Money Talks: Turd Ferguson

OT:Is it time up for the Bretton Woods institutions, or are they just finding their teeth?

TF: The powers-that-be will fight like hell to retain their power and, if allowed to, they will retain their power in the new system that will replace the current one.

 

OT: Can we ever build a self-aware financial & political system that guards against this?

TF: I’d like to think so, but power is now so entrenched that only a complete, global fiasco and calamity could possibly cause a reset. Frankly, I’m not sure I’d like to live through that.

 

OT: What happens if the holders of the vast global debt suddenly find the debt becomes valueless?

TF: Debt may vanish but power will not. Global financial power must be retained. Look at US bankruptcy law. It was changed in 2007 in order to make derivative holders superior (and first in line at a bankruptcy) to even bondholders. Who owns the derivatives…?

 

OT: When you look at the global economy in 2012, what do you see?

TF: A mess. All of the major, ‘developed’ nations are heavily indebted and all of the major ‘developing’ nations are creditors. When the developed nations finally collapse under the weight of their debt, they will take the developing nations down with them.

 

OT: Will we ever be allowed to get out of debt?

TF: No. The only possible solution is to devalue your currency in an attempt to manage it and/or pay it off.

 

OT: You’re a precious metals expert. How long before gold starts heading downwards?

TF: If you mean in relation to the current fiat currencies, the answer is: it won’t. There will be corrections in the fiat price from time to time but, with fiat devaluation the only possible course of action for debt management, gold will continue higher.

 

OT: What got you into precious metals?

TF: The realization in 2008 that there is no possible way that the current fiat system will survive.

 

OT: Why is this “fiat system” doomed?

TF: Politicians use central banks to create infinite amounts of unbacked paper currency. Eventually, the debt and the money supply needed to fund it become so great that hyperinflation ensues. This leads to war, insurrection, chaos and mass suffering.

 

OT: So, happy times ahead…

TF: The coming hyperinflation will hurt middle-income homeowners a lot. But the catastrophe won’t start there. It will be the lower income folks – the people who can barely afford to feed their children now – who will be hurt most and will likely rise up first. When you are broke and hungry and your children are starving, you don’t have much left to lose. The attendant crime and social unrest will be what ultimately awakens them.

 

OT: Do you think this “Occupy” movement is a sign of a deeper malaise? – is it the start of something bigger?

TF: Yes. I believe it is the beginning of a much larger movement of disaffected and disenfranchised people who are awakening to the wealth destruction that has been brought upon by the central banks and bankers. Protesters must understand, though, that central planning and socialism is not the answer. The answers lie in freedom and truth, self-reliance and responsibility.

 

OT: We are being sold on the idea, right now, that central bankers & technocrats are our salvation. Will larger western economies follow the lead of Italy and start bypassing democracy in favour of the technocrats?

TF: The leaders of western economies will likely be coerced into exchanging sovereignty and freedom for the supposed gains of “debt management”. The central banks are desperately trying to preserve the euro because all of the European banks are buried in each other’s debt. Of course they are going to try to convince you that they are your “salvation”. Maintenance of the status quo preserves their power and helps them avoid the guillotine.

 

OT: On your blog, you talk of ‘The Cartel’ – who are they, and what do they do?

TF: The Cartel is a collection of major bullion banks through which the central banks of the world influence and suppress the prices of precious metals. JPM and HSBC are the two, primary cartel members.

 

OT: Is there such a thing as a free market?

TF: Somewhere, I suppose, but not in the U.S. I’m confident that the Fed now actively intervenes in the currency, bond, equity and commodity markets as they attempt to “manage” perceptions and growth.

 

OT: So you’re not a fan of the Fed. What bugs you most about it?

TF: The endless creation of money since 1913 and particularly since 1971, has devalued the dollar by almost 97%. Creating fiat money is, essentially, a tax whereby money, savings and worth are transferred from middle income, average people to the wealthy, scheming political and financial class. Think about it. Do you enjoy the life your parents had? Why does it take two income earners to support a family today where 40 years ago it only took one? Taxes have skyrocketed in an attempt to fund the government and wages haven’t even come close to keeping pace with the inflation brought about by endless fiat money creation. The Fed and all central banks, at the behest of politicians trying to secure power and buy votes, have done this to us.

 

OT: What lies the other side of “the coming economic chaos”?

TF: I wish I knew. A positive resolution would be some kind of continuation of the current global order where regional reserve currencies rule the day and global commerce re-starts and growth and prosperity is shared amongst the producers through a global, asset-backed unit of exchange. On the negative side, complete global chaos, societal breakdown and war.

 

OT: Which particular financial injustice most infuriates you?

TF: The global economic oligarchy of statists and crony capitalists that poison the system and stifle growth and free trade through their greed and power.

 

OT: What one economic reality do you wish more people were aware of?

TF: That the supposed prosperity brought about by the unlimited creation of fiat currency is nothing but a myth, a mirage. Every dollar or euro or pound created from the thin air dilutes the current supply of dollars, euro and pounds, thereby making them less valuable.

 

OT: You’re given a magic wand to pass a single law. What law do you pass?

TF: In the U.S., I would mandate term limits on all federal office holders. A single six-year term for the president. A single six-year term for Senators, and three two-year terms for Representatives.

 

OT: Recommend a book and a blog for our readers…

TF: I just read a book called “How Do You Murder 11,000,000 People?” by Andy Andrews. Please read this book. It will only take you 20 minutes but it is extremely important. And everyone must read ZeroHedge every day (zerohedge.com).

 

OT: Name and shame someone in the world of finance.

TF: To single out one person is almost impossible as there are literally thousands of villains. I’ll say the U.S. president Woodrow Wilson. He signed the Federal Reserve Act in 1913 started this whole process.

 

OT: And who is your economic hero?

TF: I am a big fan of the “Austrians” but I’ll go with Kondratiev, I suppose, simply because he died in a Soviet prison.

 

OT: What does 2012 hold? Should we be storing tins of tuna…?

TF: 2012 is going to be a very volatile and dangerous year. As a precaution, yes, you should have some extra food, water, cash, precious metals and medicine on hand at all times. The danger doesn’t have to come from financial collapse, either. Right now, our countries are actively preparing for war with Iran… a war that looks inevitable. Remember, war always raises “unintended consequences”. It’s possible Iran could then activate terrorist cells all over the world.

 

OT: What’s your ambition for the coming year?

TF: To see January 1, 2013.