Introduction: Ron Holland is an author, financial expert, Austrian economist, entrepreneur and international business strategist who believes in a return to limited decentralized government like the Swiss Confederation and the former US Articles of Confederation. He has provided strategic business consulting and advisory services to numerous private and publicly traded companies over the past 42 years in diverse areas of finance and marketing including banking, trust department leadership and real estate, as well as in the investment industry, from broker and retirement consultant to president of a national investment firm. Selections of his essays can be found in the archives of LewRockwell.com and TheDailyBell.com.
Daily Bell: Thanks for taking the time to participate in another interview. Since you were here last time in December, things have continued to erode in the global economy. Do you feel the downward trend for the US dollar is going to change anytime soon?
Ron Holland: Thanks for having me back, always a pleasure. With respect to your question about the future of the US dollar, before I answer it, I would like to say that I am not anti-American in anyway and, in fact, quite the opposite. My views are firmly aligned with those who believe in an individual's right to life, liberty and the pursuit of happiness. But today in America we see these rights eroding right along with the dollar. So I have begun to speak out along with millions of other Americans.
Daily Bell: It does seem as if people are growing angrier, and more awake about what's going on. Or maybe that's just our bias.
Ron Holland: It's because the system is falling apart and growing more obviously unfair at the same time. The Anglosphere power elite has taken complete control of the US – of the entire West, as a matter of fact. Of course it's always been that way to some extent.
Daily Bell: You have a point about the obviousness.
Ron Holland: It used to be that they tried to hide it but the Internet has made that increasingly impossible as the DB often points out. So, it's like they don't care anymore. They're pursuing their one-world vision no matter what. If you get in their way, they'll try to run you over. And people resent it. Trouble for them is there are a lot more of us than them.
Daily Bell: You think people are seeing a pattern?
Ron Holland: It's a combination of the economic downturn and the new communication technology. People see the amount of money being thrown around on bailouts and wars. It can't be hidden anymore because it's available for anyone with a computer.
First they instituted central bank around the world and then they began to build their new world order, funding it by printing money-from-nothing. When the business cycle soured, they'd distract people with war. But again none of this is working so well now. It's a fairly brutal and even obvious system once you understand it.
Daily Bell: It certainly worked well in the 20th century.
Ron Holland: No doubt about it. Still, today, despite what I consider an awakening, we still have large number of people who don't understand what's going on and maybe never will. Some of them are barely capable of critical thought. But those who are aware are growing too and at a faster rate than ever before. What gets people's attention is when the economy is not working. And today there's nothing left to milk in the West. The cow is dry and the cream has been siphoned off – and it sure as heck isn't in my or your cup.
Daily Bell: We like to use the term Internet Reformation.
Ron Holland: It sums it up rather well. Internet Reformation. John Q. Public is starting to understand that they have been the subject of a massive mind manipulation ever since they first walked through the doors of an American public school. It's like a warm bath. Even after you get out of school, you're subject to the same propaganda. The mainstream media is there to reinforce it as are the establishment historians. In the 20th century there was literally no respite. But in the 21st century the alternative has really come on strong. Sites like yours (to which I encourage all readers of this article to subscribe – it's free! – Mises.org and LewRockwell.com, just to name a few, are speaking truth to power. It's an entirely different kind of illumination and it's making a real difference.
Daily Bell: We've noticed it's hard to take sometimes, to accept how badly you may have been manipulated and fooled. We certainly know the feeling. It makes you sick.
Ron Holland: It's not something you have a choice about. This knowledge is filtering around the world. People are waking up from a bad dream – or at least understanding why their lives are as they are. They've been robbed, and it's better to live with that knowledge than without it. Once people start to see this gigantic cage of world government being built around them, they start to do something. That's what's behind the Tea Party movement. Even if those in the Tea Party don't understand everything the same way, they know something's wrong.
It ultimately comes back to the dysfunction of the current economy, the centralization, the inflation, joblessness, etc. Central banking and the Federal Reserve in the United States has got to be the greatest fraud of all time – the idea that a small group of chosen people can set the value of money for everyone else. They can't. All they can do is print and inflate/devalue. That's why more and more people understand they have to get out of paper money into gold and/or silver.
Daily Bell: Where do you think this is all headed, this awakening and what people are starting to do about it?
Ron Holland: Well, I'm probably more optimistic now than I have been in the past couple of decades. People have been asleep, but now, like Rip van Winkle, they're stretching and stirring.
They are beginning to "get it" now in a fundamental way, in the gut. The system today is a series of lies and illusions. Everything that comes out of the mouth of the power elite structure is a lie – especially here in America where the political, media and business establishment supply us with endless lies.
We're told this is a capitalist free market system. But because of central banking it's a command and control system. We're told to go get an education but what we receive from these institutions of higher learning is mind control – degrees in global warming and social diversity. Nonsensical stuff.
The mind manipulation needs to stop. The wealth-siphoning must cease. I think it will. I think there's going to be some kind of social explosion if it doesn't.
Daily Bell: Social discontent is definitely rising. That's not news anymore. You see it coming to the US as well?
Ron Holland: As I prepare to leave for the FreedomFest conference in Las Vegas, I am more optimistic about peaceful change, painful though it may be. I think what's going on is going to become massive and overwhelming. I don't think it can be stopped and my hope is that it will get so large so quickly that violence is not even going to be an option. The Internet Reformation is exactly that – a reformation of the systems of control and it doesn't have to be violent to happen.
Daily Bell: Well, even it's not violent it can be painful.
Ron Holland: Absolutely. People can lose everything in troubled times.
Daily Bell: Not just in America or Europe.
Ron Holland: You've run a number of articles on China and that's a key country. I tend to agree with you that it's a troubled situation over there now and that not enough people understand the stakes. If China collapses, the rest of the world economy gets hit with a chain reaction that'll hit harder than Tyson in his prime.
Daily Bell: They're at a critical stage now with their tightening. They're raised rates something like five times recently.
Ron Holland: There's obviously a criticality here. Food prices are continuing to go up fast from what I've read. I believe the price of pork has gone up something like 50 percent and the Chinese like their pork. Real estate is going up – even though China made it illegal even to buy apartments for a while as I recall.
In these situations, where you already have what is basically out-of-control price inflation, governments have no choice. They have to slow the economy, really put the brakes on. This isn't like other times for the Chinese economy … this is the real thing. They slowed down with everyone else in 2008, but the Chinese never slowed down all the way. They dumped something like one trillion dollars into the economy and they've been trying to wring it out ever since.
Daily Bell: You're correct in these instances; it's almost impossible for central bankers to get it right.
Ron Holland: They won't get it right. How can they? They got it wrong with the initial inflation and now they'll probably overshoot. They'll tighten so hard that they'll shove the economy into a real recession.
Daily Bell: That seems to be the choice. A significant slowdown or continued price rises. And those price rises are giving rise to considerable social unrest.
Ron Holland: As I said, China is the key. Europe has already collapsed and America is not rebounding either. As you guys have pointed out, the dollar reserve system is all but dead. China is propping up the world but China has significant – really important – economic problems. All the BRICS do. Certainly Brazil, even Russia and India have significant inflation. Though it's obviously most out-of-control in China.
Daily Bell: China is buying a lot of European debt. Wonder how long that will last. We did an article on it.
Ron Holland: With China it's not if … but when. And these days "when" is looking sooner rather than later.
Daily Bell: It's surely an important anchor for the world economy at this point. And if the economy goes down hill, what happens then?
Ron Holland: Well, as we know there's always war to distract the public and frame future historical accounts. There are lots of wars already and more on the way.
Daily Bell: We think there's a good chance of a real regional war blowing up in the Middle East – one that would involve Iran.
Ron Holland: In these sour economic times, the elites start wars. It's a fact of life. History teaches us that. Of course war puts an even greater stress on the economy.
Daily Bell: But people are so miserable they don't notice.
Ron Holland: War is a great distracter. A full-scale world war probably isn't feasible any longer because of the nuclear threat but you can certainly have a bad war in the Middle East. And it will probably have a continuing impact on oil prices.
Daily Bell: Yes, more price inflation. Europe and America on the ropes. China's not doing so well and the Western elites seem headed for war. What do you do in a scenario like this? There's really no safety net.
Ron Holland: Well, it's true – wealth protection is the name of the game at the moment. These are unusual times. I don't pretend to know where gold and silver are going in terms of purchasing power, but the trend seems well established and I'd continue to examine wealth protection options in both gold and silver.
I'd actually prefer gold for wealth protection and long-term savings, as that is its history, but also think everyone should have some silver too for situations in which a real crisis develops. I mean one in which no merchant will accept dollars because of some sort of hyperinflationary devaluation.
As far as other currencies, none are linked to gold that I am aware of and therefore they are all inflatable – including the Swiss franc. There are more than 100 central banks in the world all operating under the direction of the elite controlled Bank for International Settlements in Basel, Switzerland – a globalist institution for sure. And all of the central banks inflate – all of them! And that means holders of those debt instruments are losing purchasing power.
If you want to get out of harm's way, I think you must get out of US dollars and into gold – even at these prices. I don't see much of a retreat as a matter of fact, not with the world's economy in its current shape. These are big forces at work.
Daily Bell: So … physical gold, OK. But how about ETFs? Gold shares?
Ron Holland: Gold is only gold if you can touch it, under these conditions. Now I don't mean you have to physically touch it every day, but you must have the real thing and keep it out of reach from those who would try and take it from you. You know, many people still find it hard to believe that in 1933 FDR passed the Gold Confiscation Act making it, essentially, an illegal act for American's to own physical gold. And it stayed that way for 40 years!
Now that did happen in the United States and it happened when the confidence in the Federal Reserve and the overall economy was rapidly eroding during the Great Depression. So why would you think that the confiscation playbook wouldn't be trotted out again? What makes you think that the yellow metal won't be portrayed as a medium of use for illegal criminals, tax evaders, terrorists etc.?
I would hope the Internet Reformation will prove strong enough that people won't be easily swayed into believing the propaganda and "democratically" support another wave of theft. And although it would be much more difficult this time to pull off such a confiscation attempt, I would not put it past them to try.
Daily Bell: So definitely not ETFs?
Ron Holland: ETFs are not physical gold. They are securities. Gold shares are not physical gold either; they are investments that entail many risks. Only physical gold itself is desirable, in my opinion, when a person is trying to protect the purchasing power of their wealth. And the gains in purchasing power that have been witnessed over the past 7 or 8 years is rather impressive, to say the least.
Daily Bell: What is the best type of gold to buy? Where does one store it for safety, considering the argument that a potential gold confiscation looms ahead?
Ron Holland: I only recommend buying bullion. Not numismatics or any other "scarcity-sell." The cheapest form of bullion is gold bars. Coins carry additional costs. If you can afford it, transfer out of your devaluing paper money and into gold bars and acquire them with the least amount of fees involved.
With all fairness to US-based gold dealers, they have many costs associated with running their business. These costs add on to what you inevitably pay to acquire gold. However, even if you are able to acquire it for reasonable charge, you still are left owning it in the US and for me, right now, that is an unacceptable risk.
I recommend buying some gold for US storage where you can get your hands on it from reputable dealers here in the US. But for major investment diversification, consider an international specialist that handles both the buy and the sell and stores it for your account. In Switzerland, there are several providers of such services, but unfortunately either it is too burdensome for most to go there and open an account, or the minimums are too high.
Daily Bell: Switzerland's not an option?
Ron Holland: Besides the travel costs, most Swiss banks will no longer accept American clients at all after the pressure the US has brought on that country.
Daily Bell: it was significant for sure, and remains so.
Ron Holland: There is one group to consider. I follow a program called Global Gold. Frank Suess heads the firm, and he is a dear friend of mine and a member of the advisory board for the Foundation for the Advancement of Free-Market Thinking (FAFMT). Frank's team has developed this program with a full understanding of the issues American's face and why it is important to not only own gold but also own it in the right secure location.
Daily Bell: In Switzerland?
Ron Holland: Yes, Global Gold offers competitive rates, it is virtually commission free, and provides safe and secure storage of gold in a secure Swiss vault that is audited regularly by Ernst & Young. I think the Global Gold Program is definitely something for Americans to consider. The minimums, and this is important, are fairly low to participate – starting at US$50,000.
Daily Bell: That's very low.
Ron Holland: This sort of service, to reconstruct for the individual is expensive – if not impossible. It's a millionaire's type service. But by making it available, broadly instead of exclusively, we think we're offering a great service that people can take advantage of. What is most important, no matter how you do it, is that people get out of devaluing dollars and into honest money – Gold. And they should strongly consider the history of their government and its propensity to act in irrational and confiscatory ways. People think government is some sort of logical, rational power. It's not. People who go into government, more than most, are out simply for themselves. They're willing to put up with an unchallenging – even useless – job because of the security.
The idea that people with this mindset are going to "protect" society when things go wrong is ludicrous. These people are WHY things are going wrong in the first place. And you have to protect yourself from them. Doesn't matter what the form of government is – democracy, monarchy, communism … its all the same after a certain point. Human nature doesn't change. No one is going to protect your family but you if things get really bad.
Daily Bell: Speaking of governments, shouldn't Americans be concerned with the tax authorities coming after them if they participate in a program such as what you are describing? Switzerland isn't all that popular these days.
Ron Holland: Actually, because of the scrutiny Switzerland has received it's actually a lot lower on the radar screen than most places. A lot of offshore venues are coming in for considerable scrutiny now. Switzerland has already taken its shots.
Daily Bell: Certainly it has had a workout.
Ron Holland: The authorities have been over Switzerland with a fine-toothed comb. And this is a fully declared program. There is nothing illegal about Global Gold. Just file the appropriate reporting forms and pay your taxes just like you would in the US. The only difference between this program and buying the gold in the US – besides the costs of the purchase being lower with Global Gold – is that the metal is safely stored in Switzerland. But do your own due diligence.
Daily Bell: Any other recommendations?
Ron Holland: Yes, there is something else. I'm investigating it now and it has to do with South America, but I'm not prepared to talk about it. I have a few more trips to make down there.
Daily Bell: Is it investment oriented?
Ron Holland: Not really. It's an extension of this wealth protection idea. It has to do with family protection actually.
Daily Bell: Anymore hints?
Ron Holland: Not now. Only than to say it is not only important to have your wealth safely secured in jurisdictions that are welcoming, but also to have an option of similar character for you and your family physically as well.
Daily Bell: We'll have to have you back. Thanks for sitting down again and enjoy FreedomFest. Please say hi and congratulations to Mark Skousen and Tami Holland from The Daily Bell.
Ron Holland: I'll be pleased to come back.
Ron Holland does us the favor of reminding us once again of the bigger picture when it comes to the world's economy. For several years now we have heard that those in power knew what to do about the economic crisis affecting the West. There would "stimuli" and, later on, "austerity." There would be QE1 and QE2 – and in Europe there would be loans and then (unconstitutional) bailouts.
We've been barraged by numbers these past few years. Every uptick is a green shoot; every meeting of the G20 and the G7 provides us with yet more good news about ways the world's economy has "turned the corner." But really … it hasn't.
Fortunately, there is the Chinese Miracle. China is pulling the weight of the world right now, but as Ron Holland points out, China has its own problems. When a single food item rockets upward by 50 percent (pork) that counts as serious price inflation in our book. And of course, that's only one tiny example that is symptomatic of deeper problems.
It's just like the economies in the West: Every month or two we read about another measure that the Dear Leaders have taken to ensure that price inflation is damped. Each measure is accompanied by soothing reports that this time the measures will be effective before prices get out of control.
And what have the ChiComs proposed? We can't remember all of it. One that jumped out at us a few months ago was when China forbade the buying and selling of real estate, at last regionally. That seemed to us to be a pretty extreme action – the kind of Draconian price fixing regimes resort to when they are desperate – but it caused nary a ripple of concern in the Western press.
China, you see, is a very healthy economy. It is a "miracle." No, Ron has it right: China has big problems. Now they're raising rates significantly. Five times already, as a matter of fact. This is a big economy we're talking about – so here's the real miracle: It'll be one if they get it right and bring that country in for a smooth landing. Hyperinflation, or more likely … a "hard-landing."
China is already experiencing significant social unrest – not just here or there but across the country, which is just what we've been predicting these past few years. The ChiComs have at least two strikes against them (the starvations of the Great Leap Forward and the repression of Tiananmen Square) and if the economy sours severely, that will be strike three. Yer out.
Between the West's "failure to launch" and China's unstoppable price inflation, the world is in a difficult position. The BRICS generally have price inflation worries and the PIGS may back away from the trough, but in doing so there will only be more civil unrest.
The solution to all of this as we understand it is war. We've been predicting war – serial, elite wars – for years. Well, lo and behold, the US is now somehow involved in seven or more separate conflicts. There are reasons for each of these conflicts – spurious ones to be sure. But the nice thing about the War on Terror (which we think generally is a flawed elite promotion) is that it is like a portmanteau war. You can pack it up and carry it anywhere.
Yes, al-Qaeda can be dead or alive, depending on the domestic political situation (whether the US needs a victory or not) and it can mysteriously emerge wherever the US is best positioned to attack another impoverished country to keep the dollars flowing to the military-industrial complex and the Department of Homeland Security complex.
These are mighty wealth operations. Homeland Security has done to America what the military-industrial complex has done overseas – introduce a continued, destructive strain of authoritarianism to the larger populace. This can be carried out with bombs or body scanners. But the results are the same: repression, intimidation and growing chaos.
It may well be chaos that the elites want. Out of chaos … order. However, in this case, we don't see the order part happening anytime soon – and neither apparently does Ron Holland. Ron makes a proposal for keeping one's gold offshore and he may well be right about that.
Gold confiscation has happened before and we don't see the price (purchasing power) of gold or silver going down anytime, or not for another few years anyway. This business cycle has yet to turn. There's a limit to how much wealth in private hands the elites will likely tolerate. If chaos is to be implemented, people will have to starve in the dark.
Ron has another solution in mind as well for people worried about upcoming, potential, domestic chaos, but he's not suggested that one to us yet – though we are certainly interested to find out. We'll surely have him back.
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