Introduction: Brandon Smith is founder of the Alternative Market Project (www.alt-market.com) as well as the head writer and co-founder of Neithercorp Press. He specializes in macroeconomic analysis as well as studies in mainstream media disinformation, and is now focusing on the creation of a national network of barter markets designed to insulate and protect local economies from the inevitable collapse of the current unsustainable fiat system. His work has been published in numerous places including LewRockwell.com.
Anthony Wile: Give us some background. Where did you grow up and go to school?
Brandon Smith: I've lived all over the country in every environment America has to offer. The Pacific Northwest and the "Redoubt" has always been my favorite, and that is where I live now. My schooling experience was like any other person's experience who went to one of our fine public institutions: monotonous, pointless, and it probably did some irreversible psychological damage.
Anthony Wile: Did you go to university?
Brandon Smith: No, all of my education comes from personal interest and personal study. I am thankful I did not go to a university after seeing the frothing hordes of Social Justice Warriors / Communists slithering out of so-called "higher education" the past decade.
Anthony Wile: How did you discover Austrian economics?
Brandon Smith: I've always been a big proponent of free markets and localism. It was not until 2005/2006 when I started writing for the liberty movement that I realized most of my economic foundations ran parallel to Austrian economics. I think that any analyst who pursues the concept of freedom in economics is going to come to the junction of Austrian economics eventually. Ron Paul's political efforts, of course, further inspired my direction.
Anthony Wile: When did you decide to write columns and to found the Alternative Market Project?
Brandon Smith: I started a simple website called Neithercorp Press back in 2006 under the name "Giordano Bruno." At that point I was only writing as a form of therapy to get my thoughts on the frightening state of the world on paper (or digital paper). For some reason I became rather popular, and my work was being republished on most high traffic sites from Zero Hedge to Lew Rockwell to Infowars.
In 2010 I was approached by Oath Keepers founder Stewart Rhodes, who asked me to do some economic analysis for his organization. It became clear that it would make more sense to start using my real name and to move toward more tangible efforts rather than writing analysis alone. I launched Alt-Market.com, the Alternative Market Project, that year with the goal of promoting alternative communities based on individual liberty. This included localized barter and trade groups, preparedness groups, alternative security measures like neighborhood watches and militias, etc.
Anthony Wile: Do you have other publishing plans?
Brandon Smith: I find that working on books is counterproductive in many ways because once you are ready to publish the world has already changed. I do continue to write for Oath Keepers and Personal Liberty Digest.
Anthony Wile: Tell us about the barter program, please.
Brandon Smith: To be clear, I do not take charge of barter markets nor do I administrate networks. I provide a meeting space online and I promote the system of independent localism wherever possible.
That said, I believe based on my research of social and financial upheaval over the past two centuries that barter networks are the natural inclination of cultures in crisis. Fiat monetary systems and casino-style equities and trade systems cannot be counted upon for more than a couple generations at a time; then you start to see major decline. Sometimes the rebuilding period is marginally painful; sometimes it is tremendously painful. Sometimes, there is no rebuilding of the original structure. Period.
However, there is always barter and localized trade. My theory is that if a society can retain localized and self-reliant systems in spite of "globalization" (or forced globalization), then people will always remain free. It is the threat of fiscal calamity that has driven nearly every tyranny of modern times. When people are not reliant on the mainstream system, they cannot be manipulated by it. There is still a need for physical resistance against tyranny, but such resistance is far more substantial when the people involved are economically independent.
Anthony Wile: Where are we located within the scenario of the larger collapse, in your opinion?
Brandon Smith: We are near the far end of the collapse spectrum. If you look at the real data rather than goosed-up government data on anything from GDP to inflation to unemployment and national debt the facts become undeniable – we have been in a depression level event since at least 2008, and as we enter 2016 the facade put in place by central banks is falling away, or is being deliberately ripped away.
We witnessed the first hints of the renewed crisis under the surface during the Fed taper, then again near the end of 2014, and again in the summer of 2015 at the mere mention of an interest rate hike. Each time, central banks used stimulus measures or false promises of potential stimulus to prop up market psychology and keep Americans spending and investing frivolously rather than saving and preparing. In my article on the "three pillars" holding up the U.S. structure, I pointed out that QE, near-zero interest rates, and the dollar's world reserve and petro-status have kept things on life support. Two of those pillars have now been removed. The third, the reserve status of the dollar, is currently under attack from multiple sources, including allies like Saudi Arabia with threats to depeg.
This is why we are seeing violent swings in equities again, much like 2009. The plug to the life support machine is being pulled.
Anthony Wile: Is the larger collapse orchestrated or evolutionary?
Brandon Smith: I have based all of my work and predictions on the knowledge that the collapse is absolutely deliberate in nature. The internationalists and central banks openly admit to their pursuit of what Christine Lagarde at the IMF calls the "global economic reset." If you want to know what they really mean by "reset," you can go read a 1988 issue of the Rothschild-owned magazine The Economist in an article titled "Get Ready For A World Currency By 2018." Nearly every measure outlined in that article has taken place, but the U.S. still needs to be reduced in economic footprint to make way for the new global basket currency (Special Drawing Rights).
Most recently, I predicted the Fed taper of QE despite serious opposition from other analysts in the movement. I predicted the inclusion of China in the SDR. I predicted the exact timing of the first interest rate hike, again with considerable opposition at the mere notion. And, I predicted the market turmoil that we are now seeing due to the rate hike – all on the foundation that there is a concerted effort to position America for an engineered collapse.
If you assume that the Federal Reserve exists to prolong or protect the life of the American economy, then you will never be able to grasp or predict the event now taking place. If you realize that the Fed is a saboteur of the American economy, everything falls into place.
Anthony Wile: How does the larger collapse work? What are the trigger points?
Brandon Smith: I wrote a six-article series on the reasons behind the collapse last year entitled "One Last Look At The Real Economy Before It Implodes." I still was not able to cover every aspect of the problems we face.
To summarize it all down in the case of the U.S. over the past decade – The Fed has been diluting the buying power of the dollar since it was established, but this went into overdrive after TARP and QE. We have yet to see the true effects because most of these fiat dollars are being held overseas (not for much longer if countries like Saudi Arabia depeg from the dollar). They have facilitated a near doubling of national debt in the past eight years, and that is just the official number. They made investment markets completely dependent on stimulus and low interest rates to maintain market stability, much like a heroin pusher turns a customer into a junky. Now, the Fed is taking the monetary smack away and we are about to have a heart attack. The taper started the plunge. The end of ZIRP is finishing most of the job.
Again, the Fed has a habit of making financial crises worse by raising rates into a deflationary spiral. They did it during the Great Depression and they are doing it again today. The primary trigger of the current market panic, though, is the fact that most major banks and corporations have been relying on no-cost overnight loans from the Fed to issue stock buybacks. That is OVER. The rate hike kills that method of propping up markets. There is really nothing left to keep them afloat. The trend for the rest of the year will be down, down, down, with sporadic up days amounting to nothing more than a dead cat bounce.
Anthony Wile: Is the larger collapse inflationary or deflationary?
Brandon Smith: A mixture of both. We are really looking at a stagflationary or hyper-stagflationary event. Elements of the economy will violently deflate while other goods and services and properties will hyperinflate. It's basically the worst of both worlds.
Anthony Wile: How bad does it get?
Brandon Smith: In order to meet their stated global currency goals, the internationalists will have to drop a sledgehammer on the dollar. Only a massive currency crisis will manufacture the consent from the masses required to introduce a global basket system as the new reserve. Since the only thread left holding our financial system together is the dollar's reserve status, I can only imagine that the resulting decline would be historic in nature and devastating to the current population.
Anthony Wile: You see current events as a kind of war between globalists and the rest of the population. Do you see it as evolving into a shooting war?
Brandon Smith: Yes. When collectivists (society based on forced associations, forced communities and the "greater good" over the rights of the individual) occupy the same space as individualists (society based on voluntary associations, voluntary communities and the rights of the individual as the greater good), a war is inevitable. The two philosophies cannot be reconciled.
Anthony Wile: What should people do to protect themselves?
Brandon Smith: Become as independent from the mainstream system as possible. Build voluntary communities based on free markets, production and preparedness. Start training to provide your own security. Organize security groups based on asymmetric warfare. Study successful rebellions versus failed rebellions.
Anthony Wile: How about gold and silver? People should buy more?
Brandon Smith: I would say they are a tremendous buy right now, but keep in mind that we have more of the deflationary portion of the breakdown to go through, and commodities are going to remain extremely volatile until the dollar officially loses reserve status and gold and silver decouple from manipulated paper markets.
Anthony Wile: Pre-public companies continue to provide good opportunities?
Brandon Smith: As far as investment is concerned, I would stick to companies that produce or manage necessities. For example, Camera-On-A-Stick is not a necessity.
Anthony Wile: The cannabis sector remains promising despite grim markets?
Brandon Smith: I think people should be more focused on industrial grade hemp. That is where true economic revival will be found. Hemp is a wonder plant.
Anthony Wile: Where would you put your funds generally?
Brandon Smith: Guns, food, raw land, gold and silver – anything that makes you more self-reliant. Imagine what could happen to you or your family if you are not armed and there is a crisis scenario. I don't believe in being at the mercy of anyone, including government gone rogue. If you are not armed, your chances of surviving free are zero. If you are armed, there is at least a chance.
Anthony Wile: What is so attractive about a new order domestically and internationally and why do many seem to want one?
Brandon Smith: It appeals to the subconscious collectivist instinct. Being independent and self-reliant is scary to many people. Try dropping your average yuppie in the woods for a little while alone without their electronics and without knowing how long they will be there. They'll lose their minds from the solitude before they ever dehydrate or starve.
Many people also romanticize the notion of a peace-filled, one-world commune. A world without conflict where no one starves, where no one needs to worry about money or bills or shelter. A world where energy is free and employment is based on personal interest rather than survival necessity. A world where your feelings are never hurt and everyone is treated exactly the same because accomplishment has been homogenized for the sake of the group rather than the competitive drive of the individual. Kind of like Star Trek. It's a nice fantasy, but that is all it is, a fantasy.
Today, too many people have trouble differentiating between fantasy and reality, and so new world order ideologies gain substantial traction. That said, there has been an incredible awakening from 2006 to today. Whether or not it is enough, we'll have to wait and see.
Anthony Wile: Is the Internet helpful in this regard?
Brandon Smith: It's a helpful tool as long as your efforts and organization are not relegated only to cyberspace. You have to make tangible efforts and institute actual organization in the real world around you everyday. Otherwise, all the eloquent arguments we put forth on the Web become meaningless. The globalists are not going to be swayed by them, and we're going to have to get rid of them someday. That requires physical organization and intelligent action.
Anthony Wile: Any other thoughts?
When societies face sociopolitical and economic crises, the solutions do not necessarily involve Hollywood-style revolutions. Instead, individuals often must muddle through for themselves, as we have often discussed. Mr. Smith seems to have similar sentiments.
For him, barter is an essential component of surviving and thriving during a time of social tension and economic dysfunction. This is a valuable assessment and his commitment to supporting barter on a national scale is admirable.
Barter, of course, is not the only solution. As the world's economic situation continues to degrade, investors seek numerous alternatives to what has gone before. We often suggest real estate, farmland, second homes and gold and silver.
These are not traditional "investments" but have the advantages of providing tangible assets that in certain cases have utility above and beyond their intrinsic value.
Farmland, for instance, may be a good investment but it can also provide you with food. Will it come to that? Are we facing the possibility of famine in the West – a region that hasn't faced such realities for decades?
Perhaps not. One certainly cannot insist on the inevitability of "catastrophic" scenarios at this point. Optimism may be warranted as well as pessimism. But then again, as the old adage goes, "Better safe than sorry."
If you haven't reconfigured your portfolio and secured your wealth via precious metals and tangible assets, now would be a good time to do so. In investing, as in life generally, timing can be critical. Anticipate the best case but prepare for the worst. Thanks, Brandon, for an interesting and frank assessment of economic issues in the 21st century.