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With no hidden fees and a 100% purchase guarantee, you can feel confident when you book your premium LA tickets with Sweet Hop. Visit Swithop.com today. Today on Radical Personal Finance, we're going to dig into the more radical side of life. We're going to talk about financial fraud in the mainstream financial systems, allegations by somebody who's been on the inside.
Also, we're going to talk about economic collapse, global war and tax protesting. If those are topics that sound interesting to you, you will enjoy today's show. If those are topics that sound weird to you, this will be a good show for you to skip. Welcome to the Radical Personal Finance podcast.
My name is Joshua Sheets and I'm your host. Thank you for being with me today. This is the show where we work hard to talk about all aspects of living a rich life today while building a plan for financial freedom in 10 years or less. One aspect of building that plan is having a sense of certainty and understanding about what's going on.
Today, we're going to challenge that sense of certainty just a little bit. My guest today is probably one of the most controversial figures, certainly one of the most strongly opinionated figures that I've ever had on this show. Her name is Anne Barnhart. I'll give a little bit of background on her in a minute.
I do sincerely mean this may be a show that some of you will want to skip, but it's also a show that some of you will thoroughly enjoy. I'm going to take just a couple minutes before I play the interview and share with you a little bit about my personal philosophy regarding show content and interviews and the reason why I sometimes dig into these types of subjects.
I've had a number of comments, recent comments, both public and private from people who have been offended by some of the content of Radical Personal Finance. My guest today is the type of guest who will generate many more such comments if I don't give a little bit of an intro here.
I just want to head those comments off at the past with a short discussion between you and me about my personal show philosophy and what I'm trying to do with Radical Personal Finance. There's a reason that this show is called Radical Personal Finance. I'm interested in unusual topics and unusual perspectives on life and money.
So I cover a lot of mainstream topics but I also cover non-mainstream topics from every perspective. And in today's show, we're going to talk about some very non-mainstream topics, economic collapse, global war, tax protesting with my guest who is openly predicting a complete and total economic collapse, a global religious and governmental war.
And again, she's an outspoken tax protester whose bank accounts have been stripped by the IRS. She is under continual levies from the IRS for her accounts and so she basically has to live on a cash existence. She's one of the most outspoken politically incorrect writers and commentators that I'm aware of.
Now, that's not a mainstream perspective. This is quite radical. But here's why I do it specifically with regard to the topics of financial topics like this. Usually what happens is when people have strong opinions about finance, they're relegated to a – either to a debate format or toward marginalization.
If you want to go on and – if you turn on CNBC, there's always somebody predicting the end of the world. Usually it's somebody predicting the end of the world versus somebody who's predicting everything is normal. Line them up for a five-minute back and forth debate and boom, we're going to try to figure out what is true.
Well, you can't figure that out in five minutes and often what happens is people don't have a serious discussion about the topic, about the research, about the perspectives that somebody has. And so I have learned from personal experience that many people are concerned about economic disaster scenarios. History is filled with times of economic disaster, both mild disaster and extensive disaster.
Many, many, many times I would be sitting in my office when I was a practicing financial advisor and people would kind of look furtively around and say, hey, I've been reading Jim Rickards or I've been looking at what Peter Schiff has to say or Jim Rogers or whoever their person is.
And they would be talking about how to handle – how do we integrate this information? And people often in modern society feel a little bit guilty about their interest in these things. And so what happens then is the conversations go to obscure message boards or obscure websites and oftentimes it's tough to get a fair hearing.
Now, I do not share – as you'll hear in today's opinion, I personally am not a doom and gloomer. I'm a pretty optimistic guy. But I think we should discuss rationally and try to talk about all different perspectives and always look to see where we are wrong. That should be one of our major goals is to look to see where are we wrong.
So my philosophy with regard to bringing guests on the show is to choose people that I think will have something interesting to say and then do my best to represent you by asking good questions, the kind of questions that I hope you will ask. I don't try to be intentionally provocative, but I also don't try to be intentionally reserved.
I don't see any reason to argue with a guest and beat them into the ground so that I can get the last word, nor do I see any reason not to challenge them on certain things or voice my own objections to the case that they're making. If you're looking for a never-ending stream of mainstream financial thought, broad-scale commentators, you should choose another podcast to listen to.
There are many good podcasts that stick with that kind of topic. At this point – I mean I could turn the show into that if I wanted to. At this point, I get about five or so prospective interviewee requests per week and I turn most of them down. Basically, they're boring and I'm not interested in my show becoming a place where people simply come as a component of their publicity tour to spout the same old, same old drivel.
Now, I love to help people publicize their work when I think the content is useful. You all, listeners of the show, are an amazing audience. For example, I've had recently Jake DeSilis on the show several times. Jake is not a mainstream, well-known author. He doesn't have 13 New York Times bestsellers.
He didn't ever even contact me and say, "Joshua, can I come on your show as a media tour?" But I think he has more useful content than most other people, than many other commentators. I think he actually has content that can help you, which is why I've had him on several times.
And so in his recent – recently, his most recent book, Job Free, I wanted to help him with his book publicity because I think it's an outstanding book. And we did help him. You guys are amazing. After his recent appearance on the show, he wrote me a note indicating that the average daily sales of his book had just about tripled based upon being on the show and all of you in the audience starting to buy his book.
I love to hear that. That's awesome. But I'm not selling my show's airtime for sale. Now, I always will tell you my opinion. When I believe something, I'll tell it to you clearly – as clearly and precisely as I'm able. And if I have a train of thought or a logical chain or personal experience that leads me to an opinion, I try to share it with you so that you understand how I arrived at my opinion.
If I don't communicate something clearly, it's not because I'm intending to conceal what I feel or what I believe. Rather, it's because of my own personal inability to communicate clearly. That's the only reason, because my intention is to communicate clearly and openly. I'll tell you why. Here's why it's actually important to me to do that and it's based entirely upon my own personal Christian worldview.
And in this example, Jesus is my example in this regard. Jesus Christ never kept things secret. He didn't do secret backdoor deals with the people in charge and that's one of the reasons why personally I despise the way that most politicians operate in our modern society. It's all an inside game based upon who can pay the most money and who can buy the influence that they need.
On the contrary, if you study history and scripture, you see Jesus always preached openly. In fact, scripture itself records in the book of John that he was – when he was hauled before the court of the high priest in his final days before being killed, he was questioned about what he taught and his answer was very simple.
He said, "I've spoken openly to the world. I've always taught in the synagogues and in the temple where all the Jews come together. I've said nothing in secret." So personally, I don't agree with the concept of secrecy about opinions and beliefs and things like that. I also – this is one of the other things that bugs people a little bit.
I also happen to believe that we should know the full accurate story whenever possible. That's also based on a biblical ethic. The Bible always presents people accurately demonstrating both their strengths and their flaws. Read the Bible. Sin and righteousness are both openly recorded in the lives of biblical figures.
So I try to communicate openly and accurately and as much as possible to present cases openly and honestly to the best of my opinion. So it's my intention to model the biblical pattern in the way that I communicate. Now, I'm sure I missed the mark at times. I have biases and blind spots.
We all do. But I do my best to acknowledge them as much as possible when I discover them and I do my best to openly disclose them to you when I'm aware of them. Obviously, there are things in life that are private. Some things are personal and should be kept private.
But in general, I don't try to beat around the bush with furtive secrecy in the way that it's often done in modern era. I try to disclose. Here's what I'm doing and why. That's important to me. Incidentally, I have other benefits of doing this. It gives an intellectual – number one, it's intellectually honest to share what you believe and why.
And it gives me the opportunity to learn because I'm certain that there are opinions that I express on this show that I'm wrong about. And the only way that I'll know and be able to identify the things that I'm wrong about is if I disclose them carefully, accurately, and then consider the rebutting arguments against them.
So I invite you at any point in time, whenever you disagree with me or you disagree with a guest, to come on the site. Feel free to make comments about why you disagree. I approve personally all of the comments on the site and I don't filter them based upon whether they're nice or not.
I do filter them mentally based upon whether you're arguing with the content matter or arguing with the person. And so I would encourage you, argue with the content matter. When I interview a guest, it's not my intention to be objective or impartial. I'm not a news person. Personally, I have an opinion and I'm trying to have a discussion with the guest to learn something for myself.
Now, if you want an objective so-called or somebody who portrays themselves as being impartial, I recommend a news show. Go listen to, I don't know, Marketplace or Marketplace Money. They do a great job with those types of shows. That's not radical personal finance. But even though I tell you my opinions, I don't think I need to always do it in the context of an interview.
So if I don't pursue a line of questioning, please don't assume that I'm simply agreeing with a guest. I have my own opinions, which I will share with you clearly in other shows. I don't have any reason to argue with my guests. Finance is tough. It's complicated. And it's very, very difficult to sort through all of the conflicting data.
In episode one of this podcast, the very original episode, I laid out my vision for what I'm trying to do. And I have precisely the same vision today. I'm trying to create the type of show that I always wished existed. And I've always, always frustrated with financial conversation, especially when you get into complex or controversial topics because of the way that they're discussed.
Just an argument is not based upon what somebody is actually saying but upon their opinions or just short-circuiting arguments. So for me, I'm trying to understand why somebody got to a perspective or opinion or how they got there. I have thought seriously about avoiding this type of content on the show because I think in some ways it hurts me with regard to ratings and being able to grow the show.
It puts the show in a different category than mainstream stuff. It makes it harder for people to recommend. But I believe it's important. And it's part of – one of the reasons it's so important is part of us exercising and benefiting from the use of our free speech. We live in one of the greatest times to be alive in the history of the world partly because of the liberty that we can enjoy and we can appreciate, especially the freedom of speech.
It's very important to me that all of us recognize that and we utilize that. Now, freedom of speech, I fully support your right to exercise your freedom of speech even when I don't agree with it and when I dislike it. I also fully support your exercise of your right to choose what you want to talk about, which is why there's a little button and an arrow on the – forward on your phone or whatever – however you're listening to me and you can always skip an episode.
And I encourage you to do that. If I'm not creating content that's useful to you, at that point in time, you should skip it. You've got a short life. I'm very conscious of that and I try to take that time carefully. But at least for me, I believe that our use of modern media, it's very important that we learn how to use it and that we use it to present and consume and consider ideas that may be challenging to us.
In interpersonal communication, you and me sitting down talking together, we generally are going to be – at least I'm going to be generally fairly reserved. I'm not going to tell you what to think. I'm not going to pry into your life. I'm going to have that normal interaction of respect between two people.
But in media, I don't know who you are who are listening. I'm just trying to present ideas that you'll find to be useful and you should be looking to challenge your thinking with the ideas that are there and you should be thinking and listening critically to everything that I say and everything that a guest says.
Thinking critically about what they're saying and why. That's the key. We need to utilize the access and the tools that we have in our modern society more than we are. But we also need to develop with it our concomitant ability to sort and filter through the ideas. You are an adult.
You are responsible for your life. You're responsible for your actions. You're responsible for your money. So take that charge seriously. Take content like today's show, filter it through your own life, and act responsibly based upon your goals, your perspectives, and your resources. So with that little introduction, if you enjoy challenging, provocative political conversation, if you enjoy these topics, then here is an interview with Ms.
Anne Barnhart. And welcome to Radical Personal Finance. Anne Barnhart: Thank you, sir. Thank you for having me. I've been looking forward to talking with you because you play something of a role in some back history that I have, specifically with regard to a letter that you published that became very famous a few years ago following the collapse of MF Global.
At that time, I was actually working as a professional financial advisor and so had many clients asking me about the events. And it was making quite the rounds in the media and the alternative media. And your letter was quite famous. So it's pretty cool to be able to talk to the author of the letter.
Oh, well, thank you. I'd love for you to share a little bit about your business story, specifically the type of work that you were doing that you spent many years in business and how that led into your publishing the famous letter that I'm referring to. Sure, absolutely. One of the main misconceptions about me that I'm always very keen to correct is the notion that I was a money manager or a hedge fund.
That is absolutely incorrect. I was a classic old school commercial hedge broker. What the futures markets were actually established purely to do, and that is to provide a forward delivery mechanism, a highly liquid forward delivery mechanism for actual producers of cattle and grain. My clients, excuse me, my specialty was primarily cattle.
Cattle was my main area expertise. But whenever you're a commercial hedge broker for cattle, you're also inevitably going to be trading grain. So I traded a tremendous amount of corn and then also wheat and beans. But understand what I was doing was my clients were not speculating on just price movements in the commodities markets.
My clients actually were ranchers and farmers who had these commodities and were laying them off on the board as a risk management tool. So that's what I was. I was not a money manager. I was not a hedge fund. That word hedge has been so profoundly corrupted in the financial world in the last 15 years with the advent of these so-called hedge funds, which are nothing of the sort.
But that's what I did. I was cattle and grain, old school. I did almost all of my business in Chicago. And for those of your clients who have ever watched movies or seen on TV trading places, for example, is one of the more famous movies where they're there in Chicago and they're there at the board of trade or the mercantile and the guys are in the pit screaming and yelling.
I was the person who was on the other side of the telephone that those guys were all holding and screaming into. That's what I was. I was out of Denver. All my clients were in the central US and I was brokering the business in Chicago. I never traded proprietorially for myself personally or for my brokerage firm ever.
I've never held a commodities position for my own benefit in my life. I was a pure hedge broker. And so what happened? MF Global happened. And John Corzine happened and he stole $1.6 billion of sacrosanct, segregated, protected, the most protected money in the world was money that was sitting in these futures accounts, in these protected accounts.
John Corzine did not steal money from people who had "invested" in MF Global. These people were not invested in MF Global. MF Global was providing the service of clearing these people's trades and every cent that was sitting in an MF Global account that John Corzine stole was 100% the property of the depositor.
He just robbed these people blind and what the straw that broke the camel's back for me in the week after this all unfolded was the fact, first of all, that the Mercantile Exchange, the Securities and Exchange Commission, the CFTC, the federal government, and the judiciary, all of them, every single one of those entities was fully complicit in facilitating the theft.
Their actions specifically allowed the theft to perpetuate and not be instantaneously corrected as had been the case since the advent of these exchanges in these markets. The purpose of the Chicago Mercantile Exchange, the Chicago Board of Trade, the purpose of these exchanges specifically was to stand as the central counterparty so that no individual trader ever had to worry about the credit worthiness of who was on the other side and likewise never ever had to worry about what would happen if a firm failed.
Because the exchange itself, its entire purpose is to stand as the universal counterparty to all of these transactions. What happened when John Corzine stole the $1.6 billion is the Mercantile Exchange, and it was under the Mercantile Exchange auspices. They were the entity that had the auditing oversight of MF Global and so forth.
It was the job of the Mercantile Exchange to step in. At the time, they had an emergency slush fund of over $8 billion with a B, $8 billion. Corzine's theft was $1.6 billion. The Mercantile Exchange could have not only covered the totality of the MF Global theft, made all of the accounts whole, and then taken custody basically of the company and sold off the company as they had done before.
They had done this before numerous times with other significant firm failures. The previous one was Refco. Refco was the progenitor to MF Global. MF Global arose out of the ashes of Refco, which was a wildly corrupt organization as well. The Chicago Mercantile Exchange could have backstopped the entirety of the MF Global theft instantaneously three times over.
Instead, what the Mercantile Exchange did was jaw-dropping. It was stunning. Not only did they not fulfill their fiduciary and basically their existential purpose in backstopping the failure of this firm, they locked the customers out of their accounts. They maintained the positions. All of these MF Global customers have had all of the free cash in their accounts stolen, but they still have all of the positions on the books.
Then the Mercantile Exchange does not allow the customers to even liquidate. I have contacts, people who are not doing business with me, but who I have lots and lots of contacts in the cattle business. I have people calling me, some of them desperately trying to get an account open with me because I cleared through another firm.
I cleared at the time through a firm which also failed a few months later called Penson. I had people trying to call and get an account open with me as soon as possible because they're saying, "Ann, they stole all my money. They called me and told me I have a margin call against all of my positions because all of the cash in my account is now gone." For some of these people, it's well into the hundreds of thousands of dollars.
They won't let me liquidate. I had one person, I had one guy, a contact that I'd had for years and years. He had an MF Global account. He had sold his cattle out of the feed yard the business day after the MF Global collapse. He calls his MF Global broker.
First of all, he knows that his account has been swept, but he says, "Look, I sold the cattle. I have to get out of the hedge. I have to cover the hedge." Because he was short the board. In this interim, when these people are being told, "No, the exchange won't even let you liquidate your position." They've sold the cattle and now the market is going up and moving against them.
It's generating even more margin call. I don't know if your listeners can ever properly comprehend the nefariousness of this. To not allow someone to even get out of their position, this is completely unprecedented. It went on for a week. It was a week where these people were completely unable to get out of their position.
That's why they were calling me, desperately trying to get accounts open as quickly as possible, so that they could put on an offsetting position in another commodity house. So they could at least stop the bleeding and lock in the damage. So that they wouldn't just be completely destroyed in the profit margin on the set of cattle, specifically the ones that had already been sold to a packing plant.
What happened with MF Global, the aftermath of that, the bankruptcy filing, where the bankruptcy court, specifically, and with the cooperation of the Chicago Mercantile Exchange, specifically allowed the bankruptcy to be fraudulently filed as the bankruptcy of a securities firm, and not of a commodities firm. The ramifications of that were, of course, the fact that if you file a bankruptcy as a securities firm, then the counterparties on the proprietary house trades of the firm become first in line in the bankruptcy proceeding.
Whereas, if it had been properly filed as a commodities firm, which MF Global was a straight-up commodities firm. I believe at the time they had over 40,000 commodity accounts, and they had less than 400 securities accounts. MF Global was the largest boutique commodities firm in the US. There's no debating this.
If the bankruptcy had been properly filed as a commodities firm, the customers obviously go to the front of the line in bankruptcy proceedings. It didn't take long for me to realize what was going on. I started to hear rumors of clawbacks, meaning that people who had just organically had money wired home to them in the previous, let's say, 30 days before the implosion of the firm happened, could potentially have the bankruptcy court claw that money back.
Now, thank goodness that never came to be. Thank goodness. But what did happen, and what a lot of people don't realize, because there's been a lot of reportage that, "Okay, the MF Global situation has now, X number of years later, finally been completely rectified, and all claims have been paid out." Here's the rest of the story that you don't hear.
A lot of those customers were agricultural operations. A lot of them were not terribly large agricultural corporations. They kept the lion's share of their operating capital, and they kept the lion's share of operating loans sitting in their commodity account. Here's the cruel twist in all of this. The reason they kept that cash sitting in the commodity account is because, up until MF Global, that was by far the safest place to keep it.
If you have in the high six figures or into the seven or eight figures that you need as an agricultural entity, that you need to have liquid and around you, the bank, obviously, FDIC protection only goes to, depending on the time, 100,000 or a quarter million. Keeping large amounts, millions and millions of dollars in cash, just sitting in a bank, probably, to their minds, wasn't the safest place.
What they thought they had with their commodity accounts was full, 100% instantaneous protection. A lot of people kept a lot of money in these commodity accounts, meaning relative to them, relative to their total operating capital or to their total available line of credit. What these people had to do is because they were so crunched, and they were when they just had everything stolen from them.
People emerged pretty quickly, and what I refer to as recovery sharks, who came out and said, "Look, we'll pay you anywhere from 25 to the highest I ever heard was 40 cents on the dollar for your claim. I'll give you 40 cents on the dollar on your claim right now, but then you surrender the total amount of your claim to me, and if four or five years from now, all this money is returned, then I'm essentially buying that claim from you." These people were so desperate and so cash-strapped, and were facing instantaneous bankruptcy and personal failure, that they had to sell out at a maximum of 40 cents on the dollar to these recovery sharks.
That's the part of the MF Global story that no one ever hears. In terms of me personally, I saw within days that the entire paradigm was destroyed by what happened with MF Global. I looked at my book at the time, which was a little north of, just a liquidating value, not a notional value by any means, but just the cash on hand in my personal office, which was just me.
I was a one-man shop, which was just north of $3 million. There's no way I can personally guarantee that. There's absolutely no way I can personally guarantee that. If what happened at MF Global had happened to my customers through the firm that I chose to clear with, I can tell you that I would have felt that it was personally, morally incumbent upon me to make good for my clients, voluntarily, because that's just common morality and common decency, and that's how decent people do business.
I knew that I could no longer, I could not personally backstop my customer book. I could not personally guarantee my customers' funds. Therefore, the entire paradigm has to go. What I did was, instead of selling my customer book, which I could have done, I could have taken my, at the time I had north of 300 open accounts, which was worth a lot of money, and there was a lot of goodwill there.
I could have sold that book to another broker and snuck out the back door. I did not do that, because that would have been immoral as well. What I did was I went down the line, and I systematically called every one of my clients and said, "I personally cannot continue anymore as a commodity broker.
This MF Global thing has destroyed everything. Your money is not safe. The futures markets are not safe. I recommend that you liquidate everything, and I send you all your money." Every single one of my clients, to a man, agreed with my assessment of the situation and happily executed the liquidation.
It took me two days to liquidate my office, and I did it, and I shut it down, and I told the National Futures Association, which is a completely corrupt organization, a massively, massively, criminally corrupt organization, which is the self-regulating body of the futures industry, and who is also completely complicit in all of this MF Global nonsense and all of the other firm failures that have gone on in the past eight years.
The NFA, the National Futures Association, is criminally complicit in all of these things, but you have to be licensed through them. I called them, and I said, "I withdraw myself. I withdraw my registration. Get me out of here." It was done on the 30th of November, I think, and that was it.
I want to bring things current, because that move that you made, you published a public letter, and that was in 2011. One paragraph from that letter, "To the very unpleasant crux of the matter, the futures and options markets are no longer viable. It is my recommendation that all customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity.
The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism." Here we are five years later, 2016. I haven't heard a lot of noise. Were you wrong? No, not at all. What has happened is that there aren't any human beings in the market anymore.
These markets, these commodity markets, they're all electronic trading, and they are being driven in these completely false, phony, synthetic ways. The equities markets, it's just comedy. You look at the fundamental data of what's going on in the world and in the economy, and you look at the equities markets and the bond markets, it's just a complete farce.
Also, speaking about me personally and my markets, the cattle markets, I thank God every day that this happened. I don't know if your listeners follow the price of cattle. Surely you must because you must be buying beef in the grocery store. The price of cattle just went through the roof.
I mean, doubled. It doubled. Remember what I was? I was a commercial hedge broker. All of my clients are long cash cattle. They own physical, actual cattle standing in fields and standing in feedlots. All of the positions that they would have been carrying with me as a hedge would have been short that cattle market.
All I can say is thank God that I wasn't there and I wasn't complicit in pretty much destroying these people being able to ride the wave of inflation. The only way that you can ride a wave of inflation is obviously if you have the top side open. If you look at this situation, you look at how much money Obama was printing and continues to print, you knew that there had to be some really intense commodity price inflation coming.
The price of cattle almost doubled in the space of, good grief, less than two years, I think. For guys who were straight hedged, who were short the futures on that, that would have just destroyed them. They would have not reaped any of the benefits or the effective protection of having their money, having their assets allocated into this valuable physical food commodity, which is inflating as all of this money is being printed.
There was also a relatively tight supply, but don't believe the propaganda. The supply tightness in terms of cattle numbers and pounds of beef produced was nowhere even remotely close to being sufficient to justify a doubling of the price of cattle in less than two years. This was driven by inflation and also these markets are being driven synthetically by nefarious entities outside of the markets.
The equities markets are being driven by nefarious entities. The fact that central banks not only are able to trade these markets, but if you go on the Chicago Mercantile website, they have a special page where they proudly boast that central banks get this and such reduced margin rate on their positions.
This is completely insane. A central bank is by definition a bank which can print its own money. If you're a business entity and you have the ability to print your own money, that means that you can print money in order to meet margin calls, which means there's absolutely no way that you can be forced or squeezed out of via physical delivery or cash settlement of any position.
Do you see what I'm saying? If you have a counterparty on one side of these trades who never, ever, ever has to get out of his position because he can literally print his own money to meet his margin calls, at that point these markets are a complete and total farce.
Anecdotally, from what I can tell you in terms of these agricultural commodities, there's very few human beings and actual trades left going on in these markets. It's all these trading algorithms and it's phony as a $3 bill, and most of the guys don't want anything to do with it anymore.
If they do, they're just using options and buy a cheap put and hold your breath just because your banker is insisting that you do it. I'm sure that you have a lot of listeners who trade metals. Don't even get me started on the absolute farce that the metals markets have been for how many years now.
It's a complete joke. The silver debacle in May of '11 or May of '10, I think it was May of '11, that silver market debacle, at that point you knew the metals markets were a complete farce as well. But what evidence would you present to back up that claim?
Because in my mind, simply having an algorithm and a computer program doing trading, that doesn't necessarily indicate that there's not somebody behind it. It doesn't necessarily indicate that somebody hasn't programmed it to do what they want. Can you share more evidence and more justification for your claims? Well, I'm a big, big fan of the work that Nanex has done, which is reported often on Zero Hedge, who are reporting and showing the sheer volume and the volatility that these--and just the abject insanity of--and the illegality of these algorithms placing orders into the market that are then canceled milliseconds later.
That's a crime. That is a statutory crime. If I had done that, if I as a commercial hedge broker had been picking up my phone, calling down to the floor of the mercantile exchange, and placing a bid on a contract on the spot month cattle futures, you know, buy 400 loads of June fat cattle at this and such price, and then cancel that order 20 seconds later or a minute later, and I just kept doing that and doing that, I would have been under investigation and tossed out on my ear within a matter of days, literally within a matter of days.
I can't tolerate--when we were calling orders in on the phone, that kind of stuff would never, ever behave. You were--obviously, if you were doing that, what you were trying to do is you were trying to manipulate the market by putting these bids and offers in on big size that you had no intention of ever executing.
It is a crime to enter an order into these markets that you have no intention of filling. These algorithms, that's all they do. That's all they do. They're just placing these massive bids and offers surrounding both sides, and, you know, it's a complete farce. So I used to, I used to, when this first came out, I used to say the computer trading, that's great because in the agricultural commodities, it was increasing liquidity.
You could get market orders filled much faster and much better at the very, very, very beginning of these computer trading deals. Then it just, it took over everything, like cancer. And now it's to the point where they don't even have open outcry anymore. It's very sad. All my friends who I used to do business with on the floor of the Chicago Mercantile Exchange, the Chicago Board of Trade, that whole paradigm no longer exists.
I think it was, you know, time is all running together now, but I think it was last year when they finally shut all of the floors down. And that doesn't exist anymore. Everything is electronic. Everything's on servers. Everything is geared towards these algorithms. And then you see the kinds of exchange fees that these algorithms are generating for the exchange.
And all of the, all of my friends and all the old timers who worked in Chicago will tell you the same thing. Everything went to hell in Chicago when the exchanges became for-profit entities instead of not-for-profit entities. And, you know, usually for most of us, we're saying, oh, we're very much in favor of for-profit entities.
Unfortunately, one of the paradigms in which that does not work is with these exchanges. And so after the war, when we are rebuilding the financial infrastructure, one of the things that we're going to have to go back to is all of these exchanges are going to have to be not-for-profit entities.
Because as soon as it became for-profit, you know, the well-being of the customer, the integrity of the markets, that all just went completely to the wayside. And everything became about generating execution fees using these algorithms, these trading algorithms, which are in and out of the market in massive size, just generating fees and fees and fees and fees and fees, driving the profit of the exchanges.
That's no good. That's going to have to be fixed after the war. So I want to ask a question about how your opinions relate to the average American. But you just dropped a very provocative statement. You said after the war. Is that a future-looking statement that you're making, or are you talking about some previous event?
No. What do you mean by after the war? There is going to be an enormous global war, and it is absolutely unavoidable at this point. I don't know if it's going to start next week. I don't know if it's going to start 10 years from now. I don't know when it's going to start.
But I know for an absolute metaphysical certainty that the global situation, the combination of the financial situation, the combination of the situation vis-à-vis the Islamic world and the reformation of the caliphate, and just the general cultural situation in the Western post-Christian world, there is without any doubt going to be a massive world war.
There's going to be a, and it's going to be something completely unprecedented, because it will be civil wars going on within each discrete nation, and also nations at war with each other. It is terrifying to see the global situation degrading the way it is, and just this pall of terrifying certainty of what we are heading towards, and the fact that so many people are utterly oblivious to it, and when it comes, we'll almost certainly be killed in it.
You're a fun guest at dinner parties, aren't you? No kidding. No kidding. So obviously that statement takes our conversation to a whole different level. My question was going to be with regard to the mainstream average person. The reason I brought you on is there are lots of people who have very strong opinions about the mirage of the financial markets, about uncertainty, about just many, many perspectives, the mainstream approach and then the conspiracy approach of everything is a sham and here are the problems.
But there are not many people who put their money where their mouth is. But you've put your money where your mouth is with regard to closing your firm, with regard to some of the other decisions that you've taken since then. And so that was why I was interested to talk to you.
But at this point in time, setting aside the concept of a coming global war temporarily, at this point in time, to be clear, you don't have any confidence in the normal functioning of the major financial markets. Is that accurate? Absolutely not. That is completely accurate. And from the time that I closed the firm and now orders of magnitude more strongly, I advocate all people to get out of the financial system as much as you possibly, possibly can.
Pay off debt if you possibly can. Get out of the banks. Only keep, you know, hand to mouth minimal amounts of money in banks just enough so that you can pay your bills and continue to live as things are right now. And you should, people should absolutely be stockpiling food, guns, ammunition.
And I'm not a metals bug by any means. But when you have a global war situation and a catastrophic financial collapse, yes, I am in favor of allocating into metals because, and this is not conspiracy, this is mathematics. The entire global financial system is a mathematical impossibility. It is a lie.
It is a sham. And it will, it will implode because mathematics is objective reality. It cannot be escaped. And we are, we are not going to get out of this. There's not going to be a soft landing. There's going to be a catastrophic collapse. I cannot tell you when, but you need to get prepared.
And if you wait until the collapse has already started to happen, it will be too late. You're not going to be able to buy food. You're not going to be able to stockpile anything. Do it now. And also, you know, the most precious metal, according to me right now, is, is lead.
No question. Buy guns, buy ammunition. They're, they're making moves, obviously, in Washington, D.C. They're desperate. They're desperate to get, get the guns. Do not ever allow anyone to disarm you, no matter what. Do not permit yourself to be disarmed. So the process of, of changing your perspective, and here's why I thought it would be such an interesting conversation.
When I read your letter, I was at that time a practicing financial advisor. And I, I am, I consider myself an independent free thinker, as much as any of us is possible to be. I was at that time engaged in a mainstream financial advisory capacity. And I read the letter, and I asked myself, "Well, wait a second.
So here's somebody who has closed their firm, and is saying, with inside knowledge that I don't have." I'd been in the financial business for about three years at that time. With inside knowledge, they're saying there is corruption. Well, I, I see a lot of corruption. I am not close enough to the people that are making the markets, and I'm not close enough to the, the inside track to have any inside knowledge.
But I certainly see plenty of evidence of, of, of corruption in, in our modern economy. But it's very difficult to swallow the, it's very difficult to swallow, because of, because of the bias that we have of saying, "Well, if I were to," so for example, "If I were to accept your statement that I read in that letter as true, that would have made, brought to me major issues, as it would make me." Wow, imagine that, huh?
Yeah. Consequences flowing from our adult decisions. Wow. Right, right. So. Getting your butt kicked by reality. Wow. So to have. Yeah, it's, it, it, it almost requires virility and manliness to face up to these things, instead of being effeminate, denying that the problems exist, denying objective reality, burying your head in the sand, and using normalcy bias in order to coddle yourself into believing that you don't actually need to do anything.
Wow, I've never heard this before. I've never even contemplated these concepts. Go ahead, continue, I'm fascinated by it. Right. So, so you, you, you've, you've almost finished the question. So since that time, for different reasons, I've since extracted myself from the financial advisory business, and I have no personal interest or stake in the, in, in the question.
I, I, I don't advise clients, I don't manage money, I don't own any public-traded securities, I don't have any open trading positions of any kind at the moment. So, so now I find myself sitting here and saying, "Okay, I don't quite have the same in, in inherent normalcy biases, biases that I once had." It's not quite the same total disruption in my life where I'm, I'm tempted to, I'm tempted just to say, bury my head in the, bury my head in the sand, say, "Well, I can't accept that fact." And I often find myself in this position of, of trying to sort through strong claims and figure out, "Could, is this true?
Could this be true? What if it is true? What if it's not true?" Et cetera. So my question specifically is, you now have these very strong extreme opinions compared to the mainstream. Did you come to them slowly over time and did you have to go through that process? Or is this just a, a long-held belief system that you have?
In retrospect, I think for me, in terms of the financial system, I'm gonna say it was a year to 18 months of realizing how, uh, no, I know exactly when it was. It was in the fall of 2009. So that would be two years. I, I still kept going with the brokerage for two years after I really came to the realization of, of how intensely corrupt.
But what for me, just beyond the personal moral corruption that was present in the industry, and don't get me wrong, I wasn't a Pollyanna. In fact, the reason why I got into the commodities business and wanted to be a commodity broker, even when I was, uh, you know, a late teenager, I, I went to college.
I went to Kansas State University, majored in animal husbandry and agricultural economics. And I, I had been a ballet dancer before that. So when I was telling people, "Oh yeah, I'm going to Manhattan," they thought they, a lot of people thought I meant I was going to Manhattan, New York to be a ballet dancer.
And when I said, "No, I'm going to Manhattan, Kansas. I'm going to K-State and I'm going to study animal husbandry and agricultural economics," their jaw would just drop. And then, and people, if, if they ever, if they pursued it and asked me why I was doing that, I would tell them because, you know, I'm tired of being poor and I, and I want to make money.
And I, I realized that that was something that I could do, that I would, I would enjoy. It would be very personally challenging. And also I knew from, because I grew up outside of Kansas City and, um, there was farming and agriculture, um, in my family. My parents were divorced, but there, there was a farm.
I didn't spend a lot of time on the farm, but I had, you know, knowledge of and engagement and involvement with agriculture. And I knew that there was a vacuum in the commodities brokerage paradigm in that business for people of integrity. And I said, "You know, I could do that.
I could, I could be a person of integrity, a commodity broker, or a good trustworthy person that, you know, these farmers and ranchers could use." And that, that was my business model. That's what I set up to do. Um, and I like to think that I did that. Um, but, um, I'm sorry, where were we going?
You were, you were talking about the transition, uh, confronting your own normalcy bias and when you, when you realized that you had to make different decisions. Yes. Okay. So have you watched my, um, video presentation on YouTube about economics and derivatives and all of that? No, ma'am. Okay. You really should watch that and all of your listeners should too.
And I'm not just tooting my own horn. The part in that presentation that I covered that is completely terrifying is the situation with regards to derivatives exposure by these mega banks. The top five banks in the United States, and I think the new numbers just came out, but even in the, in the video presentation that I have that was produced in, um, November of '12, I believe.
The top five banks in the United States alone have derivatives exposure approaching $300 trillion. $300 trillion. Five banks. They're, most of these banks relative to their assets have derivatives exposure and are levered up in derivatives at a ratio of about 50 to 1. Top five banks in the United States, $300 trillion in derivatives exposure.
The GDP of the United States is only something like $16, $16.5 trillion. The GDP of course being the sum of every good and service produced in a year in the United States. Think about that. That's only $16, $16.5 trillion. Top five banks have $300 trillion in derivatives exposure. It's thought that global derivatives exposure might be as high as $1.5 quadrillion.
Okay, these, these quantities of money are, they're fictitious. They're a fiction. This is, we're into, we're into numbers that are so enormous that they, they can't even be contemplated by the human mind. And what I opened my economics presentation with is monetary theory and an explanation of really and truly what money is.
Money is a fungible proxy for man's capacity to labor, produce and create through time. So there are a lot of gold bugs out there who say, "Oh, all of our problems would be solved if we just go back on the gold standard." Well, this is abject nonsense because metals, gold, silver, whatever, these are fiat currencies as well because we take these, let's take gold.
We take this beautiful, shiny, warm metal that does not rust or corrode. And we as human beings have said, "Let that be money, fiat. Let that be money. Let that be the fungible proxy for our ability as human beings to labor, produce and create." And so one of, I think, one of the essays that I've written that I'm the most proud of is a, is an essay called "We Are the Gold." Human beings, human life, that is what is behind and is backstopping all money because it is a fungible proxy for human life.
Okay? So when you're talking about governments, banks, these firms and institutions and governments, just ramping up this, this derivatives exposure and this massive debt, understand what they're leveraging. They're leveraging human lives. And now in this incredibly Machiavellian paradigm, they've exhausted the entire populace that is now alive. I mean, given these quantities of money, if you assign an average wage value to every human being on the planet, there isn't remotely, remotely enough to cover all of this.
In fact, if you take all of the land mass on Earth plus the working life and that valuation of every human being on Earth, there isn't enough collateral on this planet to cover all of this debt and all of this derivatives exposure. So what they have done, this very Machiavellian scheme, is they've now realized that what they can do is they can reach out into the fourth dimension.
And what they are doing is they are leveraging the lives of human beings who do not yet even exist and will not exist now at this point for centuries. They've reached out centuries into the future and leveraged the lives of all of these human beings to service their, their diabolical, their diabolical theft and looting of this planet.
Go ahead. Question on derivatives. I want to ask a question on the derivatives and then I want to make sure that we keep some time available for talking about tax protesting. But on the derivatives, here's what I don't understand. Here's my rebuttal and it's a sincere question. A derivatives contract, as I understand it, being a simple definition, is a financial contract that – of which the value is derived from the price movement of another asset.
So we're not talking – an underlying asset. So we're not talking about a piece of land. We're talking about a contract that has terms of settlement that are based upon the fluctuations in value or other agreement of a piece of land. So recognizing that a derivatives contract is a separate contract, an outside standalone contract that's simply going to be settled based upon the basis of something else.
Why is it a problem for there to be a massive amount of derivatives? Because if you – number one, don't some of those numbers that are calculated in the value of the numbers you stated, aren't some of those contracts simply counterparty contracts canceling each other out? And number two, if you have a fluctuation – let's say that the contract – let's say that the contracts cannot be – can't be settled because the counterparties in the contract don't have the money to settle them.
Then why is that this massive problem that you are predicting? Why can't we simply go through a bankruptcy process, the – you're left in the hole where the counterparty has dropped the ball and the person who made the contract is left without being able to receive the funds. Why is it by definition – why are big numbers a problem when they can just simply be settled and cleared through a bankruptcy?
Oh, naughty boy. You should have watched my economics presentation because I covered this. But I can cover it very briefly. First of all, when a counterparty fails to settle on one of these, the effects of that are cascading. So if, for example, a grain elevator gets shafted in a corn contract or a wheat futures contract and gets completely stiffed by their counterparty and the exchange does not or cannot make good on the contract, then that elevator goes into bankruptcy.
It can't pay any of its bills. You know, it just cascades wildly throughout the system. However, let's go back to the numbers. Let's just go back to the sheer size of this. I'll concede your argument about offsetting. I'll totally concede that argument. Let's say that we have $300 trillion in derivatives exposure and let's give that a 90% haircut.
We give it a 90% haircut. We say there's a symmetrical collapse and 90% of these contracts offset each other. No harm, no foul. What are we still left with after we've given $300 trillion a 90% haircut? Come on, American, can you do math in your head? $30 trillion. $30 trillion.
I'll take it even further. Let's give it a 99% haircut. What does that leave you with? Now you're stretching my math skills, Anne. It's $3 trillion. Okay, remember what I said. The GDP, the sum of every good and service in the United States in one year. Every job everyone holds, everything that is produced in the United States.
That is $16, $16.5 trillion. If you give the derivatives exposure of the top five banks in the United States a 99% haircut and assume 99% symmetry in the collapse of the derivative system, you are still looking at these banks just being completely out $3 trillion. That is the problem.
That is the problem. It is the sheer enormity of this paradigm that these psychopaths have pushed this and pushed this and pushed this until we are completely into the realm of mathematical impossibility. These things at this point are so large, they cannot be walked back. It would be easier at this point to count the number of drops of water in the ocean than it would be to unwind this system without there being massive damage to somebody somewhere, which would then inevitably cascade all around the world.
Another thing that has happened is these psychopaths have intentionally linked all of the global economies together. They are all incestuously, inextricably intertwined such that if X entity over here fails, the entire thing goes down. I am convinced that is one of the reasons why this thing just keeps going and going and going.
Because really and truly, there really isn't an entity at this point even today who can stand completely outside of it and say, "We are building this effective wall around ourselves." The global financial system is so incestuous that when this collapse happens, it will suck everyone and everything into it like a black hole.
It will just be a gaping maw, a singularity from which light itself cannot even escape. So one more question to cover the war topic. I grant your point and let's say that I concede your argument that the derivatives market and other influences will lead to massive economic disruption. Why does that in your logic lead to global violence and the concept that you presented of a global war?
Oh, sweetheart, that is such a question that is so... I was having this conversation just an hour ago with a friend about the incapacity for modern Western man to realize that civilization in and of itself is frankly a pretty precarious thing that can totally go away in the blink of an eye.
We have such a profound arrogance in our culture thinking that we are too big to fail, that these paradigms and these technologies that we have built around ourselves, not only are they strong and they can never be destroyed, but not even realizing what a tenuous web that they are.
They could just be blown away. You turn off the internet at this point. You turn off the internet at this point and people would be eating each other Lord of the flies style within a matter of weeks in North America. We are so dependent upon these structures and so utterly incapable of providing for ourselves in any way.
What happens if the petroleum stops flowing? What happens if petroleum stops being refined? What happens if there is no longer electricity? How are you going to feed these people? How are you going to move food into these urban environments where these people cannot feed themselves on any level? What happens when these people run out of food in any meaningful way?
What happens when there is no longer fresh water? What happens when this drug dependent society can no longer get its drugs anymore? What happens to all the diabetics when there is no more insulin moving because there is no more commerce, because there is no more petroleum, because nothing can be transported anywhere?
What happens when the inner city culture is turned loose, when they know that there is no rule of law, when they know that they outnumber the police by orders of magnitude, and they can move into these suburban, upper middle class and upper middle class neighborhoods, and they can just start looting and raping at will, and there simply aren't enough law enforcement to do anything about this?
What happens when all of these Muslim invaders, I mean, Europe, look at what has happened to Europe. There has been a veritable invasion, a cold invasion of Europe, by fighting age Muslim men who are coming in for the express purpose to conquer the land mass. Mass rapes going on in Scandinavian countries, and these people are helpless to defend themselves.
What happens when that paradigm, when critical mass is reached in North America, and that all starts happening there? Now, the advantage that people have in the United States is that they are armed, but they are so effeminate and they are so cowed, I at this point truly question whether or not the vast, vast, vast majority of Americans, armed as they are, have the virility and the desire to even survive, to actually open fire on what is basically an invading force.
And I called this, when Obama usurped the White House, they are going to dissolve the Mexican border, and they are going to facilitate an invasion, not only by Latin Americans, but most importantly by Muslims across the dissolved Mexican border. I seriously doubt at this point that modern Americans, effeminate and utterly lacking in virility as they are, have the capacity at this point to organize themselves to fight, to die, but more importantly to kill in defense of their culture and their homeland and even their families.
It's a horrible thing to say. It is a massively insulting thing to say, but I believe it with every fiber of my being. I see no indication of any virility left in post-Western, post-Christian civilization, including in the United States, no matter how many guns they tell me they are selling.
I don't believe that the people, I don't believe the men in America at this point have the guts to use them. You didn't finish the story earlier about when you came to the realization that, I guess that you were wrong and that things were more severe than you had previously thought.
When was it that you had that understanding? I think, and I'm just guesstimating here, but I'm guessing it would have been late 2010, early 2011, when I probably saw on Zero Hedge, because that was the main center of financial information, and they were the ones really doing any serious reporting on the catastrophic and the enormity of the problem in the derivatives market, when I realized how heavily leveraged those banks were, and I realized that the mathematics was impossible at that point.
That's when I knew that financially it was over. I've known that the Constitutional Republic of the United States, I've known that was over. I said when Obama usurped, "Look, if you can't enforce even this part of the Constitution, the entire rule of law is dead." See, that's the tricky part about it.
People are saying, "Oh, shut up. Who cares if he's an Indonesian national? Who cares? It's no big deal." It's an enormously big deal because what it speaks to is the higher concept of the rule of law itself. If you cannot enforce the rule of law in the small things, neither can you enforce the rule of law in the big things.
When it becomes a nation not of laws but of men, you're done. You're finished. I kind of was still holding out hope as late as 2010, but I think in 2010 I had completely thrown in the towel on the United States, qua the United States. It's never going to come back.
There's going to be a war, and it will be something else. It'll be something else. I don't know what, and I'm terrified that the something else is going to be really, really bad. The something else in Europe is almost certainly going to be some sort of a branch of the Islamic caliphate at this point, I think.
I think we're going to lose some— So I guess in summary, the reason I'm so fascinated, Anne, before the call dropped, the reason I'm probing on the timeline is that, I guess for me, I always feel this sense of responsibility to be right, and I know I can't take that on because I'm responsible for me and for my family and for my own actions.
But since I've chosen this role as a quasi-public figure and people look to me for my opinion and perspective, it's always hard to know the opinion. It's just hard to know if you're right. And so I'm certainly open, and I'm much more tender than you might think in the way I ask questions.
I'm much more open to possibilities that I'm completely wrong, possibilities of global catastrophe, et cetera. I personally have a soft spot for post-apocalyptic fiction. I really enjoy disaster planning and things like that. But it's just hard to get—I'm not at this point as far along as you, so that's why I'm just interested in the progression.
Because I know that a lot of people—formerly when I was working with financial planning clients, I know it was a similar thing, is many people have concerns and fears, but yet to go all the way to your perspectives requires basically the refutation of everything that you believe, and it requires a massive change of lifestyle.
And that normalcy bias, that sense of things continuing on, is extremely strong, and it's hard for people to extricate themselves. And it's hard for me to feel confident in such dire predictions as you give, enough to go all the way. Who knows? Maybe in five years I'll join you, but that's why I was probing along those lines.
Well, I guess I would come back at you. I've answered this so many times and explained my position so many times, and a lot of people have heard it. Let me come back at you with a question and see if we can shine a light on it from a different angle, and maybe that will illuminate.
Let me -- I still advocate tax strike, because that is the last nonviolent means of civil disobedience protest against a government. If you won't do that, if you won't cut them off, and people say, "Well, it doesn't matter because the Federal Reserve will print more money," but it would be the -- first of all, it would be the state.
So my question to you would be, how exactly do you think this situation is going to resolve unless there is mass civil disobedience? I mean, do we -- are we so naive at this point, after everything that's happened for the past eight years, about the utter farce that is the legislative branch in the cesspit of Washington, D.C., how Paul Ryan and all these people, they're all on the same team, they all have exactly the same agenda?
Are you -- do you honestly believe that this can be fixed by the normal electoral processes in what was the United States? Do you actually believe that the Constitution is still in force, and that this can all work itself out through those means? Of course it can't. I mean, I just don't even know what to say at this point to a person who thinks, "Oh, if we can just get a few more Republicans in, or if we can just get a Republican in the White House, and don't even get me started on Donald Trump.
This man is a snake oil salesman. He's intelligent enough to know what you want to hear, and he's saying it to you." Let me remind you, when this man married his third wife, Melania, a few years ago, the guests who were sitting in the front row of his wedding, where the seats that would normally go to parents at the wedding, who was sitting in the front row?
Hillary Clinton. Hillary and Chelsea Clinton were sitting in the front row of Donald Trump's wedding a few years ago. Do you honestly think that this man is in any way serious, and is anything other than a complete snake oil salesman? He's telling you what you want to hear. He's smart enough to know what you want to hear, and he's saying it, and you're falling hook, line, and sinker for this.
Look, this was a constitutional republic, the constitution of which began with the words, "We the people." The people of the United States own this. It is your responsibility to fix it, and you cannot sit there passively and expect this situation to fix itself. It will not. If you refuse to get engaged in any of these minor strikes that I have put forth, financial market strike, media strike, how many of your listeners are still paying for cable or satellite, still paying for this agitprop and this pornography to be pumped into the homes of their fellow citizens and their children?
If you can't even cut the cord from that, how do you think that this situation is going to resolve itself? By not engaging in a tax strike, by not getting out of the financial system, by not engaging in a media strike, by not getting your children out of the education system.
In not doing any of these things, what you have done is you have guaranteed that there will be a hot war. You have guaranteed that that is how this is going to play out and how it will eventually resolve. And I'll tell you right now that millions and millions and millions of people will die because of it.
Just war theory tells us that the people of a given nation are responsible for their government. And if any nation had culpability on this point, it is the former United States of America, again, the constitution of which began with the words, "We the people." The Declaration of Independence specifically citing the consent of the governed.
There's no way we can talk our way out of this. We're not under some tyrant king, or we weren't supposed to be. The documents themselves put all of the responsibility for this on "we the people," the citizens. It's our job to fix this, and in our complacency and our effeminacy and our inaction, what we've done.
The hour is too late now. I, at this point, advocate the tax strike because I think people should be using that money in order to stockpile commodities and prepare for the oncoming war. At this point, it isn't even about bringing the government down. War is inevitable. Stop paying taxes, do the right thing by your family, and start preparing for the war and start stockpiling.
So I'm with you on--I like how you called it strikes. I never thought of it as strikes. I'm with you on withdrawing from the government school system. I don't see how it's very--as long as we send our kids off to the government school system, I don't personally have a lot of friends who are conservatives and republicans and liberals and I have friends from all stripes.
It's hard for me to take people of the conservative bent seriously if their kids are in the government school system. So I'm with you there. I'm with you there even with regard to withdrawal from some financial markets. After years of working as a financial advisor and after years of selling lots of stocks, I just came to the point where I can no longer personally--my conscience will no longer allow me to be complicit in the evil of many of the large US corporations.
And I am with you in spirit with regard to the tax strikes in terms of I don't want my money engaged in the war machine. I don't want my money engaged in what I find the actions of the United States government morally reprehensible for the most part. And it's very difficult for me to send the money off.
I have two major problems with it. Number one is personally I'm a Christian. I have a theological challenge with it. I have not yet been able to resolve the conflict between the-- I've not yet been able to resolve the conflict between what is an appropriate action for a Christian with regard to paying taxes.
Let's leave that one aside for a moment because that will be of interest only to a minority of the audience. The more practical I guess question I have is I don't see what good I am to my family or anybody else if I'm in jail for tax protesting. So what was your mental process to the point where you quit paying taxes?
I don't want to go to hell. And first and foremost your role as a husband and father is to get your wife and children to heaven. That's your job. That is your primary job as a husband and father. And everything else is secondary to that. And think about over the course of human history how many men have marched off to war that they knew they would almost certainly not return from.
Walked away from wives, from their wife and minor children and marched off to go die in a war. If you make the argument that I can't do anything that might jeopardize my being around as a breadwinner for my wife and children, what you're doing is you're just basically crapping all over the sacrifices that those men made.
The men who marched off to fight the incoming Muslim hordes into Europe, to repel the Musloids at Vienna, to the campaign of Charles Martel at Tours, to keep Europe liberated from the Musloids. World War II, how many men went and enlisted? Married men with children went and enlisted because it's your duty.
You have to fight. You have to set a good example. You have to provide virile leadership. And you have to think about what kind of world do I want my children to live in? Do you want your children to live under the jackboot of a combination Maoist, Leninist, Islamic, totalitarian system?
That's what we're cruising for right now. Do you want your grandchildren, your great-grandchildren, descendants of you that you will never, ever meet, that you will never, ever look in the eye? Do you want your great-great-granddaughter to undergo female genital mutilation? Do you want your great-great-granddaughter to be married off to a 75-year-old pervert to be raped at the age of six?
That's what we're moving towards. Do you want your great-great-grandchildren to live under Marxism, to live under social Marxism, political correctness? Do you want your great-great-grandchildren to live in a world in which if you address someone with a gendered pronoun, you will be executed? That's what we're moving towards. We're moving towards it rapidly.
I don't know if you saw, but recently, within the last two weeks, there was a law passed in New York City that an individual can be fined up to a quarter of a million dollars for addressing someone with a gendered pronoun that they don't like. So if I call Bruce Jenner "he," if I call him "Bruce" and I call him "he," presumably in New York City right now, I could be fined a quarter of a million dollars.
We see the people, the bakery owners in Oregon, who have had a judgment levied against them because they politely declined to bake a wedding cake for sodomites. For sodomites! Politely declined. To where, just last week, the reportage was that, like me, as a tax protester, but obviously they've done a different thing, they're protesting this situation, this political correctness totalitarianism.
They had their bank accounts swept. So these people are done. These people are completely done. Your property is not your own. If you do not comply with this totalitarian ideology, this diabolical ideology, you will be personally destroyed by your own government, which you continue to pay taxes into. If this isn't worth fighting and dying for, what in the world is?
Look at the things that people have gone to war for. Look at just the rationale of the American Revolution. I make this joke, I cite this joke all the time, but I do it over and over again because it really drives home the point. It's a Dennis Miller joke.
George Washington was blowing people's heads off because they taxed his breakfast beverage. That is the kind of thing that people were ready to run off to war for, fight and die for. Here we sit in one of the most despicable, diabolical totalitarian overthrows of a culture and a society in human history, and no one will lift a finger.
No one will even cancel their entertainment vector, namely their cable or satellite feed. And people say, "Well, I can't be expected to do anything that might jeopardize the income of my family." What the hell kind of life are your kids going to have when they're your age if this isn't stopped now?
And like I said, the die is cast, the deed is done, the window is closed. This is only going to be solved with war. Do you expect to be imprisoned for your tax protesting at some point in the coming years? It wouldn't surprise me. I initially thought that yes, I would probably be imprisoned, but given the steps that I have taken and the moves I've made, I actually expect that I'll be killed before I'm imprisoned.
So I expect to die, hopefully fighting musloids. That's kind of what I see right now. Practically speaking, when did you stop paying taxes? Right after MF Global. So yeah, I think the last tax payment I made was in Q4 of 2011. And how long did it take before your bank account was subpoenaed and that whole process?
Bank account was swept on the 28th of December 2012. What was more interesting though was the foreclosure of my... The situation I had was that my office, I had bought a residential condominium that I used as my office. And I had sold everything else off. I had sold my big house house.
When Obama was elected, I knew that I needed to get out of that high-end residential real estate market. I sold that. And so I'd actually been living in this lovely, beautiful residential condominium that also housed my offices. And so I'd never been late with a... I've never missed a payment or been late on a payment with anything in my life.
And I get a notice from... The mortgage was through Wells Fargo, which was then sold off to the government, as they all are. But Wells Fargo was a servicer. So they call me and they say, "You have to send us, as a self-employed person, you have to send us a copy of your tax return, which should have been filed in the spring of '12 for 2011." And I, of course, said, "Well, I did not file.
I have no tax return. I'm not going to have a tax return." And they said, "If you can't provide us with a tax return, then we are going to foreclose upon you." Now, understand, never missed a payment, never been late. I mean, I am... My credit score at this point has an eight in front of it.
It's just, you know, on and on and on. From the notification of foreclosure, which was also at the same time that my bank accounts... No, my bank accounts were swept on my birthday, on October 27th. It was the announcement of foreclosure was on December 28th of 2012. And, you know, I called Realtors and I said, "What can I expect here?" And they said, "Well, you know, cool your jets because you've got at least 18 months on this process.
You've got at least 18 months before you can figure out what you're going to do." And I said, "Okay, my property sold on the courthouse steps less than six months later." It was scheduled... The first auction was scheduled for four months after my first notice of foreclosure. Again, only because, only because I couldn't provide a tax return.
Not because I had missed any payments whatsoever. It was completely current. The first date of auction was four months after, and then it was delayed twice, and it sold on the courthouse steps six months later. And every Realtor and every real estate attorney I talked to just stood there with their mouths hanging open and said, "I have absolutely no idea what to even say about that.
That's incredible. Absolutely incredible." And at that point, I think I had enough notoriety. I don't know for certain, but I suspect that perhaps the wheels were greased in my case, as it were. But it was no problem at all. It actually worked out better for me. And, as it turned out, it sold at auction for the balance that was due on the mortgage, so the IRS got nothing.
The IRS had filed a lien like three days before on the property because they saw it was going to auction. It sold for like $100 more than the balance on the mortgage, and so the IRS got nothing. Thanks be to God. So it worked out really, really well. Wow.
Definitely sounds like there were some higher authorities in the tax structure that were working hard to get your situation moved along quickly. So at this point, you just simply live a cash existence and depend on your social networks for your means of living? Yep. Absolutely. Completely hand-to-mouth, 100% cash.
And it's getting harder and harder and harder and harder to get in line to a way where they have cash. They're getting everything they can. When this first all happened, the thing that intimidated me very much was the fact that you cannot, in the United States anymore, you can't rent property without getting a credit check.
And, of course, when you have an IRS tax lien and you have foreclosures on real estate, your credit is completely destroyed. And they see that it's a tax lien. You can't go to most of these apartment complexes and even fill out an application, because they'll ask for your Social Security number and they'll ping your credit.
So that's a problem right there. The other thing is you can't pay rent in cash anymore. Thankfully, a situation and situations have been put in front of me where I have been able to rent cash under the table, black as it were. And again, it's getting harder and harder and harder to do that, but still able to do that.
And cash is still being used. You can still get cash out of ATM machines and so forth. But there's going to come a point they're going hard after cash, because when you have a negative interest rate environment, that's another thing that I talk about in my economics presentation. I talk a lot about zero interest rate policy.
And then I also, in advance, long before zero interest rates came into being in Europe and now getting into the United States, I talked about what the ramifications were of negative interest rate policy. One of the key ramifications of having a negative interest rate is that you have to do away with cash.
Because at that point, if interest rates are negative, it only makes sense for a person to hold all of their money in cash outside of banks. Why would you deposit your money in a bank if the bank just takes a percentage of it, because that's what a negative interest rate is.
So if they're going to have these negative interest rates, which is now the only way they can keep this financial farce going, is to drop the interest rates negative, what you have to do as a corollary to that is to eliminate cash from the economy. We see steps of this happening in Europe, hardcore, and they'll eventually do it in the US as well.
And I want to thank you for making the time to come on the show. I want to thank you for your willingness to say unpopular things and live according to your beliefs. If people are interested in more information, is the YouTube presentation that you referenced, I found one video on YouTube entitled "The Economy is Going to Implode, Full Version." Is that the presentation?
That's the one. Okay, great. So I'll link to that in the show notes for today. And then anywhere else, other websites, particular places that you'd like people to follow your work and your perspectives? Pretty much the only place where I am online is at my website, which is www.Barnhardt.biz.
And my Twitter feed is there, and a link to my YouTube channel is right there. So that's where you go to find me. Anne, thanks so much. Thank you, sir. Don't just dream about paradise. Live it with Fiji Airways. Escape the ordinary with Fiji Airways Global Beat the Rush Sale.
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