equity for a lot of people are crashing um that shifts that process into reverse you know if your house used to be worth $3 million and now you can’t Ure it so you’re not sure you could even sell it for $1 million you’re not going to take that

nice vacation you’re not going to go out and buy a Tesla or anything um you’re going to hunker down and uh and find try and find a way to survive the coming Financial repricing of all your assets uh and you know we’re looking at something like that on both Coast coasts and since a lot of housing markets further in the US you know in the middle of the US are also incredibly expensive like Denver and you know lots of of Texas markets and places like that uh this is the kind of thing that could be

could spread from the coasts Inward and um cause a pretty serious financial crisis U leading the government to bail everybody in sight out uh which puts even more pressure on the financial markets so you know it’s possible that this homeowners insurance issue turns into a really big um C for a financial crisis and who would have thought yeah not not I this is actually the first time I I hear this kind of uh thesis so just to make sure I understand this correctly a lot of these homes on the coast in places like Florida

California uh they effectively become uninsurable the fact that they become uninsurable uh that puts a headwind on their sellability their you know the demand for those homes that in effect creates a price uh a downward pressure on prices real estate prices that could spread Inland beyond the coast is that is that the the thesis there correctly basically yeah Le leading to um a big drop in consumer spending and investment spending and things like that you know the reverse wealth effect but but think

about it would you buy a house in La knowing you can’t buy homeowners insurance for it because you know the next Wildfire it burns up and if you could find a house that wasn’t burned burned to the ground that this well see the insurance companies that are in there now are now on the hook for the rebuilding so they will get rebuilt because if you know if you have insurance unless your homeowners insurance company goes bankrupt they have to pay up and uh let you rebuild the house but once you’ve rebuild it um

do you really want to live there in an uninsured house no you probably want to sell it but any potential buyer is going to look at it and go well I I can’t buy your house because I can’t insure it so yeah it could be be um the the Catalyst for a real downward spiral in real estate prices in some of these currently very pricey markets and um you know we’ve seen things like that in past real estate bubble busts uh but we’ve never seen anything um you know quite as serious as this where where for instance

in 2007 2008 home prices dropped by 20 30% in some real rare cases 40% but we might be looking at more than that in uh in some of these uninsurable markets because what is a house worth with no insurance on it you know you you got to get a phenomenally good deal to take that risk and that is literally what people are staring at right now because the insurance companies are pulling out of these markets and they’re cancelling people’s Insurance even if your house survived the hurricanes in Florida or

the current Wildfire um your insurance company might not want to take chance on the next go round you know and they they’re going to dump your insurance as soon as they can dump you as a customer as soon as they can and nobody’s going to pick you back up so th this is um potentially really serious in a in an unprecedented way we’ve never seen um Insurance be at the epicenter of something like this before can the insurance companies themselves survive something like this well the reason they’re pulling out uh in droves is that

um it’s financially dangerous for them to be in markets that are this expensive and this prone to natural disasters right but they end up losing customers too in the process yes yeah well you know from their point of view it’s um it’s better to lose the customer today than have to pay off on a 300 or a $3 million house a year from now because the customer is not going to pay you anything like $3 million in the you know in the ensuing three years it’s a hopson’s choice because on one hand they could lose they could the customer which

is bad enough but then on the other on the other hand uh they could have a huge payout that could far overwhelm uh what they collect yes yeah that’s and and see nobody knows the future all of this is just statistics right um Hurricane Alley is a random number generator it just throws hurricanes at the East coast of the US uh without any sense of where they’re going to land but um some of them are landing in populous places and causing massive damage and they haven’t been a cat 5 yet you know we haven’t

seen the big one hit Miami head on um maybe the you know on the west coast maybe these current fires in LA are going to constitute the big one from the point of view of the insurance industry and and um housing and stuff like that at least in the LA area but uh if what’s happening right now can happen then there’s no reason why something even bigger can’t happen so um you know the the possibility of something even worse than this I think is what scares everybody because this is as bad as most people could imagine

especially what happened in you know in Carolina uh the Carolinas with the the hurricane that that came in from the Gulf of Mexico and went straight up um and hit places that had never really been threatened before by hurricanes so first order effects it does it does appear that we would take you know this course of action uh people would Retreat from the coastal cities uh does that imply uh um kind of like a Renaissance in the inward in the Inland cities let’s say let’s say your Nashville tennesses let’s say um your

Cleveland Ohio things thing places like that could those see an influx of capital from people moving out out from the coast and into the land well if the if the coasts turn out to be untenable in other words they they just flat out can’t find financially support 20 million people in South Florida or 25 or 30 million people in Southern California um then those people have to go somewhere right because it’s it’s just not possible to live in these places financially uh so yeah they they’ll look for places that just as a

personal aside here when my wife and I moved out west 15 years ago and I just wanted a pretty place and so she did the research to find find a place that was more than just pretty and there are um websites that allow you to Overlay propensity for natural disaster on a map so you can see who has what right who who’s in danger of what and she found a place in Idaho that had nothing you know there was no natural disaster there um and so we ended up moving there but I think that kind of thinking is going to

be a big deal going forward people are going to um especially if you’re leaving Florida or Southern California uh you’re going to want a lot of things but one of the things you’re going to want is for this horrible natural disaster scenario to never play out again you you never ever want your house to burn down or the Earth to swallow your neighborhood or something like that or a gigantic storm just to wipe out everything you’re going to be looking for places where that’s not possible so yeah that that becomes a

real estate play there you know um safe localities are are going to look much better than they have in the past you know already a lot of people are moving to places like Missouri I keep hearing about that a lot because real estate is super cheap there same thing with parts of Ohio where you know you can get a pretty decent house for the price of a parking spot in Manhattan or LA or something like that so um I I think excuse me that kind of mindset once it’s set in will cause people to migrate to safer places but you know

that doesn’t spare us from the financial crisis that might flow from the misallocation of population that’s happened in the last 50 years because um um when you look at for instance Florida after World War II that that was kind of before we had air conditioning so Florida was fairly sparsely populated by today’s standards and then uh air conditioning became accessible and people just started pouring in so the demographic change was just huge and there there’s no reason to think that uh we reverse that and get back to

some kind of a balance that’s that’s better from a natural disaster standpoint anytime soon it’s going to take a long time for it to happen and it’s going to take a lot of financial hardship to incent a lot of people who just moved Florida to move out you know and not to say I don’t think Florida is a good place to live I I just think it can’t financially support the population that lives there now so something has to happen to bring it back into balance yeah totally anything else you want to cover on this front before

we move over to Europe now we you know we spent enough time on the the insurance thing but you know let’s all pay attention to it because it’s going to be a big story going forward but Europe is um is imploding and it’s it’s all self-inflicted so it’s I I did a post the other day about um the UK’s strange Financial collapse or something like that because it’s it’s not obvious why it had to happen you know the the UK um they were very frustrated by the eu’s the European Union’s um immigration rules they felt like they were being

inundated with uh with people that they couldn’t assimilate so that that’s the impetus impetus for brexit um the UK voted to pull out of the European Union so they could get control over their borders but what happened since brexit was put into place um immigration spiked the UK let in even more people yeah and so so now they’re in political chaos right now they uh they’ve just been IM inundated with uh with people that aren’t assimilating quickly enough the uh the locals you know the native people in Britain uh

feel like their culture is just being swamped so their politics are um basically impossible right now you know they just selected a labor government um a few months ago I want to say let’s say a year ago I don’t know the exact date um but that that government’s unfavorable rating is already above 60% because with this level of immigration and the you know the usual kinds of um things that the UK is kind of known for now like massively Rising government spending and government debt you know so they’re headed for a

financial crisis even without the demographic issue and to top it all off they’ve gone full-on authoritarian uh where they’re um they’re arresting people for memes and tweets and putting them in prison and you they have several thousand people now in prison for tweets and meme postings and things like that uh so they’re they’re basically doing way with any conception of free speech at the same time they’re blowing up financially and demographically similar stuff happening in France and Germany right now Germany

basically destroyed its energy system uh and and in so doing destroyed its industrial base so it’s D industrializing um and France cannot keep a government in place because they can’t control their deficits they uh they basically you know got rid of one prime minister because the budget that the guy had submitted was completely untenable it was like twice the uh the deficit level that is allowed by the EU uh which was going to bring back bring some kind of a a um blowback from the European Union uh and then they they

installed a new prime minister who promptly submitted the same budget so so France you know they’re they’re running five or so per of GDP budget deficits right now which is kind of a death spiral level of deficits in Good Times you know this isn’t recession this isn’t a recession this isn’t a war this is normal times from a financial and political standpoint for Europe uh but they are just blowing up financially they’re basically past the point where um anything is sustain aable anymore so they’ve uh they’ve entered the kind of

Doom Loop stage of the fiat currency death spiral process where um they’re they’re borrowing more money than they can ever hope to pay off that’s pushing up their interest rates which pushes up their interest costs which raises their deficit even further and so on and there’s no way out of it apparently because um well in France France has another interesting um thing going on where they’ve got three major political blocks none of them are capable of generating a minor or a majority in future elections but also none of them

are willing to work with anybody from the other blocks so you basically have gridlock where France appears to be unable to put a functioning government in place while it’s running um deadly deficit levels so um you know Europe is on the verge of basically spinning out of control where they have to dissolve the EU and and then everybody go back to their own currencies it’s uh it’s something that um well some people predicted it from day one with the EU and the Euro zone for a variety of reasons but still the EU right now is a

huge economic entity it’s bigger than the US in terms of GDP and for it to fragment is a global earthquake um you know the the UK can have a depression and it doesn’t really um it doesn’t really existentially threaten the rest of the world but the EU spinning out of control you know that’s that’s a potential Catalyst could become a contagion sure yeah well I I mean it already is kind of a contas within the EU because you’ve got the major countries um France and Germany right now which the EU depends on and the Euro

certainly does depend on um they are the problem countries right now um Germany German de-industrialization is one of the most amazing stories of of modern Finance because a decade ago Germany was arguably the best run country in the world you know they had this massive industrial base and they had labor peace um and uh and they had cheap energy coming from uh Russia that in the form of natural gas via pipelines that they turned into Industrial Products and sold to the rest of the world and they had a

budget surplus and a trade Sur plus you know they were just a super successful country now all of those stats I just named they they’ve um gone into reverse and they are now problem stats for Germany Germany you know is going to run a massive deficit and a mass massive um budget deficit massive trade deficit uh their big companies are all moving away you know the US is attracting German car makers now and Chip makers because we have cheap energy and Germany does not and and their politics is chaotic because of this you know

Angela Merkel left and and now um the the successor government has fallen and they they don’t even they have no idea who they’re going to put in place because oh oh wait I forgot about this this is an interesting part of the German story too the U quote unquote far right party is gaining a lot of ground electorally as you might expect in a country that’s in that kind of chaos and so what country again this is Germany Germany afd yeah yeah afd and so Germany now is talking about uh if the in the

next election afd does really well they’re just going to abgate the results they’re just going to U um kick afd out of the electoral process just because they don’t want them to have any chance of winning so is that what they did in Romania or they actually canceled elections in Romania they they just did that yeah because the the again quote unquote because you know ger or um European farri part parties aren’t what American would necessarily call far right you know they still have a lot of um Centrist ideas but yeah in Romania

the the farri guide did very well and the U theom Ur um Romanians just canceled the election they’re going to have a new election you know and presumably with some kind of restrictions on what the far right is allowed to do and say and whether they’re even allowed to participate so Europe is blowing up financially blowing up demographically and they’re going full on authoritarian uh to the point where they just if an election isn’t um favorable for the powers that be they just cancel the election and start over and uh and

it’s all happening at once it’s not like there’s you know one issue they’ve got multiple existentially threatening issues at the same time um and the Euro only existed because um you know Italy and Greece when they issued bonds which they knew to because they’re running big deficits um the Assumption was that Germany stood behind the European Central Bank so when the European Central Bank bought Italian bonds and Greek bonds and Spanish bonds and Portuguese bonds um that they were actually German

bonds uh because they were backed by the ECB who in turn was backed by Germany so that allowed these weaker European countries to continue to rent deficits so take that away you know once Germany is not perceived to be this massive Financial power that sits behind the ECB and protects everything the ECB does um then why would you buy an Italian Bond you know because it might not be a German Bond after all and that’s the um probably the end game for the Euro common currency when uh when the countries that exist within the Euro

Zone can no longer F uh Finance their budget deficits by selling bonds and you know we’re headed in that direction at an accelerating Pace it looks like and there doesn’t seem to be any kind of a solution because there’s no way for Germany to get back to cheap energy you know once once the US blew up the nordstream 2 pipeline um arguably that was the end of the German industrial Powerhouse you know and they they can’t go back to that unless we all start getting along again and Russia um stops being Enemy Number One of the West

and and I don’t think that’s well who knows we things are changing in the US so we don’t know how our politics are going to play out but in the short run Germany is deindustrializing which means they’re going to make way less money they’re going to be uh way less able to protect the finances of the other countries in the Euro Zone and that’s that’s the end of the Euro at some point hey guys quick pause as you know we are big proponents of physical gold and silver on this channel however the conundrum often arises where do you put

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information also click the link down below all right guys let’s get back to the video so let’s look Beyond first order effects let’s look into second order effects again in this case uh what happens to the interplay between Europe and Russia now and Ukraine how do you see a collapse a collapsing EU and UK uh play with Russia’s uh War there with with Ukraine yeah let me um antagonize some of your Audience by just bluntly um talking about what the Ukraine war is that’s a proxy war in which the US and

the rest of NATO tried to destabilize Russia by pushing them into a war that the US hoped would drain Russia’s resources and cause their government to collapse um so you know it’s possible that Trump’s attitude about the whole thing is different enough that he goes in cuts a deal um ends the Ukraine war which you could do with a phone call just by uh promising that Ukraine will not be inducted into NATO anytime soon just neutralize it so Russia doesn’t have a a hostile military um organization right on its

borders um and then basically that you know with with some horse trading about land and stuff like that that that puts the Ukraine war to bed and then after that it’s possible that um these because the these pipelines running for Russia to Europe were incredibly profitable for everybody involved you know it allowed Germany to be an industrial Powerhouse and it obviously generated a lot of cash flow for Russia so there are financial reasons to go back to that time uh and that the neocons in the US government

hate that idea because the last thing they want is for Russia and Germany to be friends because that’s a that’s a geopolitical nightmare from their point of view because Russia and Germany together are pretty power entity and um in living memory um they they Tred to take over the world so yeah German German Ingenuity coupled with the resources in Russia I mean that seems like a like a deadly combination there yeah um it it could potentially be a um counterveiling geopolitical Force to the US to the US

in the world and uh there are people in the US government who hate that idea so much that they would be willing to fight fight a nuclear war to prevent it from happening and that’s what really scares me that uh that these guys they want to destroy Russia they want to uh destabilize China so badly that fighting a war to achieve that is okay but you know we’re doing that with nuclear Powers the uh the unintended consequences of something like that would be immense or would they it would be existential you know I mean we could

end human civilization if we scw something like that up so uh I think a world in which Russian gas flows to Germany both of those economies are reasonably healthy uh is is a better starting point for creating a world where you know we have a balance of power which is basically the only way we can go forward anyhow the US with 5% of the world’s population is not going to rule the other 95% uh in perpetuity you know we we’re not going to have Thousand-Year Empire um that we run so the only alternative

to that is some kind of a multi-polar system where um there are other powerful countries in the world and um we we all work together to maintain a balance so that it’s in no one’s interest to take these brand new weapons that we’re building that we have we have no idea how they’re going to combine on the balance on the battlefield and start using them because um I mean that’s the another part of the story is that we’re creating astounding weapons right now you know we’ve got those robot dogs with

50 caliber machine guns on their backs and and swarms of drones that can in theory take out battleships and and uh and wipe out um whole Air Forces on the ground and it it goes on and on you know and then God knows what else they have under black budget yeah exactly what don’t we know about if we know about this stuff you know EMP attacks and uh AI driven nuclear drones and things like that what what else is there and so the last thing that anybody should want is for us to um you know to say hey let’s

let’s see how these weapons work let’s try them on the battlefield now and uh and see if they do what they’re supposed to do uh because then somebody else is going to come back with their secret weapons that we didn’t know existed and then you know we’re at a very dangerous place um you’re Danny you’re probably familiar with that whole the concept of filters for um civilizations and why why there are UFOs just flying all around us and other civilizations talking to us and everything because as you get smarter as

a civilization you have to make it through these fils and one of the filters is uh you develop weapons capable of destroying your civilization very easily and so in most cases in this Theory these civilizations destroy themselves by using these weapons so we’re right there now we’re we’re at the uh the decision point for self-destruction destruction when we’ve got nuclear weapons we’ve got cyber weapons we’ve got artificial intelligence you name it we’ve got it bioweapons um and um the odds of us

getting through the next 50 years without using these things in a a big very scary way are um you know if they’re 5050 that’s probably the optimistic scenario so so Financial chaos leading to GE political chaos leading to all these weapons being used is kind of the worst case scenario because we really just don’t know what happens when AI piloted drone swarms meet EMP weapons and etc etc and hopefully we’ll never find out yeah yeah just just a quick aside about your comment there about the uh different

forms of civilizational filter uh which you’ll notice a lot about these UAP or UFO sightings that they always occur over not always but like uh they they there have been occurrences of of them over nuclear uh military bases and I’ve always thought that was interesting um I don’t know if they’re aliens or anything like that but they always appear during times of uh strong tension that there’s a a lot of sightings back during the Cold War days over these nuclear sites and it kind of begs one to wonder

whoever the whatever these things are not saying they’re aliens but um you know are they there to to stop us from uh you know taking any doing anything we might regret put it lightly well that I mean that would be a logical policy for advanced civilizations in the Galaxy right they see new civilizations emerging and their policy would be non-intervention while they find out if we’re going to get through the filer or not you know and then The Logical Next Step would be that once it’s clear we’re

not going to make it through the filter and we’re going to destroy themselves that then they step in and say all right you know there actually is a Galactic Civilization and you can be part of it but you got to stop this stupid stuff that you’re doing now and uh I mean that makes logical sense as a a policy for advanced civilizations Visa um developing civilizations so and and that would explain why nuclear testing and stuff like that gets a lot of attention right from these theoretical UFOs because um that’s

that’s the thing that can wipe us out right this minute so they clearly paying attention to stuff like that and then deciding what to do next yeah well let’s take it back down to earth uh here John um we have been we we do have u a new president coming in and and just days away now uh Trump’s second term is about to be underway what do you expect from him given his cabinet choices given you know some of the what he said from winning the election up until now what are your expectations for Trump in 2025

well I think uh well I have a few thoughts one is don’t ever fall in love with a public figure because they’ll break your heart you know the you can promise lots of things going into an election um and very seldom will you get more than just a couple of the things you promis so we we should temper our expectations for what Trump can um achieve and hopefully he picks the right handful of things to really focus on like Stop Those Wars you know if he just um four years from now gets us to a place where there’s no major war going

on in the world from my point of view he’s Winston Church Hill you know he he saved us and doesn’t matter what else he did but um he he’s he’s bringing a lot of really interesting people into the government and if they get approved by the Senate like RFK Junior for instance at the FDA that that is really you know an astounding thing to see uh because there’s a lot of good to be done in the public health system which is right now a complete catastrophe you know he he talks about firing the top 400 um scientists at FDA good do that

you know and then don’t stop because we’re the most we’re the least healthy country rich country in the world right now and it’s our own fault or it’s the fault of the people who are in charge of the health system um you know big food feeds us poison which causes us to have uh chronic diseases and then big Pharma steps in with the expensive Pharmaceuticals that just manage the symptoms and then at at the end you get cancer and and um then they just hit you with chemo and until you die doesn’t actually cure anything and at each step

of the process they’re making billions of dollars while people are getting sicker and sicker so um if Kennedy does what he promises phenomenal that would be awesome again you know got to temper the expectations but it seems like he’s it seems like he’s kind of backtracking away from Pharma and into big food now that seems to be the segue um he seems to be spending a lot of his time now on seed oils and Cheerios and things of that nature we haven’t really heard much from him by way of big Pharma at least not in the

last several months well yeah when you think about all the things he said he would like to do the magnitude of that that whole big project um you you got to expect him to start biting off bite-sized pieces right because you can’t do all this stuff at once and food is a logical place to start because you can you can very easily show people what’s in children’s cereal and stuff like that and they they immediately want you to take that stuff out so um that’s kind of loow hanging fruit making cereal um the same formulation here as

in Canada and Europe you know just get the U the the Petro chemicals and carcinogens out of basic prepared food it’s a place to start but um you know if he does that in six months then you know then it’s time to move on to the next thing and there are an awful lot of lawsuits that have to be brought too um in in the pharmaceutical industry and and uh where there are conflicts of interest between the people financing studies and the people actually doing the studies and the people who benefit from the St studies so there’s a huge

amount to be done if some of it gets done the way politics works in the world that’s that’s a success that’s a win so here’s hoping that uh that the guys that um Trump is putting in place with his backing are able to get some of the stuff done that um that they’re trying to get you know the the whole cutting $3 trillion do or two trillion dollars out of government spending that that’s where stuff gets dicey because you can’t really mathema Ally do that and uh and so that’s that’s not going to happen but

still it’s possible to rationalize and make more efficient government operations and if they if they just get that that’s kind of a win too so if we don’t go in expecting every single thing that Trump promised at every single speech during the whole election to happen but are happy to take some wins where we find them then it’s conceivable that he has a successful administr ation now wait having said that though we’re headed for a big financial crisis and Trump is liable to get blamed for that because it wouldn’t be a surprised to

see a recession hit this year with equities at uh at crash levels and houses as we talked about as expensive as they’ve ever been and consumers running out of money and now starting to put their day-to-day life on credit cards that all the conditions for um equities bare market and a nasty recession are in place right now and something like that can derail a government because they have to focus on the uh the you know feeding people kind of part part of the process toh keep the recession from metastasizing into a

depression and maybe that um derails a lot of the projects so we we don’t know I mean I think this is the most fascinating um new Administration coming in ever and I think it could be a turning point in a lot of ways in terms of um like the authoritarianism that we were basically adopting just like Europe’s that might end that would be great um and lots of other things like that so and I’d love to see the JFK files be released right and the Jeffrey Epstein files things like that might happen so I I think that

um Danny when you and I talk in the coming year there’s always going to be some wild thing like that to talk about because I I think it would be a shock if none of that stuff happened so it’s it’s just a question of which of these outrageous things that might happen actually end up do happening yeah I mean it’s always a uh an exercise just trying to cram in every single current event in each interview and just trying to get your comments to right now but you mentioned the markets let’s get your

thoughts on the markets the current price actions in the market really quick we have been seeing skyrocketing Energy prices by way of oil natural gas uh what do you make of that what do you make of the current uh precious metals price say uh I’m reading here uh we’re looking at pslv short volume hitting a record amount an all-time record here for pslv uh I had an interview with uh um I had an interview the uh a couple of weeks back where we also looked at uh record short volume on SLV so I know that’s

many questions rolled up into one I’ll let you take it in whichever order you’d like to take it uh what do you think well um let’s see the the pslv thing and the SLV thing that’s a reasonable short silver is an industrial metal that’s very volatile so if we have an equities bare Market which okay let let me go a little bit further back for the equities bare Market the the FED tried to ease just uh it was in last September uh because interest rates had gotten to the point where they were debilitating you

know everybody’s interest costs was spiking and it was that was going to cause a recession it was higher for longer until something breaks and we’ gotten to that point so the FED started to to try to ease um interest rates responded and went down for a little while and now they’re going back up even though the FED is in easing mode which normally pushes interest rates down across the board um intermediate and long-term us interest rates are spiking the um the 10-year treasury yield has gone from about 3.6% to

4.7 is% right now uh so we’re back into higher for longer till something breaks territory so that’s brutal for equities that are priced for Perfection right now so if you got Rising interest rates you can’t have stocks continue to go up in tandem with interest rates for very long because um dividend yields on stocks just start looking so poultry compared to what you can get in a bank CD or something like that right now you can get four and a half percent maybe 5% in some bank ceds or in a money market fund

or a treasury fund um and the uh the yield on the S&P 500 is like 1.2% right now so when that disparity gets that wide historically Capital starts flowing into Super safe fixed income because why not you know you’re making pretty decent money um with no risk effectively uh whereas equities because they’re at priced very richly right now carry a lot of risk everybody in the market knows that so money starts flowing out of equities and into fixed income and that breaks the equity Market you know you

have all kinds of stocks especially in the tech space that are so richly valued that they could fall by half and still be kind of expensive by most um historical rational stock valuation models uh and that’s the kind of thing that has happened in the past over and over again so there’s no reason to think it doesn’t happen now so my the sequence of things in in my most like scenario would be interest rates go up a little more that cracks the stock market you get a a nasty bare Market very quick very brutal that causes a recession and

then the question is does the recession metastasize into something worse than uh 20072 2008 which it could very well because we took on so much debt to get ourselves out of the Great Recession in the 2000s that were really financially fragile so completely possible that things kind of start spinning out of control financially the world’s governments have to step in and bail everybody out um and then you get something like 2022 where we printed a huge amount of money and that caused almost double digit

inflation official inflation and maybe you know 15% real inflation by some measures um so we might be back there except with way more debt and and a populace that um that knows inflation can happen you know that was a surprise in 2022 but now it’s recent memory so it could be that people just start front running government easing when the bailouts start and that puts the pressure on the currencies and so we get that currency crisis finally with the Currency Reset and everything so I I you know wouldn’t

say that’s 100% probability but uh I think it’s completely possible that we’re looking at the um maybe imminent maybe in the intermediate term and of the fiat currency experiment and if that’s the case then you and I have tons to talk about um for the next couple of years yeah exactly well hey I have um we’re gonna segue over to uh substack member questions from my paying members here uh John really quick this is from Donna L and her question to you was what are the concrete things that need to happen I.E less regulation tax

breaks Etc to draw businesses that will hire middleclass workers that will help strengthen the economy again well the the whole reshoring thing where new businesses are coming from overseas and setting up factories in the US that’s already happening right now the whole um globalization thing turned out to be a dead end for a lot of reasons which we probably don’t have time to go into now but um what’s happening is a lot of countries businesses a lot of businesses around the world are conclus concluding

that they need to do business in the US they need to make things here um if they want to avoid you know Trump’s tariffs or currency fluctuations things like that um so they’re doing it so we’re already getting a lot of new factories coming in there’s massive um Construction in the factory space going on right now and that’s already a real thing now Trump coming in with tariffs it Turbo charges the process because he doesn’t actually want to impose tariffs on everybody out there it’s not a you know Revenue raising um project for him

it’s a behavior change strategy where he wants other countries to um avoid his tariffs by moving their factories here which is basically the uh that was the starting point for his campaign back in 2016 is that listen you know they they’re screwing you over by moving your jobs to um China well we’ll get those jobs back for you well he’s doing that now with the Tariff thing so that’s already happening um and I I think it gains steam in the next decade we’re going to become you know the US is already you know reasonable in the

manufacturing space but we’re going to become an even even bigger manufacturing power going forward and that’s very good for the generation of people who got screwed over by globalization you know the uh the high school educated guy who works with his hands who used to be able to make M middle class money in a u auto assembly plant um he’s going to come back in style you know the uh the jobs that will be available will um will go to people like that and they’ll be back to making middle class money again which is just

great you know you need um that group of people to have a stake in the system you know they need to be able to uh to make decent money enough to support a family and to um allow their kids to get up on the next rung of the economic ladder you know we kind of cut those rungs out for a generation and now they’re coming back I think which is phenomenally good yeah so next question kind of piggy piggybacks off of your comment there uh it says I’m no Economist but it seems to be prevailing thought that paying

workers more increases inflation I just don’t get that and it seems to serve the interest of a minority at the expense of the many again yeah U this is the tricky part of this process and and uh the the fed the Central Bank of the US along with most of the other central banks of the world they look at Rising stock prices or Rising housing prices and they don’t see inflation they see assets increasing in value which is making us all richer but if a a factory worker gets a 20% raise the FED looks at

that and says oh wage inflation and and they use that as an excuse for raising interest rates and trying to Tamp down um economic growth or at least wage growth for people that are unlike the guys running the FED um so yeah it’s going to be an issue going forward because Rising wages is inflationary as we currently Define inflation but I would say that um you know lump everything together if you’re going to have an accurate version of inflation look at houses look at stocks and um if they go up count that

as inflationary too um but it is going to be an issue because we’re there won’t be much inflation probably for the next couple of years if we have that recession but when the government eases aggressively in order to Stave off depression and um more factories come to the US and start hiring more American workers and unionized workers realize they can uh um they they can collectively bargain for massive raises then it’s going to be an issue you know it’s going to be inflationary um and you know we have to

figure out from an investor standpoint what that means is that jump into gold and silver with both feet when that happens maybe you know short the dollar maybe we we’ll see you know it’s it’s going to be an intellectual challenge to figure out how you position yourself when um when you have wag inflation because it’s been since the 1970s that we had anything like that and um on the one hand it’s a very good thing on the other hand it’s a very bad thing and we just have to figure out how how we how we navigate those Waters when the

time comes but they’re definitely coming you know barring that big nuclear war or whatever uh the us is going to be a manufacturing Powerhouse with strong labor unions who are able to get big wages and we’ll just have to see what flows from that yeah well I think that’s it from my end here John anything else you want to talk about before we wrap up no I think my throat is given out here Danny so it’s a good time toh to stop and go on to other things awesome well hey where can people find you John I’m

at Rabino dos substack docomo from the stuff that you and I just talked about today and so far so good awesome we’ll have the links to that down below also subscribe to our subse if you’d like to ask our guest questions like we uh we just did here with John and remember to like And subscribe so you don’t miss an episode comment down below go John go if you agreed with John’s analysis if you disagreed with anything however uh do drop me a comment I do read the comments guys so let me know your thoughts down

below and so with all that said John I’d like to thank you for coming on guys I’d like to thank you for watching and giving me your time and with all that said I’ll catch you next episode bye y’all