Jeff Berwick on Dollar Vigilantes, Inflation Protection and the Profitable Allure of Permanent Tourism
The Daily Bell is pleased to present this exlusive interview with Jeff Berwick.
Introduction: Mr. Berwick is an anarchist, libertarian and freedom fighter against mankind's two biggest enemies, the state and the central banks. Jeff is chief editor of The Dollar Vigilante, an anarcho-capitalist, Austrian economics based newsletter focused on surviving The End Of The Monetary System As We Know It (TEOTMSAWKI) and CEO of TDV Media and Services, which provides internationalization information and solutions for yourself and your wealth. He is also host of Anarchast, an anarchist video podcast, and is a contributing editor at many of the world's largest financial and precious metals related websites. In 1994, Jeff Berwick founded Canada's largest financial website, Stockhouse.com.
Daily Bell: Great to interview you again, Jeff. When we talked with you this past October 2011, the world was a crazy place but it seems to be getting crazier. As an experienced observer of the financial scene, can you give us your take on the biggest problem the Western world is currently facing? Is it economics? Militarism? Growing authoritarianism? Or all three?
Jeff Berwick: Where to begin? When I first began discussing The Dollar Vigilante in 2008 I remember thinking to myself, "How will I find enough stuff to write about?" Now, in 2012, I can't possibly even comment on all the events happening daily. As one example of the escalation of what I see as the ongoing symptoms of The End Of The Monetary System As We Know It (TEOTMSAWKI), since we last spoke less than a year ago Barack Obomber has declared the Bill of Rights null and void. With his signing of the National Defense Authorization Act on New Year's Eve, he's also declared that he can kill any American, or anyone in the world, just by adding them to his kill list.
Daily Bell: Death by drone ...
Jeff Berwick: The US Government has announced plans to launch 30,000 drones to darken the skies over the US in addition to its foreign drones. You're not supposed to mention that, of course. In fact, the US Government tried to take control of the Internet recently via PIPA and SOPA. After being initially thwarted, Obomber declared by Executive Order last week that he is just going to take control of it. Simple, eh? The US government also has provided us with FATCA, which essentially makes it impossible for Americans to open stock accounts and bank accounts outside the US. And don't forget, Chuck Schumer wrote a bill called the Expatriation Prevention Act last month ... if people can't see where this is all headed, I'm not sure I can help them.
Daily Bell: Give them a hint. Keep going.
Jeff Berwick: It's obvious that the US Government is preparing for a collapse of the dollar. Various entities behind the scenes are setting up currency and population controls to manage the transition and to keep the system alive as long as possible ... while giving more dictatorial powers to the federal government by which they can control the people for the upcoming riots and chaos.
Daily Bell: It's not just the US that is in trouble, of course. We think the global economy is heading into the tank. Is China headed for a hard landing?
Jeff Berwick: The global economy has actually been in the tank since 2001. After decades of government debt unhinged by a currency tied to gold and decades of government involvement and intervention in the economy through the communist-fashioned central banks and authoritarian Western governments, the economy died in 2001.
Had the governments and central banks allowed it to collapse, there would have been a few tough years as resources were reallocated to productive use. But the Keynesians are in control now. Paul Krugman called for a housing bubble to replace the tech bubble, and got it. This further destroyed trillions in wealth as businesses and entrepreneurs were fooled into thinking there was a great need for tens of millions of new housing units.
Daily Bell: Yes, we just wrote an article about speculation that there may be up to 40 million unnecessary single-family houses – new ones. That's an astonishing number.
Jeff Berwick: Yes... someone should tell the environmentalists that if they really care about the environment and wastage of resources they should hate central banks and the state... not want more of it. But I digress. When the housing bubble collapsed in 2007, the financial system died. Even statist mouthpiece, George Soros, recently acknowledged that the financial system died in 2008. Krugman and the central banks only know how to do one thing – call for more counterfeiting of money. This most recently had the effect of allowing the mainstream media to write that the economy was showing "green shoots" or was in "recovery." It's not ... not any more than Whitney Houston is showing signs of a comeback performance!
So, to finally answer your question, I see a lot of what is going on in China as only a symptom of the monetary inflation that the world has been engulfed in from the central banks, including the Bank of China. Furthermore, China's GDP numbers, like all countries, are a fallacy and pointless to even consider. GDP is a useless, Keynesian number and when it is calculated and reported by a government you can consider it to be as based in reality as the tooth fairy... or, as they have here in Mexico, the tooth mouse.
Daily Bell: You travel regularly. What strikes you most about the world today?
Jeff Berwick: My travels have been mostly sequestered to the Americas for the last few years and I have spent a fair amount of time in the freest country in North America ... Mexico. The thing that I've really noticed is the militarization of the police in Canada and the US. Almost every time I go to the US now either my friends or I end up in handcuffs.
Daily Bell: Didn't that happen just recently? You wrote about it ...
Jeff Berwick: I was kidnapped by police in Phoenix last year and this year in Palm Desert. And on a recent trip to Las Vegas two of my friends were kidnapped and thrown into a cage for 24 hours for the crime of spilling their drinks. I have been commenting recently that I will never fly with my family to the US as long as the TSA exists – and it will exist as long as the US Government exists. These government programs, once put in place, are impossible to remove. And I also have been stating that I am giving serious thought to never returning to Canada or the US until such time as there is total government collapse.
It is just far too dangerous to go there, especially for a person such as myself who does not kowtow to police and supplicate to border guards. I believe that the US Government is trying to arrest as many people as possible because giving them a criminal record makes it nearly impossible for them to travel or to gain a second passport, so they are truly and wholly enslaved once they have a record ... and in the US today, everything is illegal, so it is pretty easy.
Tacitus said, nearly 2,000 years ago, "The more numerous the laws, the more corrupt the government," and that has never been more the case than in the US today. Thirty percent of Americans by the age of 23 have been arrested at least once. The US Government is not that much different than the National Socialist (Nazi) Party in Germany except the US Government has scientifically perfected propaganda and statist tactics to the point that people don't even realize there already are prison camps in the US. The US has more people in prisons, mostly for non-crimes (no victim, no crime) than Stalin had in his Gulags! Yet there are plenty of people – US citizens – who still refer to the US as the "land of the free."
Daily Bell: Okay. Update us on the currency of the Land of the Free – the American dollar. Is this a currency you want to own? How about gold and silver? Is the run over or will we see higher prices?
Jeff Berwick: You should know what a dollar vigilante like myself will say about the dollar. The name dollar "vigilante" came about because the old bond vigilantes of the '70s who kept governments and central banks in check have all been made powerless now that central banks can print up as much money as they want to buy their own bonds.
Therefore, the only way to protest, and protect ourselves from government deficits and money printing, is to sell the dollars themselves. Euros, yen and pesos, too. If it's a fiat government piece of paper with pictures of dead criminals painted on it, we're sellers. We don't just do it out of principle but it's also been and will continue to be profitable, as anyone who has held gold or silver for the last decade knows. That said, I don't even follow the daily price of precious metals in terms of dollars. It is meaningless. We believe this monetary system will collapse and therefore gold and silver will eventually go over $1 trillion per ounce... but a billion dollars won't buy you a Big Mac! I am more apt to track the value of gold and silver in bitcoin, a currency that is impossible to inflate and that will still exist a few years from now, than I am in dollars.
Daily Bell: Very good ... clearly stated. Is the euro a failed currency, too, or just, perhaps, a shrinking one?
Jeff Berwick: All fiat currencies in today's world of socialist democracies are constantly shrinking. Almost any sound economist (a.k.a. the Austrian school) could have predicted it could not and would not work. If you are going to have a socialist democracy then it is imperative that you print money to cover the never-ending deficits and debts, at least for a period of time. The euro wasn't even elastic enough for this illegitimate task. The fact that the euro was so hamstrung from the start either shows incredible stupidity or a calculated plan to create a currency union that would quickly collapse necessitating a closer political union ... or a "one world Europe" government. This seems to be where things are headed.
Daily Bell: How about Canada? What's your perception of the Canadian scene?
Jeff Berwick: Watching the evolution of the humans who live in the geographic region known as Canada over the last few decades is astonishing. I grew up in the Great White North so I have had front row seats for this transition. In the 1970s and 1980s Canadians felt they were a fairly poor backwater. People took comfort in drinking beer to make it through the long dark winter while they watched hockey and got by on the few dollars they had left after all the taxes.
In the '80s and '90s, the Canadian dollar was worth about half of the US dollar and there was constant mocking of the "loonie" and even outright conversations that it could just go to zero at any point. People clung to US dollars when they got them. But then, something changed. The latest commodity cycle, fueled by worldwide central bank money-printing, has now convinced 30 million Canadians that they are "a cut above."
The oil sands, which I grew up right next to and used to be called the "tar sands" and were thought of as a useless geological anomaly, are now a massive industry. And, thanks to Helicopter Ben Bernanke and his relentless devaluing of the US dollar, the Canadian dollar is now worth the same as a US dollar. Canadians are now richer on average than Americans. Like a drunk on a binge – who temporarily thinks highly of himself – this has changed the average Canadian's self-perception.
Daily Bell: Interesting analogy. We never quite thought of it that way.
Jeff Berwick: Trying to visit Canada these days is often harder than going into the US. Canadian border guards snarl and ask you if you are worthy enough to enter their great country. Try going to a hockey game and not yelling out the anthem at the top of your lungs with the rest of the slaves, and they'll immediately notice your aberration and you'll be lucky not to get beaten. And you can't go for more than a few minutes without someone pointing out that Canadians are better than most countries because they have "free medical care."
Canadians, who used to be quite peaceable, now see it as their duty to invade foreign lands like Afghanistan and Libya, and are planning foreign military bases, to spread their own loving brand of socialism and democracy through guns and bombs. Canadians will tell you that their financial system is much better than the US and that is why they avoided the problems the US had in 2008. But, Canada has followed the exact same authoritarian road to bankruptcy and is just a few years behind. A massive housing bubble has been percolating in Canada, specifically in Vancouver and Toronto, and it will collapse just the way the housing bubble in the US did. The Government-run Canadian Mortgage and Housing Corporation is leveraged just the way Fannie Mae and Freddie Mac were in 2006.
In short, Canada is now almost exactly like the US – just a few years behind in terms of its housing bubble – but otherwise the economic environment is almost exactly the same. I call it Ca-merica now. But don't tell that to a Canadian. They are very polite but if you ever infer that Canada is not the best country on Earth you'll find yourself spitting out teeth unless you're quick with your fists.
Daily Bell: Getting back to the US, any comments on Ron Paul and the end of his campaign?
Jeff Berwick: I am a big fan of Ron Paul as a great communicator of libertarian ideals. What was most amazing to me about his campaign was the outright propaganda and smear campaign by the entire media in the US against the sole man who had any principles. It just goes to show how corrupt the entire society in the US is now. Leo Tolstoy, who was an anarchist, said, "The State is a conspiracy designed not only to exploit, but above all to corrupt its citizens" and we can really see that in action in the US today.
Daily Bell: Nice quote.
Jeff Berwick: Unfortunately, a true one. The state forces you to use its methods and methodologies ... things like copyright or patents. If you don't do it, someone else will and then you will lose out. That is why the state is so dangerous ... once it exists, it becomes a kind of self-reinforcing disaster. The state is a grand tragedy of the commons. The good news is that this over-arching, obnoxious version will vanish, too – no matter how broad its seeming influence.
Daily Bell: Logically, it has to.
Jeff Berwick: The numbers are already baked in the cake. That's why the Daily Bell and the Dollar Vigilante and the thousands of others spreading the message of freedom have to spread it as far and wide as we can right now using the educative power of the Internet. That's also why I am not unhappy at all to see Ron Paul not win the GOP election – although there still is a slight chance he could – and that is because this ship is sinking. It'd be like nominating Ron Paul to be the Captain of the Titanic after the iceberg has been hit. He would have just been remembered as that quirky guy who liked free markets, who "caused' the collapse of the US.
Daily Bell: Speaking of getting the word out about freedom, what's your take generally on the health of the Internet these days? We believe it's proven remarkably resilient. People are very resistant to encroaching government control. A false perception?
Jeff Berwick: The Internet is an amazingly significant invention. It's educated tens – even hundreds – of millions of people not just in the West but also around the world. They may not be able to provide you with a specific solution, but they have the idea now that something is wrong – that it is not their fault and that there may be a better way. Jesus, in many ways, was an anarchist and fought the state 2,000 years ago. The Internet is kind of my Jesus. I have been on computers since I was a teenager in 1981, and even then it was easy to see that connectivity would change the world. When that finally happened in 1993, I kept looking around wondering when government types would realize what the hell was about to hit them.
Daily Bell: Actually, it took them quite a while.
Jeff Berwick: Thankfully, as with all things the bureaucracy does, it was very slow to figure it out. We've had about 20 years to educate people about freedom, about global elites and the banksters, even about false flags. Just look at what is currently going on with the Batman Shooter. Within moments of this event millions from around the world were combing through the evidence and exposing it as likely being something somewhat less than was being reported by the government controlled mainstream media. They just can't get away with false flag events like they could in the past. Most notable was last year when, a day after the Fast and Furious scandal was exposed, the US Government came up with some ridiculous story about Iranians funding Mexican narco-traficantes to murder the Saudi Arabian ambassador in the US. Within seconds of this story's release it was mocked as being obvious propaganda and exposed completely. This isn't the 1980s anymore. Even with war, which takes the ultimate in propaganda to commence, it's harder to start a war these days without people understanding the falsity of it. When people in the US and Iran can talk freely during a game on Xbox Live or in a chat room, they realize pretty quickly that things are not as they've been told and they realize they have more in common with each other than they thought... and realize that the true enemy is their own governments.
Daily Bell: Can they now put the genie back in the proverbial box?
Jeff Berwick: I don't think so. Too much depends on the Internet now. Almost all commerce... all transactions... all communications. Kids live on the Internet. Want to cause a real revolution? Turn off Facebook and Xbox Live and watch how quickly they get their fat little butts out of their chairs and head into the streets!
Daily Bell: Probably true! We think the old men from certain dynastic families – the ones that are used to running things – only realized what was going on in about 2005. By then it was too late.
Jeff Berwick: I've met a few of those power elite types. They are almost always older and have no clue about computers. I had to teach a Bilderberg attendee – and granted, the Bilderbergs are mostly the house servants – how to use a computer mouse years ago. That is why they have missed the boat. Now, however, with people like Peter Thiel attending Bilderberg I am assuming that they have seen the error of their ways. I've been told Peter just went to "attack from the inside." I hope so. If he is selling out and joining the Dark Side he will be our new enemy. He better have a good excuse for going. A damned good excuse.
Daily Bell: It's always good to talk to you because you're generally hopeful, as we are, that what we call the Internet Reformation is changing the way the world works in a positive way. Give us a sense of its impact on your life and growing businesses.
Jeff Berwick: I would just like to reinforce that the Internet is proof that anarchy works. For nearly 20 years there were no rules, regulations, taxes, oversight committees nor overt government involvement (except in places like China and Thailand) and Internet conversation and commerce worked amazingly well. The amount of innovation was and is astounding. All of the questions asked of anarchism, like how will disputes be regulated, were all shown on the internet. Thousands of disputes every day are mediated on places like Ebay and Paypal. Websites like "judge.me" are allowing people to resolve disputes outside of the statist court system.
Daily Bell: Wow, that's a profound insight. Even committed libertarian types and anarchists spend hours on a regular basis discussing how much of society can be organized without the dead hand of government. Yet here they've got the example of an online anarchistic society operating under their noses! What a great way to think of it!
Jeff Berwick: Ironic, huh? No one ever died from using the Internet that I know of and millions of businesses have flourished. Of course, there is "child porn" – but in my nearly 20 years on the Internet, I have not seen any child porn. Where is it? The government keeps trying to scare us into believing we need their protection from it and "cyber terrorism." I've yet to have a laptop blow up in my hands. The real terrorists are the governments themselves.
Daily Bell: The Dollar Vigilante's tagline is, "Survive and Prosper During and After the Dollar Collapse." What do people need to do now to secure themselves in the face of coming difficulties?
Jeff Berwick: The one thing that I would like to get across to people is that the world that we have lived in for the last 40 years has not been real. It's been built completely on debt and because of that much of what we have seen and done hasn't been "real." It's been a mirage.
Daily Bell: We write about that. Society is distorted by so much fiat paper that we don't even know what a real society would look like. We tend to think it would be more agrarian and slower moving, maybe like parts of Switzerland. These days, they're razing half of Detroit. We're supposed to think it normal that people would create complex neighborhoods and whole cities that the next generation would tear down?
Jeff Berwick: All that is about to change. The entire western monetary, financial and political system will implode this decade. It all began when Richard Nixon removed the gold backing, "temporarily," as he stated, from the dollar on August 15, 1971 and since then the entire world has been on a completely fiat, unbacked monetary system. That, combined with a massively growing socialist/fascist democratic nation-state system has meant massive amounts of debt – and great social instability laughingly known as progress.
Daily Bell: We've called it dreamtime, though we've traced it all the way back to 1913. That's when we think the damage really began and the false elite promotions began to become more prevalent. It's probably no coincidence that we had two massive wars following the implementation of central banking in the US.
Jeff Berwick: 1913 was definitely the start of it all... but it really went into warp speed after 1971. What you call dreamtime ebbs and flows. But over time the instability caused by pure fiat worsens. The system almost collapsed in 1980, the last time we had a crisis similar to this, and the only reason it didn't is because the initial economic distortions weren't as severe. The central bank still had one option: to allow interest rates to rise to their natural market level. That level ended up being 18 percent, as I recall.
Daily Bell: The distortions are much worse this time. You'd probably end up with credit tightening in the area of 30 or 40 percent. That's why we think the system is dead, like you do. When price inflation finally takes place and money velocity starts to lift, central bankers will finally realize what they're facing and panic. Bernanke will suddenly realize the guff he's been peddling about monetary sterilization is going to have been implemented. It's just hot air but he's going to have to go through the motions of acting like it's a "useful tool," as they call it.
Jeff Berwick: I agree; they're not going to be able to wring money and distortions out of the system by interest rates alone. Look, the amount of US debt has grown massively. Now, at $16 trillion, not including the $60+ trillion in liabilities, it would only take an interest rate of 11% and every penny of federal government tax revenue would go to just paying the interest on the debt!
Daily Bell: So true ... good point.
Jeff Berwick: If they stop printing money, the government will be insolvent right now. You see, there is no way out this time, without a massive change of living standards in the Western world. It is going to make the 1930s look like Disneyland. That's why we're advising subscribers to have a significant portion of their assets in precious metals. But more importantly, have those assets geopolitically diversified, because as the Western governments have their backs to the wall they will confiscate whatever they can.
It's not like it hasn't happened before. The US Government confiscated gold in 1933. Therefore, we have written a report called "Getting Your Gold Out Of Dodge," which is a living document that we are continually updating which has information on places worldwide where you can buy and store your metals ... as well as info on how to transport your metals.
Daily Bell: You seem to be growing aggressively. What are some ventures of yours?
Jeff Berwick: You are correct. We've been growing massively. We now have dozens of staff in a number of different countries and expect to be one of the largest media and services companies in the financial sector in the next two to three years. What happened was that over time we had many people write to us about internationalizing not only their assets but also themselves through second passports and expatriation. They kept asking us how they could do it.
We found, for example, there was no major company that offered second passports worldwide in an easy, accessible form. So as good entrepreneurs and capitalists, we went out and did it. We had and have people on the ground in dozens of different countries, doing direct deals with the local governments to offer citizenships in a quick and not-too-expensive manner. We currently are working with the Dominican Republic, Paraguay, Dominica, St. Kitts and Nevis and Cambodia and will be announcing more soon. (You can see more at TDVPassports.com).
We also help people set up international business corporations in countries without taxation and open offshore bank accounts. As I stated above, almost every bank on Earth has stopped accepting Americans as clients – which is why every American with assets needs a second passport. There are still a few who do accept Americans and we help get those set up. (You can see more at TDVOffshore.com.)
Remember all the people who fled their countries and arrived at Ellis Island in the US a hundred years ago? Well, now it's all going in reverse! And many in Europe are fleeing countries like France where they have a 75 percent tax rate on higher incomes and have seriously discussed moving that up to 100 percent!
Many who live in the Middle East, in places like Syria, Iran, Palestine and others, are also looking to be able to transact globally. The Chinese are creating more millionaires than anyone at this moment and many of them, too, are looking to get their assets outside of the control of the Communist Party. Russians ... the list goes on. It's a giant game of geopolitical musical chairs right now and TDV has positioned itself as a provider of information, analysis and services to help people rearrange their affairs across the globe.
It's all stuff I did myself starting in 2004 when I left Canada for good and now live as what they call a PT... a Permanent Tourist ... or a Prior Taxpayer. You can still arrange your affairs so as no one government has complete control over you or your money and I recommend those who can do so ... and fast. The Western governments are trying to close every door as fast as it opens. This is one of those situations where you'd rather be a year or two early than a second too late.
Daily Bell: Remind us again how can people get more information from you.
Jeff Berwick: You can sign up to our free blog right on the front page of our website at DollarVigilante.com. We also have a paid newsletter there if you want more info than what we provide in the free blog. If you are interested in getting a residency or foreign passport, check out TDVPassports.com and for offshore corporations and bank accounts go to TDVOffshore.com. Anything else to help people liberate and protect themselves and their assets during TEOTMSAWKI can be found at TDVMedia.com.
Daily Bell: Thanks for sitting down with us. Good luck.
Jeff Berwick: My pleasure. Good luck to you also and stay free!