Introduction: Jay Taylor is the editor of J Taylor's Gold, Energy & Technology Stocks newsletter. Throughout his career, Mr. Taylor worked as first a commercial and then as an investment banker. Most recently, he worked in the mining and metals group of ING Barings in New York. Prior to that he was involved in the first gold loan made in modern times in the U.S. to Amax Minerals, a 250,000 oz. loan facility led by Citicorp. In 1997 he resigned from ING Barings to devote himself full time to researching mining and technology stocks, writing about them in his newsletter, and assisting companies in raising venture capital.
Jay Taylor's web-based radio show, "Turning Hard Times into Good Times," can be heard live on the Voice America Business channel Tuesdays between 3:00 and 4:00 PM and can be downloaded the following day at JayTaylorMedia.com. Jay's guests have included, for instance, Jimmy Rogers, David Stockman, Ron Paul, Marc Faber, Doug Casey, Eric Sprott, John Hathaway, Edward Griffin, Howard Davidowitz, Ian McAvity, James Turk, Mish Shedlock, Richard Maybury, Rick Rule, Robert Prechter and Lewis Lehrman, to name a few. He is joined weekly on air by Daniel McAdams of the Ron Paul Institute for Peace and Prosperity to discuss geopolitical topics.
Daily Bell: Hi, Jay. Thanks for sitting down with us again. What's new with you? Any publications or conferences you want to mention or special appearances? What are you focusing on in your radio show lately?
Jay Taylor: I am now more focused on the gold and silver mining sector than I have been in a long time because I believe this is the most exciting time to pick up junior gold and silver mining stocks that I have seen since I began covering this sector back in 1981. The perfect storm for gold is very near, as many decades of lethal socialist economics is destroying capital and capitalism. When the fragility of the global monetary system is recognized by all, value will rapidly flee fiat currencies and return to gold. Thus, the holders of gold will hold true capital in the form of honest money, namely gold and to a lesser extent, silver. We are in a process of massive deleveraging of the financial system and historically, we know from over the past 300 years that when that takes place, the real value of gold rises dramatically and with that the gold mining industry enters a prolonged gold bull market. We are nearing the final leg up in the gold bull market, which I believe will take place over the next five years. With that, I believe fortunes will be made by those invested in gold and silver mining shares.
So given this view, I am staying focused on the gold and silver mining sector and I'm also using my web-based radio show, "Turning Hard Times into Good Times," to try to help as many people as possible learn about what the real reasons for our economic malaise is and what is actually true about American foreign policy. Both economic and foreign policy are so afflicted by an Orwellian fog that most American voters at best have the IQ of a moron when it comes to understanding the important issues – which is by the design of our establishment. So with the help of countless fabulous guests the message is getting across not only in America but around the world. My show can be listened to live on the Voice America Business channel every Tuesday between 3:00 and 4:00 PM and you can download each show the following day at JayTaylorMedia.com. I have a long list of amazing guests like Jimmy Rogers, David Stockman, Ron Paul, Marc Faber, Doug Casey, Eric Sprott, John Hathaway, Edward Griffin, Howard Davidowitz, Ian McAvity, James Turk, Mish Shedlock, Richard Maybury, Rick Rule, Robert Prechter, and Lewis Lehrman to name a few.
To help on the geopolitical side in terms of what is actually happening, as opposed to the mainstream media version, I have Daniel McAdams of the Ron Paul Institute for Peace and Prosperity with me almost every week. But aside from Daniel, other outstanding guests along those lines have included the likes of John Perkins and Daniel Estulin. And I also frequently have the GATA guys on my show because I think there is little doubt but that the gold markets are being capped to keep a frenzy out of paper into real money because the day that happens, it will be the end of the Anglo-American empire.
Given my extreme bullishness on the mining shares that is, of course, the main focus of my newsletter, "J Taylor's Gold, Energy & Tech Stocks," which can be accessed here.
As far as appearances are concerned, most of the venues where I had been speaking have either shut down or have cut back so my traveling and public speaking has been significantly reduced. The reason the venues have shut down is that the gold mining industry has been in a depression starting mid-2011 so junior mining companies do not have funding available for the various mining show conferences. I take that as one sign that the bottom is all but in for the junior gold and silver mining sector.
Daily Bell: Okay, some nuts and bolts. Is there more deflation in store for the US? Have the imbalances been wrung out?
Jay Taylor: What we have had is a massive inflation of what I call "debt money" because actually, debt is the raw material from which fiat money is manufactured. You can see from this Debt/GDP chart below that there has been a very modest reversal of total debt (public and private) to GDP in the U.S. post-Lehman Brothers, but it still remains north of 340%. That is far greater than the previous extreme during 1932 of 295% and hugely out of line with a range from 1870 to the mid-1980s of between 120% and 180%. If this isn't a picture of growing insolvency, I don't know what is.
(Click on chart to enlarge. Source: GlobalEconomicAnalysis.com)
The problem is that we have all been brought up on the Keynesian lie that all we need for progress is excessive spending and "animal spirits." No need to save or delay any consumption your little heart desires. No need to worry about balance sheets. Just spend, spend, spend even if it means debt is growing exponentially while income is stagnant or declining. I guess we have come to this point because somehow humankind loves the big lie. I guess many people simply command themselves to ignore reality and believe in fairytales. Believing in Keynesian economics is akin to believing in the tooth fairy.
Daily Bell: You once told us the West is on a steep and slippery slope. Now mainstream economists speak of a recovery. Were you wrong?
Jay Taylor: Yes, they speak of a recovery just like they think animal spirits and excess spending funding by excessive printing press money is all you need for prosperity. Unfortunately, nothing was learned from the 2008-09 experience. No, the West continues on a steep and slippery slope. Some, like Robert Prechter, think we are approaching another Dark Age. We can only hope and pray he is wrong but I fear he may be right.
Daily Bell: Is reflation working? Is the Fed going to tighten? Is QE really over?
Jay Taylor: Reflation is working only to the extent it is holding back powerful forces of deflation caused by the creation of debt money. The system if left alone would implode into a deflationary insolvency the likes of which the world has never seen before. The Fed is fighting against that powerful force by creating more money but the problem is that what we have is not simply printing press money, but money that is manufactured by debt, and debt is growing much more rapidly than the income they hope to create by printing more money.
Daily Bell: Are we still headed away from a democratic environment, as you have indicated in the past, especially in the US?
Jay Taylor: No question about it. You and many people who read this excellent format may not agree, but I think we are losing our liberties because our statist educational system, in a very self-serving way, has eliminated from the minds and hearts of Westerners the notion of a Creator or Supreme Being. If the universe was not designed with a purpose and self-sustaining balance by an intelligent designer then we turn to Caesar, Bush, Obama, Putin or Stalin for answers to life's burdens. Creating the myth of evolution across speciation is a very clever but total falsehood that has convinced most Americans, especially those with higher degrees, that there was no intelligent designer and that there is nothing higher than man in charge of our fate. That was a very clever design of our statist politicians.
"Trust in me," Obama says, and so the people willingly give up a voice in government. Americans don't even seem to care that everything they say and do now is recorded by our government and can be used against us if we disagree with policy. The misplaced logic seems to be, "I'm not a terrorist so I have nothing to worry about." Trouble is, by assuming humans possess attributes like omniscience and omnipotence, you pave the way for dictators. Of course, we now know that Big Brother's cousin, NSA, has one godly attribute, namely omnipresence. So he knows what you are thinking and doing, and depending on the definition of a "terrorist" you may just be one by virtue of opposing your government's policies.
Daily Bell: Give us an update on the euro. Is the EU going to split up or has the crisis been weathered?
Jay Taylor: It's all about how much longer the existing ruling elite can hold the existing global monetary system together. Of course, all the currencies these days are counterfeit but as long as the U.S. military remains supreme, I suspect the dollar will be the last one to go. However, as the parasites that run American continue to consume all the remaining capital, I think the Anglo-American Empire is now approaching desperation, which is why all manner of false flags are being used to con Americans and Europeans to beat the hell out of any country that doesn't want to use the dollar. At some point there will be a tipping point. I thought the Ukrainian conflict might pull Europe away from the U.S. but then, just like a false flag last year in Syria, I suspect we just witnessed another in the Ukraine with the downed Malaysian airliner. Only NATO and the puppet government established in Ukraine by the U.S. intelligence operation stood to benefit from such a tragedy. Whether we witnessed a false flag or not, the outcome was the same.
But as the global economy continues to contract we will see how long the geopolitical winds favor the U.S. and NATO. Indeed, Mario Draghi just noted that sanctions against the Ukraine are helping to push Europe into a recession. At some point, it's hard to see how the financially and morally bankrupt Western world won't implode or explode with nations seeking to look out for their own interests in defiance of the move toward a one-world government. But until that day arrives, I think the dollar remains the strongest currency and the linchpin and support of the Euro.
But as economic problems become more acute in Europe, we may very well see the Eurozone yet pull apart. Or perhaps the Fed will continue printing money to fund Europe, as it did in the recent past. That way, Europe will continue to be indebted to the U.S. What better way for the Anglo-American empire to lord it over Europe? The cracks are there to drive the Eurozone apart and to drive Europe from the U.S. But it's impossible to say when a tectonic shift will occur or what will be the catalyst that results in more decentralization around the globe. The powers that be are leaning hard against it because they are parasitically feeding off of what is left of the middle classes.
Daily Bell: Where is Britain headed? Out of the EU?
Jay Taylor: I think that is a very good likelihood because Britain's banking and corporate interests are too intertwined with those of the U.S. to get too close, to side with Europe. After all, the existing geopolitical structure that was formed from the spoils of World War II remains in place and the victors of that conflict want to keep it that way. The reason we still have a large number of troops in Europe is that our ruling elite want to keep the Europeans under our thumb. So our spies are busy there, checking up on the leaders of Europe to make sure they remain on the side of the Anglo-American Empire. And Britain is very much a part of the "wining side" of World War II so until there is a new order, which I believe is in the hands of the Creator, I suspect Britain's loyalty will remain first and foremost with the U.S.
Daily Bell: How about China and price inflation? When will the bubble burst, or has it already?
Jay Taylor: It is impossible to say when the Chinese bubble will burst but I think analysts are wrong to suggest China is a capitalist society and that its best days are just beginning. The only way you can say that is if you mistake fascism for capitalism. With so many new empty cities being built, not by market demand but by dictatorial command, and funded on credit rather than honest capital, which only comes from saving, how can anything but a massive debt implosion ultimately send China into a spiraling deflationary depression? Yet with the current propaganda turning more anti-China, I think it's doubtful it will happen right away. Indeed, J. Michael Oliver, who does some excellent technical work, is now shorting U.S. stocks and going long a Chinese Equity ETF. He makes the point that contrary to U.S. policy, which has been to prop stocks up with QE, China has allowed its stock market to decline significantly over the past few years. So he has turned bullish on Chinese equities for now.
If only the U.S. had acted as a free-market country, especially after the fall of the Soviet Union, we could have set an example for China and other countries that they may have tried to emulate. Indeed, a case can be made that Russia is now closer to the ideals of a free-market economy than the U.S. with Putin putting through a flat 17% tax rate. It's hard to believe but Russia may actually respect private property more now than the U.S. does. But alas, the U.S. model has emerged into more of a fascist model than a free-market capitalist model. If anything, on balance, anti-free-market capitalism is now a growing worldwide phenomenon, which is why I fear Robert Prechter's prediction of a new Dark Age may be right.
Daily Bell: What about gold and silver? Is the dollar due to slip against gold? How about silver? Is silver the better buy?
Jay Taylor: My scenario has the dollar actually getting stronger vis-à-vis various other currencies at least over the next couple of years. But I think gold will also become stronger even against the dollar as more citizens become aware that the Ph.D. standard is not fixing increasingly unstable markets. As confidence is lost, I think there will be a move to "safe havens," which will include the dollar, until the entire system breaks down. Of course, if the Europeans rebel against the dictates of the White House and NATO breaks apart, the dollar might be the first to fall among the major fraudulent currencies. If that is not the case then I think we are about to see the dollar and gold rise together, and for a time perhaps U.S. Treasuries, as all these markets are seen as a safe haven. But when the dam breaks gold will skyrocket and break away dramatically from all currencies because all of them are fraudulent.
With respect to silver, I'm actually less bullish on that metal than gold. Given silver's industrial component, which will be weak in my scenario of an impending depression economy, much of the demand for silver may be in decline. Of course, at some point, silver may take on more of a monetary attribute as "poor man's gold," in which event I expect it will do better. One thing in favor of silver is that given its industrial component, I think it is less likely to be confiscated than gold, if gold is required by governments in a new gold-backed monetary system.
Daily Bell: What happened to gold against the dollar? Why did the dollar rise against gold hard and fast? Was that manipulation?
Jay Taylor: I think you can assume certain interests are manipulating the price of gold through the virtual paper markets. Bullion banks have virtually unlimited capacity to hit the markets to scare folks out of gold should it begin to rise and they would do that, as Alan Greenspan understood full well and explained in his 1966 article, "Gold and Economic Freedom." If the masses trade paper money for gold, the socialist state (of which the mainstream bankers are enablers and profiteers) would disappear very quickly. But I think investors should keep their eyes on the more honest gold and silver bullion markets that are taking shape in Shanghai and elsewhere, especially in Asia. Those markets are truly bullion markets, not virtual markets in which quoted prices may as well be widgets or casino chips. The gold and silver futures markets in the U.S. and the UK are truly fraudulent "pretend" markets in which only about 1% of the contracts ever settle in metal. And I think they are being used as a propaganda tool to keep Wall Street and the masses disinterested in honest money in favor of a currency that can be created out of nothing and used as a "legal" instrument of theft.
Daily Bell: Will gold come back? Will the dollar fall against gold? When?
Jay Taylor: I think gold will rise in dollar terms to levels currently hard to fathom because the masses are still successfully conned into believing the dollar is as good or better than gold. But as just noted, I think the dollar may be the last currency to bite the dust even as gold and the dollar both rise vis-à-vis most other currencies.
Daily Bell: Give us a bit more insight into dollar activity generally. Is the dollar reserve in decline? Is it over? What can take its place and when?
Jay Taylor: The dollar is most definitely in decline. I don't have the numbers in front of me but it is continuing to lose market share as a medium of exchange for trade and as a reserve currency. And I think this is something that we can count on continuing because even our NATO allies are making deals to trade directly with the Chinese and Russians in non-dollars. And there are many examples, too, of countries more hostile to the U.S. like Iran and China, Iran and Russia, China and Russia all agreeing to trade in their own currencies and not dollars. What can take its place I suspect could be something like the BRICS countries are trying to assemble, like a basket of currencies of all the BRICS countries, which I suspect may have a gold component in it or could be entirely a gold-backed system. This is why I believe China and Russia are accumulating amazing amounts of gold from the West.
I think this is a threat to the Anglo-American Empire and I suspect it is one reason the U.S. is trying to pick wars with countries opting out of the dollar. As the American economy inevitably continues to decline, given its Keynesian policies, that can only make the dollar less attractive with its tendency to print more and more dollars faster and faster in an attempt to gain prosperity. In fact, I believe this is a trend that is making the Anglo-American Empire more desperate and hence much more dangerous for the sake of world peace.
Daily Bell: What about central banking? Will monopoly central banking continue or has it seen its day, given that it has done so badly?
Jay Taylor: Ultimately, the current monetary system will self-destruct and hopefully central banks with it – though that is more of a hope than an expectation. The desire clearly on the part of the NATO alliance or at least the Anglo-American component of NATO is to step-by-step eliminate all other central banks except its own. I think the battle in Ukraine is very much about this question. Putin rightfully fears NATO is seeking to take away Russian sovereignty. And the Chinese wonder why they shouldn't be able to build a navy to protect their own sea lanes. But NATO doesn't want that because it wants to have control over trade and ultimately to head up a one-world government with China and Russia being subservient to those among NATO who lust for the pinnacle of global power. That means what the ruling elite want is one global central bank with themselves in charge. As the war cycles increase I think it's all about this question of who gets to print the world's money from which those with that privilege can continue to grab ever more money and power for themselves.
Daily Bell: Is hyperinflation the ultimate destination?
Jay Taylor: I think we are perched on the edge of a narrow cliff that falls thousands of feet down on either side of hyperinflation or a massive deflation. On the one hand, with debt outstripping GDP by such a large and growing margin, the natural market desire is to deflate like never before. I think the fact that trillions upon trillions of dollars of newly created money has not been able to generate hyperinflation is a testimony to enormously powerful deflationary forces. On the other hand, we have very evil central bankers who are can create endless units of currency, which people will reject at some point in time. But totalitarian governments, which the U.S. is fast becoming, can make it mandatory that fraudulent money is used and enforced over the barrel of a gun. At some point I suspect the ultimate outcome will be a hugely destructive hyperinflation but before that we could very well see a deflationary implosion that then triggers the kind of hyperinflation when past governments have gotten into fiscal trouble. It all depends on how long the dollar is psychologically accepted. As noted earlier, I remain dollar bullish over the next couple of years, so I think if hyperinflation lies in our future, it will come only after we witness a dollar collapse.
Daily Bell: How long will stock markets continue to climb? We think for several years possibly.
Jay Taylor: I think we are nearing a major decline, given my view that deflation is on the horizon. If I'm wrong about hyperinflation being in our more immediate future, then you may be right at least in nominal terms. But keep in mind that stocks can rise in value but decline in purchasing power, as they did in the 1970s. Jim Dines once pointed out to me that in real terms, stocks in the inflationary 1970s declined almost as much as they did in the 1930s.
Daily Bell: We think small cap opportunities are good ones – and that marijuana in particular is a possible winner, at least until there is a larger blow off. What's your take on the marijuana meme? Does the power elite seek to legalize it around the world?
Jay Taylor: I have not followed this emerging sector very much but I suspect you are right. And I'm guessing that the political class sees this as a new source of revenue through taxation if they legalize it. On the other hand, I think the criminalization of marijuana has itself been a crime perpetuated to prosper private jails and justify a military presence in many foreign countries, not really for the purpose of controlling marijuana but for snooping on foreign governments and keeping them in line with the Anglo-American Empire. It started during the Nixon years. That's when our military became ever more present in Latin America and South America. I'm guessing there is a pharmaceutical angle to the legalization of marijuana as well, as I know at least one large British pharmaceutical company is working on a marijuana-based drug.
Daily Bell: We're seeing marijuana being decriminalized everywhere. We also believe this trend will end in worldwide legalization. Is this a possibility?
Jay Taylor: Yes, I think it no doubt is. Perhaps it's a way of even more effectively keeping people stupefied even beyond the dumbing down of the population by mass media propaganda and current IT gismos that keep people from thinking.
Daily Bell: What about drugs generally? Will they be legalized, following Portugal's successful example?
Jay Taylor: America is already a drug-infested nation, including with prescription drugs. I suspect that drugs will be increasingly legalized so that the government can get a piece of the action in the form of taxes. And since our fascist government is in bed with the pharmaceutical companies, limiting and controlling supplies, prices can be kept higher and hence tax revenues greater by seeking to sell more drugs, but with government in conjunction with large pharmaceutical companies controlling the markets. And by handing out licenses, politicians will have one more industrial sector that can hand out campaign contributions to perpetuate this unholy alliance.
Daily Bell: As marijuana begins to be grown worldwide, will it become a luxury item like cigars or wine? Could it be branded?
Jay Taylor: I suppose that is the aim. And if it is a luxury, then it can be taxed like alcohol and tobacco products.
Daily Bell: Why the sudden interest in marijuana around the world? What does society say to those who have been imprisoned for smoking cannabis, previously considered "immoral"?
Jay Taylor: I actually don't think marijuana is any more immoral than alcohol. In fact, it has many positive medicinal uses. I think it was made illegal to give the U.S. government more control and, as I said earlier, an excuse to invade foreign countries. Society looks down on those in prison for marijuana usage but that's because they have been kept ignorant by our government or simply let their own biases prevail. In my view, rounding up poor, black kids, for example in Los Angeles, who couldn't afford a defense attorney was a grand fascist program to generate $40,000 or $50,000 a year per jail cell to help private prisons make huge profits. Now, having made marijuana illegal, government has given itself the illegal right to license something that should never have been touched by government in the first place. If there is immorality relating to marijuana, I think it is more on the government's side than the users' side or even the pushers' side.
Daily Bell: If marijuana is being legalized, shouldn't it be privatized as well? Or do you think the trend will be for more government involvement on a regulatory instead of criminal-judicial level?
Jay Taylor: My preference would be to keep government out and keep it private. But then, that goes with my preference of maximum liberty and responsibility of each individual, which means keeping government out of our lives to the greatest extent possible, as desired by our Founding Fathers.
Daily Bell: Then there will surely be a crash, and a bad one. How bad? Bad enough to call for the creation of some kind of global currency?
Jay Taylor: Yes. I think that is the end game the ruling elite have in mind and I think it is playing out in real time right now in rising wars around the globe. A one-world monetary system with them in charge and with the tightest control possible of each of us is what seems to be taking shape. Certainly the technology is very much available now to implant a chip in each human being that can be used to ensure we don't get away with the freedom to interact with each other person in our lives without paying taxes or spending money for anything but what the government thinks we should spend it on. This is not merely an Orwellian fantasy. A chip implant has been discussed for our future as many as 10 years ago at the United Nations. And when I see American foreign policy doing nothing but increasing chaos and bloodshed around the world wherever it goes, I have to think our ruling elite is engaging in an intentional destroy-and-conquer modus operandi not only through our military but through economic policy as well. Keep people spending more than they earn and keep them in debt and defaulting on that debt; then our fascist system owns them. The last thing the ruling elite want is people who are not in need of an earthly king.
Daily Bell: Is this part of some sort of larger dialectic – establish both sides and then synthesize a global system?
Jay Taylor: Yes, I suppose that may be correct. And I think it is very interesting how J.P. Morgan has been buying off Chinese officials by providing the kids of powerful Chinese leaders with cushy jobs and big paychecks. Thinking back to World War II, J.P. Morgan, Chase and others were funding and providing supplies to both sides, establishing connections on both sides so that in the end they could have control over both. Given how we have held Europe and Japan under the Anglo-American thumb since World War II, it seems the strategy has worked very well. Now I think the goal of this same ruling elite is to surround and conquer China and Russia. I think that is what we are seeing playing out now in real time.
Daily Bell: Let's talk about war. What's going on in the Middle East? Are these wars inspired by US false flags and why?
Jay Taylor: Yes, I think they are, as I mentioned, designed to divide and conquer. Certainly that was true in Syria last summer. Remember allegations of poison gas by the Syrian government? No proof was ever provided and indeed, there is considerable evidence that it was a false flag.
Daily Bell: What about Ukraine? Is the US determined to have a shooting war with Russia?
Jay Taylor: Again, yes, I think that is true. In fact, Daniel McAdams of the Ron Paul Institute for Peace and Prosperity has noted how similar the downed airliner in the Ukraine was to the poisonous gas allegations in Syria last year.
Daily Bell: What about China? Is China looking to start a war in Asia?
Jay Taylor: No, I don't think so at this point in time. I think that is the false narrative of our own State Department. I think China wants to trade, perhaps on her own terms, and we have been willing to do that. But I do think China wants fair trade from their perspective and I think she thinks she has the right to control her own sea lanes rather than allowing the U.S. to do so and thus control trade. I'm not saying I think China would never start a war but at this point in her history, I don't believe that is what she wants. But she doesn't want to be strong-armed and abused by a powerful U.S. military that is seeking to dominate the world.
Daily Bell: Will Japan participate? Why has Abe been so warlike? Will Abe's Keynesian stimulation of the Japanese stock market bear fruit? Why did he initiate it now?
Jay Taylor: Japan has been a client state of the U.S. since WWII. I suspect our own intelligence operatives have had much to do with Japan acting as our globalist elite wishes them to operate. And since you cannot separate economics from foreign policy, I think it is also understandable that Japan is starting to go Keynesian. After all, spending for war is supposedly good for the economy, according to Keynesian thinking. Now with China gaining economically, I think our elite are using Japan as an extension of American power and aggression as our client state, as NATO seeks to control and ultimately rule over or at least dominate and control China under its thumb much as it has Europe since World War II.
Daily Bell: Is the US headed toward some kind of military dictatorship? Does the military-industrial complex continue to grow in clout and power?
Jay Taylor: Yes, without a doubt. In fact, are we not there already? If the president of the United States can determine who he thinks should be killed without any oversight, how can anyone say we are not there already or at least that the mechanism is in place for complete dictatorial control? I don't see this changing until the dragon becomes so obese that its heart stops beating. And as the dragon becomes threatened he becomes ever more dangerous. As the global economy continues to choke under the burden of anti-capitalist Keynesian policies, the beast will continue to become ever more threatened and with that so will our life, liberty and happiness continue in decline, much as was the case under the King of England that stimulated the American Revolution.
Daily Bell: Who does Obama serve – his constituency or the political warlords in DC?
Jay Taylor: The military-industrial complex and all the corporate elites, including the bankers that are directly involved with it, are who Obama serves. In addition, I think major economic sectors like Big Pharma as well as major media are part of who he serves and, of course, ultimately a handful of wealthy families that control those corporate entities. But as a good Machiavellian practitioner, it is imperative that Obama does a good job of lying. At least to his hard-core supporters, he has been successful with his lies. He says all the right things to keep his core support in place. But if they examined what he is doing rather than what he is saying they would realize he is a friend of the warlords and not of the people.
Daily Bell: What about the rest of Congress? Are they capable of changing things? Can the US return itself to a constitutional republic? Is it too late?
Jay Taylor: With 99% of Congress bought and paid for by corporate interests and with the country financially on a path toward destruction, I think it is too late for a positive change before the fecal matter hits the rotary oscillator.
There is hope, however. People like Ron Paul are heroes of liberty because they are helping a growing number of youth to understand the evils of central banking and fiat money, which is used to help the ruling elite rob and pillage the masses. We can hope and pray that when the system finally self-destructs enough of these younger folks who understand from whence liberty is derived are in a position to return America as well as other nations toward the basic rights endowed to us by our Creator. Hopefully, they can help restore the American Republic once the Anglo-American empire implodes.
Daily Bell: Who will win the presidency after Obama, Republican or Democrat? Name some names.
Jay Taylor: Until the system falls, it won't matter much at all. In fact, the worst that might happen for the longer term is that a Rand Paul-type might get elected, causing the people to believe real change and balance on the political spectrum has been restored. But until the current order is destroyed, the military-industrial complex will remain firmly in place and so anyone who is elected to the presidency prior to that event will simply be an enabler of the perpetuation of the current evil system. Unless he is vetted to become president by the ruling elite there is no chance of being elected to that office. We saw how that worked with Ron Paul who was and still is enormously popular.
When you hear a name like Rand Paul mentioned time and time again in the mainstream media as a viable candidate, it means he is being vetted positively by the establishment. In other words, the ruling elite believe he can be controlled by them and not the people – which reminds me of a very brief comment I made to Rand Paul at the swearing-in ceremony when he was first elected to the Senate. He and Ron Paul shared a large room where friends of both men were invited to join in the celebration. At one point, Rand walked into the room straight toward me and reached out to shake my hand. I immediately said to Rand what I had been thinking for a long time, which was, "Your legacy will be whether you can be as pure as your father." Unfortunately, Mitch McConnell moved over to Rand and interrupted any further conversation. But I later related my comment to Ron Paul. Ron smiled and said, "I bet he didn't want to hear that."
People who worked as staff members for Ron in Washington and who observed Rand in the early days of his Senate career feel quite sure he is a man who is seeking higher office above seeking higher truth. Given that Rand is being mentioned as a viable candidate in the mainstream press, I believe he has already passed on the signal that the ruling elite can work with him, as was the case with Ronald Reagan, who certainly was not the choice of the mainstream.
Many people of a libertarian persuasion are tempted to support Rand and certainly his policies would be favorable, from my perspective, to most of the other candidates. But if a Rand Paul presidency simply prolonged the evils of the current system, then I think that is not what we should be hoping for.
Daily Bell: Will FATCA and GATCA be fully implemented? What are the ramifications?
Jay Taylor: I suspect they will be fully implemented. There are few representatives of the people left in Washington to stop their implementation. The effect will be to further destroy capital and capital markets and quicken our global economic decline.
Daily Bell: What do you suggest people do to protect themselves? Hard assets? Commodities? Additional passports?
Jay Taylor: Hard assets are a must, starting with the most portable of all, namely gold and to a lesser degree silver. Owning a home free of debt is a good idea and having plenty of life-sustaining commodities on hand like water and dried food makes sense. Having a trade that is useful that you can barter with for life-sustaining needs is a good idea. As for passports, if we have a global dictatorship, I'm not sure how much good that would do most of us faint-of-heart folks. Con artists who know how to lie might do well. Otherwise, as a 67-year-old-guy, I'm going to sit it out here at ground zero in NYC and wait for them to take me away if it comes to that. And I'm guessing what I have said in this interview is enough to qualify me as a "terrorist" much as the Framers of our Constitution were considered terrorists in 1776.
Daily Bell: Many of the issues we discuss find their way onto the Internet and into the alternative media. What's the future of the Internet? Will it become more controlled?
Jay Taylor: I suspect the Internet will continue to be used by freedom-loving individuals but at the same time, everything we do on it can be and is being watched by NSA. Thus, whatever we say can and will be used us if someone thinks what we think makes us a "terrorist." So I suppose it will be used by the establishment against each of us common folks. I think the writing is on the wall. At the same time, I believe there will always be liberty-loving individuals who will, like our Founding Fathers, risk everything for the natural rights that have been given to us by our Creator.
Daily Bell: What is the future for the West? Will it become ever more corporatized and mercantilized? Will this trend continue? Or is what we call the Internet Reformation gradually undermining the fascist trend?
Jay Taylor: I hope the latter is right. I fear the former because at this point not enough people are aware of what is going on or they are simply too busy earning a living and raising their families and watching their favorite sporting events to be bothered with that question. The West has lost its Judeo-Christian roots and with them the honest values upon which the U.S. was formed and that are necessary to enable free-market capitalism to work. When people make exceptions to the ideas like those of the Ten Commandments such as "though shall not covet" or "though shall not steal" they beget government intervention and with that the destruction of free-market capitalism.
Daily Bell: Give us a big picture summary. Inflation versus deflation. Peace versus war. Most importantly, freedom versus tyranny. Is it a good time to be alive now or bad one?
Jay Taylor: Deflation comes first with a major spiraling down that will make the 1930s and 2008-09 look like child's play. The bankers will try to keep the system liquefied with endless paper money printing but keep in mind that all the time they do that, debt continues to grow much faster than income. So in my view, the system is moving ever closer to a deflationary default.
I could be wrong about that if John Williams's view that the dollar will be the first major currency to collapse, as early as this year, turns out to be true. If confidence is lost in the dollar I think we could see a massive inflation overnight. On the other hand, a dollar collapse may also result in unbelievably high interest rates, which could immediately catapult the U.S. economy into a horrific deflationary depression. At that point, fiscal and monetary policy might actually literally print money outside of the banking system such that there is no debt component dragging down demand. Then I think we could be off to a global inflation for the ages.
One thing I am quite confident about is that the debt/leverage ratio will have to decline very, very markedly. And when that happens resources flee to gold as confidence in the fiat system collapses. One thing we also know from history is in light of major deleveraging episodes, gold mining booms as people seek to secure real money to rebuild their lives after the central bank criminals rape, rob and pillage the populace.
Regarding the question of whether it is a good time to be alive or not, of course it's good to be alive. And given my faith in an omniscient Creator, I'm confident now is a good time to be alive, although I do believe we are heading toward a time of trials and tribulations that will make many wish for the good old times when life was simpler and more prosperous. But life is good and I'm thankful to be alive.
Daily Bell: Any other points you'd like to make?
Jay Taylor: No, other than to say thanks for the opportunity to talk with you. Also, keep up the good work for the cause of liberty. You are providing a valuable service by allowing thinking people to express their views unlike the mainstream media, which simply brings on regurgitates with Ph.D.'s from fancy universities behind their names. Someone once said, "If everyone thinks the same thing, then no one is thinking, " and when you listen to mainstream media, there is no major dissension of opinion on important issues. Your service is encouraging people to think and that's a good thing.
Daily Bell: Thanks for your time!
Jay Taylor: My pleasure!
Jay Taylor says he is "more focused on the gold and silver mining sector than I have been in a long time because I believe this is the most exciting time to pick up junior gold and silver mining true capital in the form of honest money, namely gold and to a lesser extent, silver."
He also points out that economies are involved in a massive deleveraging and that eventually the dollar will plunge against gold. This will create a prolonged bull market in gold.
We agree with this analysis, including the idea that the final leg of the bull market is about to be launched – but we are not assured of the timing. In fact, we believe the Wall Street Party may run on for some time yet.
Thus, one takes one's profits from the paper bull and then reinvests in metals …
Thanks to Jay for a most interesting interview.
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