Aaron Brabham: Welcome to another episode of Stansberry Radio. I'm Aaron Brabham. My co-host as always, Porter Stansberry. Porter, we've had some technical difficulties haven't we.
Porter Stansberry: Hi everybody. I'm broadcasting today from my boat, The Two Sons, at Miami Beach Marina. And let's just say that getting all that to work technically was not easy. It was easier catching the 400 Blue Marlin than it is getting this technology to work.
Aaron Brabham: Yeah, let's take a moment to talk about the fishing trip on The Two Sons. As we talked about before, you've got this gorgeous 65 foot yacht. You have a fantastic crew. We headed out to Chub Cay, which was actually the inaugural fishing trip last year, and we continued our success with catching some great Billfish.
Porter Stansberry: Aaron finally got his first Marlin, and, in fact, he got two this trip. And I had a Blue that was so big we couldn't bring it into the boat. We leadered it seven times, but we couldn't horse it into the boat. I was fighting it on a 30 pound rig, which is a pretty lightweight rig for a big fish, and we just didn't have enough horsepower in the reel to tire the fish out.
So even four hours later, he was still fresh. We got some great video of it though. We'll be posting on the Two Sons Facebook page, if you guys want to see it. Aaron, why don't you tell everybody what you're doing this winter. You're kinda being the nomad.
Aaron Brabham: Yeah, that's exactly right. I headed down to our Delray Beach office to escape the Baltimore winter and also the crime. And I gotta tell you, I cannot –
Porter Stansberry: The crime. [Laughter].
Aaron Brabham: I can't get used to not looking over my shoulder, Porter. I am so used to seeing what's behind me, it's kinda disturbing me. Yeah, enjoying the weather down here. I get to hang out with different people that work at Stansberry down in this office. We have probably about seven employees down here, so it's good to mingle.
Actually, we have Doc Eifrig down this week. He's doing some work. And I know a lot of our listeners enjoy when Doc's on the radio show, and we'll have him on again pretty soon. But, yeah, man, I'm loving it. So, Porter, spend as much time in Miami as possible. That way I'm only an hour away.
Porter Stansberry: I love. I'm down here at Villa Crono and I've got the boat at the marina. And it's just a – this is the way we should love. I don't know. Lord knows why I don't live here year round, but I probably should.
Aaron Brabham: Well, we're gluttons for punishment. What can we say?
Porter Stansberry: So, Aaron, now let's tell the folks what's on the show this week 'cause I know we've got a – we did the interview ahead of time and it was a really interesting interview. And tell them what they’ve won, Aaron.
Aaron Brabham: Sure, absolutely. Well, you've won the ability to listen to Alex Jones this week on our show. And as our listeners are probably aware –
Porter Stansberry: The globalists are coming, oh. The red coats are – argh, argh. He goes completely insane again on our show this week.
Aaron Brabham: Yeah, you're gonna really love this one because he really goes on a rant about his appearance from Piers Morgan show on CNN, where basically there was no argument other than just to try to tool Alex Jones out. But, yeah, he's got a lot to say about the gun issue. And during that time of the interview, actually the day that we recorded it – which was a couple of days ago – President Obama had not come out with his 19 executive orders to kind of get this gun control stuff all in check.
But he's still leaving a lot of it to Congress. He's leaving the assault weapon ban; he's leaving the high-capacity magazines, and I don't know if that'll make it through Congress. It's a Republican house. I don't know. Do you see it happening, Porter?
Porter Stansberry: A couple of things. First of all, everybody should know I'm an avid gun owner. And we've got – my boat is – we're armored like a paramilitary force here 'cause you're out in the middle of the ocean, you're in the Bahamas, there's no real law enforcement. So you gotta make sure you're safe. So we've got lots of weapons and lots of ammunition. And we have a reason to [break in audio] protect ourselves when we're 800 miles outside of Miami.
But, on the other hand, I don't have as much fear as a lot of other people do about the fate of the Second Amendment. I think the Second Amendment is generally respected and generally well liked by almost all the politicians in the Republican Party and many of the politicians in the Democratic Party. And the NRA, the gun lobby, is one of the most powerful political organizations in our country.
I personally don't feel like my rights to my weapons and my ammunition are really that threatened. And when Obama said he was gonna do something about it, I expect it to be mostly political smoke and mirrors. And, so far, what I've gotten from it is he wants to make sure that anyone who buys a gun undergoes a background check.
Now, you might think that for me, personally, that sounds pretty reasonable. I mean if you want to get a driver's license, you gotta go and prove that you can safely, responsibly handle a vehicle. I personally don't have any problem at all with people proving that they're not mentally ill and people proving that they don't have a felony in order to buy a weapon. I'm okay with that. And, hey, don't tar and feather me.
I understand that all these registrations and all these licenses are designed to provide information to the government so that they could someday round up the weapons if they wanted to. That's all true. Anytime the government decides they want my weapons, they're gonna frickin take them and there's nothing I can do about it.
So I don't really see any of this stuff as being another than just sort of political gamesmanship. I'm not paying that much attention to it. But Alex Jones, on the other hand, he thinks it's the beginning of the next American Revolution or something. Maybe he's right. You should definitely listen to him and see which argument you agree with.
Aaron Brabham: Yes, absolutely. No, Porter, something that we talk about repeatedly on here like beating a drum, is we talk about the shale boom. And Texas actually ran an $8 billion surplus on their budget this last year. Why? Because of the shale boom. This is one of the things that we predicted with your package of the third term, that if the government were to take this seriously and have a little bit of austerity, we could get ourselves out of this hole.
Because it's already proving in Texas and it'll prove throughout the nation. This would be great revenues for the federal government. The question is will they actually do anything positive to pay down the debt. I personally don't think so. What are your thoughts?
Porter Stansberry: Yeah, we've talked about this so many times, Aaron. Has everything happened exactly like I said it would for the last six months when it comes to the fiscal cliff issue?
Aaron Brabham: Absolutely.
Porter Stansberry: Yeah. Pretty simple, right. Guess what happened with the fiscal cliff? Somehow spending increased and somehow the tax base got narrower. That's what's gonna continue to happen because that's the only thing that can happen politically. So no matter how big the shale boom is – and I think it's gonna be enormous; I think it's gonna be far larger than anyone even has begun to figure out yet – they will jack up the government revenues.
I wouldn't be surprised if the government could make $1 trillion a year in ten years on oil exploration and production in the United States. That's a lot of money. That's more than half of what the – sorry, that's about half what they collect in income tax revenue. So it could really help them and we could probably solve our budgetary problems if, if, if we would just learn to control spending. But we can't.
And not only can we not control spending, but the entitlement state is growing larger and more powerful and more entrenched every day. And so I feel like we're on the bottom – we're on sort of maybe like the seventh inning of this fiscal collapse of our country, where our political system has lost the ability to control spending.
And the base has gotten so narrow that there's now no political way to prevent tax increases on the 1 percent or what – and the idea that the 1 percent can pay for 30, 40 percent of the government's needs is ridiculous. So I personally think that the shale boom is gonna give them some breathing room.
But I don't think it's gonna do anything to actually reverse the significant and scary trajectory that we're on when you look at the combination or when you look at the intersection of politics and finance in our country. There's just too many people who depend on the government and they are always gonna vote for more of it. And there's too few people to pay for the government and they can't do anything to stop it.
Aaron Brabham: Porter, on that note, I drank the Kool-Aid finally, and I know last – a couple weeks ago, I guess or, actually, last week, we released the podcast with Van Simmons, which is the Premium podcast. We try to bring one idea and a big guest on every single month for our Premium subscribers where they can gain some value and insight into investing, owning your own business, being an entrepreneur, passive revenue streams, that type of stuff.
We had the Pensam Capital people on the first month; they were great. Well, I called Van Simmons and I went in on buying some gold and silver for the first time. And I gotta tell you, I'm thinking about going ahead and buying some more because – I don't know, maybe I'm getting a little obsessed.
But when I saw the assault weapons potential ban come into play, I realized how quickly things can be taken out of inventory and be banished pretty much forever or you've got to pay an astronomical amount. So I think that could ultimately happen with gold. You've had your "End of America" theme for quite a while. You've been writing about it since 2006. Everything's pretty much played out, just not as fast as possible.
But I encourage all of our listeners out there, especially if you're Premium subscribers, go back and re listen to Van Simmons. He has some great coins. I bought some of the ones that he felt are the most, what, close to parity for premiums to the value. And, yeah, man, I can't say enough about Van Simmons and his staff. They're fantastic.
Porter Stansberry: Well, I've bought a lot of gold over the years, Aaron, and I haven't sold any yet, if that you gives you an indication to where I think things are headed. So, yeah, I think – like I said many, many times – I think people should have at least 10 percent of their net worth in gold, and if you prefer silver, that's fine too. But, personally, I'm a gold guy.
Aaron Brabham: All right, Porter. Well, let's go to Alex Jones and let's hear what he has to say about his appearance on the Piers Morgan show.
Porter Stansberry: Okay, everybody. Today, we've got a very special guest, Alex Jones. As most of you know, I've been talking with Alex, regularly, since we put out our "End of America" promotion. And a lot of the ideas that I have from an economic and financial standpoint.
Alex is following more from a political and a social standpoint, and he's become fairly well known. The most recent media blitz from Alex Jones was his appearance on CNN. He was organizing a campaign to get some poor guy supported. Alex, for folks who don't know the story, what the heck's going on?
Alex Jones: Well, we used the White House Petition, where Obama's trying to democratize things and make people think that if they ask him for something – a house, a car, free health care – he can give it to them. And then, of course, he suckers them and increases the cost of everything and takes more money out of their paycheck, including the poorest Americans.
And so I was using the White House Petition system, really, just as a publicity stunt to expose the fact that we have a Communist Chinese government, the Russian government. Piers Morgan, fleeing justice from the UK, on record, over here in the U.S. and lecturing us, lecturing us on how we should turn our guns in. And so we put out the petition.
It got picked up. It's got like 120,000 signatures last time I checked. And so Piers wanted me to come in the studio with him and debate that gun control. And so I decided, instead of just sitting there and playing nice with him, to get in his face and let him know that I understand they're just a mafia that wants to disarm us, a bunch of foreign banks that are busy bankrupting this country and have disarmed everybody else and want us disarmed. Just tell it like it is.
And so that resonated with the American people and became, I don't know, the biggest story in the country for about two days, number one Twitter trend, and things like that. And now, I've put out a Citizens Articles of Impeachment for Obama and that's getting sent all over the Internet right now, pointing out all the different acts of sedition and treason committed by this globalist minion, Barack Hussein Obama.
Porter Stansberry: Well, how does that work? How can you get – how can just regular citizens impeach a president? Doesn't the House and the Senate have to have an impeachment trial and then there's gotta be some sort of –
Alex Jones: Absolutely. It goes to the House, and they have to vote whether there's gonna be a trial. It goes to the Senate. No, no. Our forbearers got together as citizens and said – July 4, 1776 – I called for a second American Revolution two months ago, a peaceful, velvet revolution of ideas, but to have the states succeed under the Declaration of Independence powers, our right, our duty inherent in us.
So it's under the Declaration of Independence that I declare these powers. And if others agree with me, we can come together and move forward. And then it’s the idea of have the states succeed, not to get rid of the Republic but to kick the globalists out and then re-upload the Republic, kinda like rebooting your computer.
And I had Edwin Vieira, top constitutional law scholar, Brutus Rhine, a congressional advisor to Ron Paul and many other constitutional lawyers and a bunch of others. And they concurred with my analysis and my plan and endorsed it. So did Lou Rockwell.
It's not a novel plan. It's inherent in the Declaration of Independence that when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. Declaration of Independence, July 4, 1776.
So I simply list the Constitution in my citizen's arrest. It's a citizens' file, articles of impeachment against Obama. I kick it out there and show congressmen talking about it, show state reps talking about it. They're already pointing it out. This is a jump point for others to then pick it up. And kinda like Martin Luther nailing the stuff on the church door, I'm saying, "Here is all the different things that he's done that are impeachable."
Like he became the head of the U.N. Security Council. No president's ever done that; violates Article 1, Section 9, impeaching. He told Congress in three separate hearings last year that NATO gives him authority to attack countries. He doesn't get the power to wage war from Congress. So I say impeach him on that front. They’ve been caught lying on Fast and Furious. Impeach him on that front.
He circumvented Congress not passing the carbon tax situation, and he's putting it in via orders to shut down coal power plants. I say impeach him. He's launched wars in Syria and backs the al Qaeda rebels. Congress has sent him letters saying you can't do that. Well, I think it's time for Congress to stand up and impeach him.
Porter Stansberry: Sounds good to me.
Alex Jones: And we'll [crosstalk] on John Hancock.
Porter Stansberry: We think he's gonna run for a third term.
Alex Jones: By the way, you know I gave you credit. You were the first person I heard talk about that, and they’ve introduced the perennial bill that now it's got Democrats salivating, pushing it, and they're actually trying to pass the bill to repeal the 22nd Amendment. So Ron Paul was on my show last week, the outgoing congressman now retired. And he said, "Yes, this will be the line in the sand. It will cause the revolution if they try to take the guns." Well, that's the whole plan. So I'm just simply –
Porter Stansberry: We're conducting this interview about midday on Wednesday. And I think, in about an hour, the president is supposed to announce some kind of new sweeping gun control.
Alex Jones: Yeah, 30 minutes.
Porter Stansberry: I don't know if it's an executive order or legislation proposing. I don't know what's gonna happen. But I can tell you, in history, that first they take your guns and then they take your money and then they take your property and then they take your life. So we're heading down that path and, of course, they finance all this power with a bunch of printed-up phony money.
Alex Jones: That's right. They finance their takeover with 1.5 quadrillion worldwide of derivatives. Now, they have their trader operatives shine us on. It's like the Vichy French. For those that don't know, the French didn't lose against the Germans in a week, like we're told, okay. The French high command, 90-plus percent of them had sold out beforehand to the Nazis to be the new government, the new viceroy government, when Hitler invaded.
So a very small portion of the military fought back, a small British expeditionary force fought back and got run out of Dunkirk. And they were called collaborators. And Obama and the globalists and the Democratic Party and most of the Republicans are globalist, foreign, bankster collaborators.
Porter Stansberry: All right. Well, let me tell you something that's going on that's just broke today that I think will dovetail – it's a connection between the stuff that I study and write about and the stuff that you study and write about. And that is the Germans have announced that they're gonna repatriate half of their gold bullion.
Alex Jones: Yeah. Nobody trusts the U.S. Everybody's pulling their gold.
Porter Stansberry: So they're repatriating half of the gold bullion with the express – they said, clearly, the reason is because "We want to be able to quickly exchange bullion for currency." In other words, there is a process of remonetization of gold going on, at least at the Central Bank level. And as our trading partners begin to take their gold from us, what do you think is gonna happen to the value of our paper money?
Alex Jones: It's gonna go down, down, down. It's kinda like – I went and saw William Shatner last week. It was great. Never seen him in person. Well, he was here in Austin, Texas. He's 82, just an incredible comic. And I was there watching him. He went for two hours. He was supposed to go an hour and a half. He loves entertaining. He went for two hours at the Paramount Theater here in Austin, Texas.
And about an hour and a-half into it, even though it was a great show, a couple of people started getting up. And almost like lemmings off a cliff, by the last five minutes, a third of the people were getting up to leave because they were that – they didn't have attention spans anymore. And by the time he was saying, "Bye," half the people were up rushing for the exits.
And we've now reached ten minutes before the curtain lowers, and people want to get out of the parking lot first, for whatever reason, when they could have just set there and wait till everybody leaves and take their time like I did. And, yes, the rush to the exit is about to start, in my humble opinion.
Porter Stansberry: Yeah, I agree with you. And it's gonna be very interesting to see. The thing that I'm most curious about, Alex, as we go down this path. The president has achieved an enormous amount of political power by buying off huge segments of the American population. Obama phones, EBT cards, unlimited unemployment benefits, to where the dependency ratio is all out of whack. It's never been like this in America before where so few able bodied people are working as a percentage of the total –
Alex Jones: And now, they want our guns.
Porter Stansberry: And they're gonna take our guns. There's no doubt about that. But what I'm curious to see is we know that these kinds of financial and economic systems are not sustainable. You can't live at the expense of your neighbor. Two-thirds of the American population cannot live at the expense of the one-third that's still working.
So these systems are going to break down as they do in every socialist country around the world. First thing that's gonna break down is the medical system because Medicare and Medicaid are not gonna be able to reimburse doctors at a rate of payment that the doctors will accept.
So you're gonna have lines forming all around hospitals, and doctors quitting in droves, and I already see that. Both of my private physicians – the one I go to in Miami and the one I go to in Baltimore – have already dropped out of the entire Medicaid and Medicare system. They no longer accept it. They will only take cash, and they require a $2,500.00 annual deposit just to answer the phone when you call. So how many of Americans can afford that? Not many.
So the poor are gonna be out of doctors. And the other thing I think that is already falling apart is the education system. As you probably know, Obama wanted – "I wanted everyone to go to college for free," so he made this ridiculous expansion of the college loan program. So now, there's $1 trillion outstanding in student debt, and the students, of course, are not getting a very good education because they're not going to Harvard.
They're not even going to a solid-state school like a Virginia or University of Florida or University of Texas. What are they getting admitted to? They're getting admitted to all these diploma mills where they can't even get a job afterwards because they weren't actually taught any skills; they just ran up a bunch of debt.
So you're gonna see the medical system fall apart; you're gonna see the secondary education system fall apart. Of course, the primary education in high schools has long since fallen apart. We call these things jail schools 'cause they only thing they prepare you for is to go to jail.
Aaron Brabham: And Porter thinks the schools –
Alex Jones: And you are absolutely right.
Porter Stansberry: – systems fall apart. Now two that I want to ask you. As these systems fall apart and people can't get an education and they can't get health care, what are they gonna do? Are they gonna blame Obama? Are they gonna blame the socialism that caused these problems? Or are they gonna demand still more of it?
Are they gonna demand even higher taxes on the rich and waste even more money on these failed systems? And if they do, what the hell's gonna happen to our country? When will the poor people realize that the promises that Obama is making can't be delivered and that he is leading us into a sinkhole?
Alex Jones: Well, if you read the different globalist documents put out by Bertrand Russell 50, 60 years ago, and others, they said our socialism always fails. So what we'll do is set up a high-tech police state and then walk them into different stages of collectivization. They call it the scientific dictatorship. They don't even call it socialism.
Their whole system is about control. So they consciously know it's designed to fail. I know you know that, Porter, but I'm just putting that out for people that may be tuning in for the first time. And they are walking us into something where each new fix is only designed to make us that much more poor.
That's what Agenda 21 and Maurice Strong and the Rockefeller Foundation and the Carnegie Endowment all state, is that they want to make us absolutely poor and incrementally raise taxes until we're completely bankrupt, and then use a global government to shut down any tax-avoidance countries where people may try to run with their wealth, while only the top one-tenth of 1 percent is exempt from all of the global governance rules that they bring in upon us.
And this is the name of the game, and they’ve now got over half the public domesticated one way or another. And the public is so domesticated that some mainline Republican said, I shouldn't have raised my voice or yelled at Piers Morgan. I should have been polite. I mean the average conservative probably would have gone out and shot Paul Revere and then handed the Redcoats the guns and licked their boots – if a guy rode down the street with a horse, yelling, "To arms, to arms. The government's coming to take your guns."
Our founders killed people in defense of liberty. I'm just saying, "Hey, we better wake up and say no," and people are like, "My gosh, that's extreme." So, yes, we have a country that is a shadow of its former self, where even the most informed are still a bunch of domesticated cowards. And so the Mafioso government, the gangsters, the wolves, go, "Look, these are a bunch of legless sheep rolling around in a bowl of gravy. Let's eat them."
And when the wolves are there tearing the throat out of the sheep beside the other sheep, and blood's splattering on them, the wolf says to the other sheep, "Don't run. That blood is just a sign that this other sheep is real happy." I mean that's how insane this is.
As the Obama phone lady – I actually got her down to Austin a few days ago – the lady that said, "Obama got me a phone and he's gonna do more." And I showed her clips of Obama saying, "I'll never come after any of your guns," and then now saying he's coming after them. And I showed her clips of him four years ago saying, "I pledge not to raise any of your payroll taxes –"
Porter Stansberry: Oh, right. Yeah, sure.
Alex Jones: – unless you make $250,000.00 a year." And then she saw those lies. And she's a maid working for $8.00 an hour, and she goes, "My gosh, actually I did just see my paycheck get more taken out of it. You're right. He lied to me. Why would he do that to me? And I said, "Because you're a sucker. Stop being a sucker."
Porter Stansberry: At least she's –
Alex Jones: I know I'm ranting here.
Porter Stansberry: – breaking now. That's better than just about any of the other people that have voted for him.
Alex Jones: It is. But I mean these people are absolutely childlike victims. It's easy to laugh at them, but it's sad. It's sad because –
Porter Stansberry: So do think that there will be –
Alex Jones: – even the best of us –
Porter Stansberry: – any true, organized resistance to complying with legislation that requires people to register their guns or – and, essentially, the line up has them taken away later? Are there any states where there's brave enough politicians to say, "We're not gonna take that in our state?"
Alex Jones: Yes. You know I always say in my broadcast that's coming to you from the heart of the resistance, Texas, there are multiple constitutional defenders out of the state of Texas in Congress, like Stockman and others that are saying they're gonna introduce those articles of impeachment that I was just mentioning earlier. I'm just getting the idea out there. They're gonna introduce multiple articles of impeachment on this issue.
See, what Obama's doing is he's playing a mind game. He goes, "Listen, I know that executive orders can't take all the guns. They can take some of them." No, he can't take any of them on an executive order, okay. And that's clear in the courts and the Constitution, the Bill of Rights, our whole history.
The first executive orders were how much money Congress – President Washington was requesting from Congress so that Martha Washington could get drapes and cutlery in place, so they could entertain the French ambassador. And then now, a spending request and then how a president would direct spending for the White House, has now turned into the president saying, "I can sign executive orders to shut down coal power plants. I can sign executive orders to take your guns."
So he's going to direct money with executive orders, get the ATF to harass legal gun owners. He's going to direct – they’ve already announced with these executive orders are gonna be – to harass and lean on manufacturers to ban importation and to shut down gun shows outside of law. So the only course is impeachment.
If they can go for the guns – they’ve already taken the money, they’ve already gutted the economy; they’ve already gutted the Republic seven ways to Sunday. They’ve already taken everything not nailed down. And now, it's the final symbol of "We're now going to take your guns."
And you're right. They're gonna raise the property taxes 100 percent like they’ve done in Australia and Europe. They are going to nickel and dime you at every level through environmental laws. It is Agenda 21, designed to reduce us to absolute serfdom. The power to tax is the power to destroy. They are destroying us.
Porter Stansberry: I don't know. It seems to me that we're pretty much already there. Way more than half of the income I earn in my company ends up going into one tax coffer or another. So who am I really working for? And that – of course, that's before I die –
Alex Jones: You're working for a bunch of surly –
Porter Stansberry: – and then they get another 55 percent from my poor family.
Alex Jones: You're working for a bunch of surly, snot-nosed, organized white-collar criminals with high-tech propaganda cores, the mainstream collaborator media, the dinosaur media, the state-run media. And they know exactly what they're doing and they're in a race to dumb us down and make us as poor as they can before they completely collapse everything.
And they’ve got official Army manuals where they talk about putting us in forced labor camps. And that is the plan. Once they’ve collapsed everything, they're gonna hand machine guns to potbellied welfare moms, who will have Porter Stansberry and Alex Jones who will actually work. Working is their slave. They will have us behind government plows.
Porter Stansberry: I tell you what, Alex. I'm not gonna be a very good slave. I was never very good at following directions. You know there's another thing I wanted to as you about that I just noticed. You know I spend my winters and most of the spring in Miami Beach. My family has a property down here, and so I bring my kids and my wife, and we bring my in-laws.
Every uncle and cousin I've got wants to come down for a week in the winter to Miami, and I don't blame them. I'm happy for them to come. So I do a lot of entertaining down here. And when I got down this winter, I noticed that all of the police cars in Miami Beach – and by the way, Alex, Miami Beach is not a real tough neighborhood.
Alex Jones: That sounds good. I like that.
Porter Stansberry: It's a very high-end area. Everyone comes here on vacation. Most people are having a good time. I'm sure there's some petty crime, but there's no violence in Miami Beach. There's no shootings on the corners or anything like that. And, historically, the police down here have worn, basically, shorts and T-shirts, and they’ve been crowd control and very friendly with the tourists and a really light touch of law enforcement.
Well, we got down here this winter and all of the police cars now have been militarized. They look like something out of a scientific horror film. I mean they’ve got this enormous black iron covering on the front of them, and they're all blacked-out windows. And they’ve not these nasty-looking black tires and black wheels. And the whole "protect and serve" model has gone completely backwards.
And these guys are just unbelievably intimidating and aggressive. And I just wonder – I know the same thing has happened all around police departments in America, where police departments have gone from being this friendly officer on the corner to being, essentially, Army Special Forces SWAT team kinda thing. And I wonder why that doesn't trigger anything in my fellow Americans to say, "Wait a minute. These guys are working for us. We're law-abiding citizens."
Alex Jones: It actually does.
Porter Stansberry: "Why are these guys yelling at me? Why are these guys shoving me? Why is this guy holding a militarized shotgun when he's getting out of his car for a routine parking ticket or traffic stop? I mean I don't – I can't figure it out why no one is not freaked out by this. But I'm telling you what. It scares the crap out of me.
Alex Jones: Well, look. When your government starts dressing like Darth Vader, you're in a discobia. When they start dressing like executioners, look out. It's because criminals took over. They had a Maryland police chief, a few years ago, admit that they're wearing these uniforms to, quote, "scare people." And we have a criminal government and they are trying to convert all departments over to this right now.
You do have state reps; you do have Congress people saying no. There's been quite a few sheriffs and police chiefs go public – mainly my listeners we discovered – come out and say, "We're not gonna do this." We've had county judges, mayors in Texas come out and say they're not gonna be part of this. So this is really a boys from the men, tyrants from the patriots situation. You know, the good from the bad is being counted right now. And so it's a very serious time.
Porter Stansberry: Hey, listen. I watched the thing on CNN, and what occurred to me is that the guy interviewing you had no intellectual position at all. He could not justify what he was advocating. And I just wondered, when the interview was over, how did you guys part ways.
Alex Jones: He was like, "Get out of here." And I said, "Listen. You're a gangster; you're a hired thug and we're gonna defeat you."
Porter Stansberry: Nice, nice. So there was no friendly parting.
Alex Jones: No, this is real. This is my birthright. I'm not playing games. I see the Darth Vader police. I see the highway checkpoints. I see every mark on a checklist to the road to tyranny being marked. I see every sign we're plunging into despotism. This is real. This is a problem. This is out of control.
Porter Stansberry: Hey, it's great. That's great. I really appreciate you getting out there and fighting for us and raising awareness. And thanks again for being on the show.
Alex Jones: Oh, hey, it was great being with you. Thank you so much, Porter. When do you want to come on my show?
Porter Stansberry: Anytime. Just talk to the Naresh and book, and I'll be there.
Alex Jones: All right, I'll call him.
Porter Stansberry: All right, man. Take care.
Alex Jones: Talk to you. Bye.
Aaron Brabham: Porter, what are your thoughts on Alex Jones' interview?
Porter Stansberry: Well, you know we just listened to him and he says a lot of the same things each time we have him on. He's very concerned about sort of the – who's really in charge of our government. He has a belief there's a global – I guess some kind of a catalyst or some kind of a senior authority, maybe working through the UN or through the banks that are actually controlling the strings, controlling things.
And he sees us as losing our civil rights and ending up in FEMA camps and things like this. And I have to tell you, I find all that to be very, very unlikely, extremely unlikely. I just – I don't see it happening. In fact, I see sort of the opposite happening. I see the populace movement in the United States becoming stronger and stronger and Americans, unfortunately, abusing democracy in a way that I think is likely gonna be very destructive for us.
But I will tell you this. I think it's important to listen to people like Alex Jones and to pay attention to these unlikely outcomes. Because let's say there's only a 5 percent chance that Alex Jones is even remotely right. Well, if he's even remotely right, it would do you a lot of good to move some assets offshore and to do your best to stockpile gold and ammunitions and weapons.
And I know that sounds a little crazy, but I have a firm belief that it's my responsibility to take care of my family no matter what happens around me. And so I do a little of – I do my own little disaster planning. What happens if the worst happens? Well, you know we've got 2000 gallons of diesel on the boat, we got generators, we got water makers. We got plenty of guns, plenty of ammunition. We'd be fine. We can take off.
If we're up in Baltimore and there's riots in the streets or whatever, you know I've got a 12 foot brick wall around my building, we've got guns and ammunition. We got a chance. And then, I have an outhouse where we can go and get away from the mob if that's what occurs. Now, believe, me, I don't think any of those things are very likely.
But I do think it's important to consider because it – and it's some kind of a financial breakdown – that we would have a lot of civil unrest. In fact, I would say it's almost a guarantee. So whether we end up having these problems because of what Alex Jones says and because of some government design, or if it happens because of what I believe, which is just a fiscal collapse of the U.S. dollar, I still think it will pay to be prepared for unlikely outcomes. Even if they're unlikely, you still should pay attention to them.
Aaron Brabham: Porter, we have been running the brackets for the Scumbag Registry, National Scumbag Registry for Stansberry, and we are down to the final four. I know, last week, you lobbied hard to get Corzine. He didn't make it, buddy. He was edged out by Pelosi, Holder, Obama and Paulson. Now, Paulson, I would see him equal to Corzine. What are you thoughts on the final four?
Porter Stansberry: Yeah. Yeah, I agree with you. Paulson is a gigantic scumbag. And you know what. I don't want to waste a vote on the big three. I just don't. I mean there's no doubt that Pelosi's a giant scumbag and Holder's a giant scumbag and Obama is a giant scumbag. But I don't know, I don't – I'm rooting for the guys who sort of really get their hands dirty, not just the guys who are the figureheads of the scumbaggeries.
Aaron Brabham: Yeah, like Paulson when – I think it was pretty much us that had – well, the only media to really cover the story about Paulson having those hedge fund meetings after he testified to Senate.
Porter Stansberry: Yeah, that situation was very important to me, personally, because I had stuck my neck out and said that Fannie and Freddie were zeros. And, in fact, I said that they were worth negative $500 billion, and I was far more right than what Paulson said. And Paulson got up in front of Congress and said that they were sound, that these companies had sound capital structures, which is a dead lie.
And then, meanwhile, two weeks later he goes in a private meeting with 20 hedge funds and said, "Yeah, they're gonna go to zero." So there's a classic situation of the rich and powerful getting access to inside information that they could use to make billions of dollars, while taxpayers end up on the hook – I think the total bill now from that bailout is over $200 million.
It's just classic government corruption, and that kinda thing should never go on in America ever. And when it does, the person who's responsible should pay. And has there even been an investigation of that meeting? Have you seen any federal prosecutors grandstanding Henry Paulson, walking him out of his apartment in handcuffs? I don't think so.
Aaron Brabham: No. As a matter of fact, the story was run for, like, one day and it was never even talked about in the mainstream media.
Porter Stansberry: Yeah. So who do they arrest instead in the mortgage debacle? Well, they arrested the poor schmuck from – the poor guy from Behr, the guy who bought all the down mortgages just 'cause he was an idiot. He wasn’t – he wiped himself out. The guy was worth $40 million and then he was broke 'cause he had all of his funds – he had all of his money in his own fund.
He wasn’t doing anything fraudulent. He was just doing things that were stupid. So they arrest him. And, meanwhile, Paulson and Fannie and Freddie, who were the architects of the entire problem – without whom we would have never had a mortgage bubble – they go away scot-free, even though they did the insider trading on top of building a mortgage system that was completely insane.
Aaron Brabham: Next topic, Porter, you just can't make this stuff up, one of our favorites, GMOs. Mark Lynas spurred the anti-GMO movement in the mid '90s. Well, recently – this is about a week ago – Lynas said he was wrong all along. This is what he said. Quote, "I want to start with some apologies. For the record, here and up front, I apologize for having spent several years ripping up GM crops.
"I am also sorry that I helped to start the anti-GM movement back in the mid-1990s, and that I thereby assisted in demonizing an important technological option, which can be used to benefit the environment –" blah, blah, blah, blah. Well, guess what? He received tons of death threats for his apologizing. But well, Porter, looks like you [break in audio] right.
Porter Stansberry: Yeah. So every time I talk about GMO stuff, right, I get the same death threats. So I don't understand these people. I really don't. Like they have some kind of problem with evolution and improving nature, but they’ve got no problem with threatening the life of someone who's just giving his opinion. I mean it's just crazy.
Aaron Brabham: Yeah. And if that's not enough, the FDA is on the final stages of approving salmon, genetically modified salmon, a/k/a the Franken fish. And you know FDA is tough when it comes to getting through all of their trials and everything. So come on people, just get over it. You're eating it all the time. You're fine; you're living. We can just move past it.
Porter Stansberry: Well, I think it's gonna more important than that. And the fact is, without GMO crops, you'd have a lot of people starving because we simply don't have enough high-quality land and fertilizer to feed the world without them. And that's what no one wants to – that's what none of the people in the GMO side, they want to – or the anti-GMO, I mean – that's what none of them want to face.
If you follow their arguments all the way to its final conclusion, what they really want is they want one guy, a mule, and 40 acres. Well, that's not gonna work in most places because the population density is way too high. So if we want to feed everybody, we do have to have industrial farms. And if you want to have industrial farms that are productive and profitable, where you can have food at a very reasonable cost, you're gonna need GMO seeds.
It's just that simple. And by the way, GMO seeds are a much better alternative than more pesticides and lots more fertilizer. I mean that way there's less runoff for fertilizer in the rivers, there's less poison on our foods. There are tradeoffs that you make in an economy and in the modern world. And I would much rather have genetically improved crops and even animals, than have more pesticides and more pollution.
It seems pretty reasonable to me, especially when you can't even tell – scientifically, you can't tell which crop is modified and which isn't. I mean there's no difference at all. So if you make a loaf of bread out of genetically modified wheat, you cannot tell that bread at all. It's indistinguishable from bread made from organic wheat. It makes no difference.
So, I don't know, that's – I'm not surprised that the facts and the reason don't persuade the entire audience. Aaron, one of my favorite sayings is people will believe absolutely anything. And the GMO situation is a great example of that, and I thought the news that you came up with is excellent.
I've also seen a lot of the same thing from climate – from people who used to be global warmists, who are now climate skeptics because [break in audio] the science are getting that up. And they were honest and had integrity, and said, "I just to believe this was gonna be a problem, but now I don't think so and let me tell you why."
And then, of course, as soon as you switch sides in a debate like that, it's the same thing. People threaten your life, your funding gets pulled, you're out of a job. There is no true academic independence. It's all politicized and it's a shame. It absolutely is.
And I think that's why Mark Lynas came out and basically renounced everything. 'Cause he realized how important it is to feed the world, and he realized that he's probably going a little bit over the top. So he basically said, "I finally embraced science and I understand it's environmentally better than the alternatives out there."
Porter Stansberry: Hey and look. There's one little thing about this that could really rattle everybody's chain. Remember when I recommended Monsanto in my newsletter – I don't know, two or three years ago now.
Aaron Brabham: Oh, I remember.
Porter Stansberry: And everybody went bananas.
Aaron Brabham: Oh, yeah.
Porter Stansberry: Well, I think we recommended it around $50.00. And I think it just doubled. I think it's over $100.00 now. So if you like making money and you want food to be cheap and plentiful, you can invest in Monsanto. If you want to be an alarmist and live your life believing stuff that makes no sense, and you want to be emotional and threaten everybody, go ahead. But I'd rather make money and have cheap food for the world. That's just me.
Aaron Brabham: I agree with that, Porter. The great state of Illinois has proposed a piece of legislation, Bill SB 3341 is known as the Precious Metal Purchasing Act. Essentially, what they want to do is not allow people to buy any more coins for cash. They have to document the payments, and this is the start of a tracking. And this is a kind of a concern for me. I hope it doesn't catch on and I hope it doesn't become law in the state and somehow sneak into Congress.
Porter Stansberry: I think this is way scarier than what's happening with the new gun control laws, I mean way scarier. And the one thing I would just tell people is, if you've been waiting to buy gold 'cause you weren't quite sure what was gonna happen, you gotta do it now.
And I'm telling you this because it will – the moment they announce capital control or the moment they announce that the sale of bullion be restricted, not only will the price go sky high, but you will not be able to get it inside the United States, and that will make acquiring it much, much more difficult, if not impossible. And if you don't believe now, I guarantee you will believe me later.
Just look what Germany is doing. So, Aaron, one of the things that I've been expecting in my "End of America" thesis is that gold would become the new international currency. It would become the currency of trade. So in order to settle account balances between countries, you need a neutral currency that both parties can respect. And that's the reserve currency and, as you know, since World War II, that's been the U.S. dollar.
And as the dollar falls apart, I've been looking to see what would replace it. And we've seen some steps. Russia's been buying tons and tons of gold. China's been buying tons and tons of gold. But now, one of our firm allies, Germany, is repatriating most of the gold that they keep in storage with the Federal Reserve. This is a clear indictment that German no longer trusts the Fed and no longer trusts the dollar.
Aaron Brabham: Yeah, Porter, I did read that story. And what's interesting, too, is I dug a little bit deeper. And, apparently, they are also going to smelt down some of this gold because they are even questioning if the Federal Reserve was holding what they consider pure gold that was theirs, and if these tests come back as a little bit shady, that could crumble the central banking system to a certain degree. Plus, they're taking all their gold back from France 'cause they don't trust them either. Is this a big tipping point for what's going to happen next?
Porter Stansberry: I certainly believe it is. And I think if you're sitting there and you haven't bought gold yet, and you've been thinking that all this is just gonna pass us over, man, you better really – you better check yourself. Because this is an ally of ours, and they're saying that "We don't trust you anymore at all." And if Germany – they don't – the Fed, of course, has never been audited. We don't know what's in there.
We don't know whether or not this gold is sound, if it's – what are they, 79 purity or whatever the standard is. And if we find out that it's not; if we find out that the government's been screwing around with the gold reserve, man, you talk about an instant, instant run on the dollar. It would be an absolute overnight catastrophe. Now, I don't expect that to happen. But that is certainly an outcome that's possible, and I think you have to be prepared for it.
Aaron Brabham: All right, Porter, I want to get your quick thoughts before we get to the voice mails and the mailbag and wrap up the show. I want to get your quick thoughts on the AIG story, about them looking to [break in audio] the government.
Porter Stansberry: Well, I tell you, my attitude – or my view – on this is not gonna be positive. People are not gonna like this when I say this. But I absolutely believe that the government acted recklessly in regards to the AIG bailout. And I believe that on several fronts. I don't think that they should have ever bailed out a private company, and I don't think that they should've expanded the currency to save any of the banks.
I think that the banks should have been allowed to fail, and I think the depositors should have taken it on the chin. That's the way capitalism works. That's the way it's supposed to work. Now, having said all that, I think it's very important that you not allow the government to abuse contract law. And if you look at what happened in the GM and the Chrysler bailouts, there is no question that people's property rights were abridged.
There's no question. There's also no question that the property rights of the investors in AIG were completely trampled on by the government. The funny thing is, of course, is that if the government hadn't done what they did, AIG would have almost surely failed and the owners of AIG would’ve been even in a worse position.
So it's hypocritical of them to sue the government which helped them, and then say, "You helped us but you trampled on our rights at the same time." I get that. I understand that's hypocritical. But I don't think there's any excuse to allow the federal government to do things that are expressly against the law, and especially in terms of honoring contracts.
So I have a really strange angle on it. I'm sure it sounds like I'm trying to play both sides. But what I'm saying is, number one, it shouldn't have been bailed out. Number two, if it was gonna be bailed out, then the rights of the shareholders of AIG ought to have been respected and they weren't.
Aaron Brabham: Yeah, that's – you've written about that extensively, especially with GM and how the bondholders and shareholders got completely hosed, while the unions ended up reaping all the benefits and GM still owes tons of money to them.
Porter Stansberry: So, you guys, anytime you see the government acting, you have to always ask yourself, "Who benefits, cui bono, right?" And was it really the shareholders of AIG that benefitted? Hell, no. Look at the share price of AIG. Pull up a ten-year chart of AIG and explain to me how the shareholders of AIG got bailed out. They weren't bailed out. The stock is still down 97 percent from its peak, right. On a split-adjusted base, the stock's gone from $2,000.00 to $34.00.
Aaron Brabham: That bad.
Porter Stansberry: The shareholders of AIG were not bailed out in any way, shape or form. So who was bailed out? Well, the creditors of AIG were bailed out. And who, my friends, are the creditors? You can go back and read the October issue in 2008 of my newsletter. And it's called "The Secret of September."
And the secret of September was the government bailed out Goldman Sachs. And they bailed out Goldman Sachs because Goldman was the chief trading partner, and was the guy who was on the hook for all of the AIG credit default swaps. Now, here's what I'm telling you. The shareholders of AIG should have been allowed to negotiate with their creditors.
They should have been able to go to Goldman and say, "Hey, you were idiots for lending us $185 billion that we disguised in insurance contracts that we both knew were not worth the paper that they're written on. So you made a terrible underwriting mistake, okay. And so now we're gonna have to sell for an amount that we can afford."
And if they had done that, Goldman would have absolutely been wiped out, but the shareholders of AIG would have ended up a lot better off, much better off, because they wouldn't have had to pay their creditors dollar on dollar. They could have come to some kind of an agreement, some kind of settlement. And the government took that right away from them in order to make sure that Goldman did not suffer any credit loss. And that, my friends, is a travesty.
Aaron Brabham: All right, Tim. I believe we have a couple of voice mails. Or maybe we don't.
Voice mail 1: That scene was amazing. For the last show with Dan Ferris, he seems like a really smart guy. But I couldn't understand when he was saying how diet is not important. And it doesn't matter what you eat or drink or put in your body, you're not gonna live a second longer. That seemed kind of stupid, and I just thought you guys would do more talking about that.
Aaron Brabham: Yeah. So, Porter, when you were out, Dan accidently threw down the gauntlet on all this diet stuff is crap. But Dan's in pretty good shape.
Porter Stansberry: I pretty much agree with him.
Aaron Brabham: Yeah, well look. I refuse to take vitamins. I used to. It's a complete waste of money. And a lot of – and that's a multi, multi, multi-billion dollar industry. Start there.
Porter Stansberry: Well, look, we're gonna upset everybody out there. What I'm gonna tell you is that – listen very carefully to what I am saying. If you have a weight problem or if you're sensitive to sugar or if you're addicted to alcohol or drugs, yes, you have a serious health problem, okay. But for folks like Dan Ferris and Aaron Brabham, who are in good health, it doesn't make much difference as long as they remain active. It just doesn't. Calories in, calories out.
And they're gonna get enough nutrition because they have a relatively balanced diet. That's – I don't want people to think that I'm saying it doesn't matter at all. Aaron, if you started eating nothing but Snickers bars every day, you're gonna have some health problems. What I am saying is that the people who go to the other extreme and, for example, Aaron, like my wife, she eats nothing but like horse meal.
Aaron Brabham: Like what?
Porter Stansberry: So these smoothies and things. It's just crazy. And the people who go – Steve Jobs for example. I can't prove this, but I believe that one of the reasons why he ended up with pancreatic cancer is because he would go on obsessive diets. For like a year, one time he ate nothing but carrots, and it literally turned his skin orange. And when you screw with your body like that, you're taking chances.
So how about everything in moderation, okay. But the other thing I want you to think about is there's been a lot of research that says if you make it to age 50 in relatively good health – in other words, you don't have high blood pressure, you don't have skyrocketing cholesterol, that kinda thing.
If you make it to 50 in relatively good health, and you do everything wrong from that point forward – you smoke, you drink, you eat fatty foods, your don't exercise – you're life expectancy is 82. If you do everything right. If you run every day and you eat nothing but healthy foods and you stay out of the direct sunlight and you don't smoke or drink, you live to 84.
Aaron Brabham: I don't care about those extra two years. I'm gonna enjoy life after 50. This sounds like a fantastic research.
Porter Stansberry: So there you have it. That's what I can tell you. Now, how about this? How about we eat the foods we enjoy in moderation, and we stay active with exercise and activity that we enjoy doing, and we have a happy life and we don't obsess over it. How about that? Is that a happy medium?
Aaron Brabham: Sounds great to me. That's what I'm trying to do. Tim, any more voice mails?
Voice mail 2: I just wanted to thank you really quickly. You guys have taught me, listening to this radio show, how to make money in a way that I never knew. I actually went out, tried my first selling on the naked put. It happened to be Caterpillar, about two months ago. Sold the naked put at $85.00. Cat was trading at around $87.00 at the time. But they looked pretty good. Talking about $500.00 premium on it.
Worst scenario happened. I got called on my put and, all of a sudden, I owned 200 shares of Caterpillar. But I looked back at it, took your advice. I had the stock at a price that I really liked. And, today, it is currently trading at $95.00 a share. So I made $500.00 from selling the naked put, plus I'm up $10.00 on each share. Thank you, guys. You're information is invaluable.
Aaron Brabham: Congrats to a listener who actually attempted some – a strategy that works very well.
Porter Stansberry: Yeah, let me – I've been thinking about this. The readers have really challenged us on our negative view of Herbalife's business model. A couple of successful Herbalife distributors have been sending me crushing e mails, saying that "Herbalife is like any other business. Very few people succeed at it, but it's possible to succeed 'cause they have done it.
Now, I'm not gonna get into the Herbalife thing right now 'cause that's a whole nother can of worms. But what I want to tell you is if you want to be successful as an investor buying stocks, you should learn how to sell naked puts. Because if you learn how to sell naked puts and you can get approved by your broker to do it, it will increase your win rate dramatically because it allows you to buy stocks at a much lower price, and to get paid to do so.
And that caller just learned that technique. And how this is different than Herbalife is, well, apparently, 97 percent of the people who tried to make a success at Herbalife fail. But I would bet you that the odds are exactly the opposite for people who try to learn to sell puts. And this goes to my idea that, in business, if you are not actually able to benefit your customers, your employees and your partners, you're not long for this world.
And that's been my problem with Herbalife. I don't think that in the long run most people who interact with Herbalife, either as distributors or as customers or as shareholders, are gonna do very well, because the Herbalife doesn't actually really deliver any benefit at all. It's just a bunch of smoke and mirrors.
Whereas, if you read our newsletters and you take our advice, there's no doubt that you will become a better investor. We can truly help you succeed. And one of the best tips we could ever give you is to learn how to sell puts. And I'm very happy for this subscriber. He tried it and was successful, and I'm pretty sure that if any of you will try it, you're very likely to be successful.
And there's just two simple keys. One, never ever sell a put on a stock that you do not want to own, period. Two, never sell a put at a price that you are not happy and thrilled to pay. So pick a stock you want to own, pick a price that you're actually happy to own it at for the long term. And every bit of premium that you get, therefore, will be free because you are happy and willing to own the stock at that price in any case.
And if you do that, there's really no way you can lose. Either you're gonna get paid 20 to 30 percent a year for selling puts, or you're gonna end up buying a whole bunch of stock that you wanted to own at prices that you agree are very favorable.
Aaron Brabham: Yeah, that's great advice. I know that since I started selling puts, man, it's hard for me to do anything else. And if I get put a stock, I can still draw income off it if I want to by writing a covered call. Or I can just keep it and go along. But, either way, I can lower my cost basis consistently if I choose to do that. It's a great strategy, and I know that's one that Doc Eifrig has done fantastically with Retirement Trader.
Porter Stansberry: Yeah. And we're actually pairing that strategy with a call-buying strategy in Alpha. And that's the best kind is the way I see it. Of course, that's why I put it in my trade strategy for you. Well, that's the best outcome because, that way, you are giving yourself a possibility of an enormous upside while you're able to buy the call for free. And you still get a net credit. So you end up getting paid to buy the stock and you get the call for free.
It's a spectacular strategy and I hope people take a look at it. There's lots of ways to lose money in options, and that's why most people think that options are just dangerous and reckless and only for people who are speculators and a little bit crazy. But structured the right way, options are fantastic, even for individual investors. And I hope that people will take a look at it, we'll get them looking.
Aaron Brabham: That's how the pros trade. And your Alpha is off to a fantastic start. Congratulations on that, Porter. And we'll send out an offer for sure to all of our Stansberry Radio listeners 'cause it's a new service. Okay, let's go to a few e mails, then we'll wrap the show. Dan, the Man, a new listener, wrote, "An outstanding interview. This was the Epstein one. I found you guys through http://www.financialsurvivalnetwork.com – thank you for putting our podcast up there and will listen again.
"You guys can keep your stocks, bonds and futures until scum like Corzine go to prison. If I can't stand on it, kick it, pick it up, throw it, fling it, eat it, or break its kneecaps, I don't consider it an investment. It is extremely interesting being an investor without the major markets on the table, and a lot of fun." Hard ass, that guy here.
Porter Stansberry: Nothing wrong with that, if that's your area of expertise. I encourage people to stick with what they know first, first and foremost. And the truth of the matter, Aaron, as you know, I haven't personally been buying stocks for several years because I have such great opportunities in real estate. And when I can make 20 percent plus in real estate deals or buying apartments outright with no debt at all, cash to them, I'm gonna keep doing that.
So it's okay with me if you have a different expertise and that you don't have to buy stocks. In fact, I would tell you that, in general, that being a passive investor in a company where you have no control is among your worst choices. I would always favor areas where you have control. But, unfortunately, most people don't have access to those kinds of good deals, and most people don't want to be involved in running a business. So that's why stocks are so popular.
Aaron Brabham: Here's a question we get asked often, Porter. Don asks, "Can you talk briefly about why there's a bond bubble and why it will pop? I just don't understand why we're in a bubble and why were in badly and dramatically. Is it not possible that rates will rise gradually and bonds will become less attractive gradually, and, therefore, not be a pop or burst?"
Porter Stansberry: That's a hard question to answer sincerely just because the bubble in bonds seems so completely absurd to me. The reason why you know there's a bubble in bonds is because interest rates are wildly negative, and it doesn't make any sense to lend money to a bankrupt government that's not even gonna pay you a viable rate of interest.
And I kinda just would like to leave it there because there's so much overwhelming evidence that sovereign bonds, particularly U.S. and major Western European bonds, are in a bubble. And then if you look at corporate bonds, the evidence is that there's never been a lower nominal rate for junk bonds in history.
So we're at all-time lows and nominal rate. We're at nearly all-time lows in spreads, and we're at all-time records in issuance. So there's a reason why all these crappy companies want to borrow all this money right now, and the reason is 'cause there's a huge, huge, bubble-like demand in fixed income. That's all I can say about it.
Aaron Brabham: All right, two more. Matt asked, "I like the idea of getting completely out of debt. I've been working on it for a while and only have mortgages left on rental real estate. Would you recommend –" and, by the way, we can't give individual advice. This is a general question though. "Porter, would you recommend somebody taking the penalty for withdrawing money from a 401(k) or IRA to pay off their debt completely?"
Porter Stansberry: No. I would never recommend anybody taking a – paying a penalty to get their money out of a 401(k) or an IRA. I think that's the sign of financial desperation, and I would never advise anyone to do that. I mean under any circumstances, even if it meant you had to go get a second job to pay your bills. That's better than raiding your retirement accounts just as a matter of principle.
But the other thing I would tell you is that there are a lot of people out there who have made a lot of money with debt, okay. And the way you make money with debt is positive carrying. It's very simple. You get a higher yield on the yield you're paying. So if you can get a mortgage on property for 4 percent or 5 percent or 3.5 percent even, and you can get more than that for it, then you can make a lot of money with debt.
There's nothing wrong with doing that. If you're confident in your approach and you have some experience, you can probably be successful. My problem with it and the reason why I, personally, don't do it is because I don't believe that the rules of the game are gonna remain the same.
I know that if there is a run on the dollar or there is a true collapse of credit in the U.S. – and I expect there will be – I know for certain that the government is not gonna continue to allow people to make money on positive carry. They'll find a way to wipe you out.
The way the did it in Argentina was they simply took all of the cash in your savings accounts and your checking accounts and your 401(k)s, et cetera, and they turned those all into worthless pesos. Meanwhile, they kept all your mortgages and the same dollar – firm dollar currency – so you got completely upside down in all the money that you've borrowed.
Will that happen here? Of course, I don't know for certain, but I just don't trust it. I don't trust the banking system. So I would rather not owe them anything, and I'm happy to take a loss – or not a loss – but I'm happy to make less money on my real estate investments 'cause they're not leveraged at this time. That's just me.
Aaron Brabham: Yeah, that's good advice. All right, Porter, one more thing. We have Tom Webb on our Facebook wall. I know you and I ran – I ran this passed you and you ran it passed me was that "Representative Jose Serrano of New York proposed the repeal of the 22nd Amendment. People kinda laughed at your third term. And, of course, you weren't saying he really would get one.
"But you know what, this piece of legislation has hit many different times over the years. This one, though, could get a little bit of traction. I don't think it's gonna happen, but the piece of legislation is out there to repeal the 22nd Amendment."
Porter Stansberry: Well, that's obviously no surprise to me at all. And I don't think that – people who want to laugh at the idea that Obama could have a third term can go ahead and chuckle, but I'm happy to stand behind that prediction.
What's happening in our country has moved to despotism, and with enormous amount of natural gas and oil revenues heading to his administration, there's no telling what he's gonna do. And just 'cause they don't change the 22nd Amendment doesn't mean he can't have a third term. He could run his wife, Michelle Obama, like they did in Argentina with the Kirchners.
Or he could do something like Putin did, where you put up a dummy. You put up a puppet in your place, like Eric Holder, and you take another job in the administration. Obama can become the secretary of the treasury or the secretary of the interior or the secretary of commerce or he could pick any title he wants, and everyone would know he was still in charge.
So I don't think that Obama has any respect whatsoever for the constitutional law of the United States. And I think if you look at everything his administration has done, there's plenty of evidence of that. You combine that kind of massive political ambition and egotism with a huge flow of tax dollars and royalties from all of the natural gas and oil wells that are U.S. Federal lands, and you're gonna have a tyrant. And I'm happy to stand by that prediction.
I certainly hope I'm wrong, and if I am wrong, I'll be relieved. But that's just not the way history works. When people like Obama get a hold of an extra $500 billion a year in oil revenue, who the hell knows what's gonna happen. I'm not saying I know all the details, but I know one thing. He's not gonna just retire and slink off into the night.
Aaron Brabham: No, he's not gonna do that. Well, that's our show – actually the never-ending recording show, for this week. We appreciate you all listening to Stansberry Radio, and we want to give a big, special thanks to Alex Jones for joining us.
Next week, Porter, I look forward – I hope you're on the show, 'cause I look forward to you debating Mike Shedlock. He runs a blog, and I know a lot of our listeners really love this guy. But last time we had him on last year, you were out and he really didn't know anything about shale oil and still believed in peak oil.
I'm hoping he's done his research by this time, because even last year things weren't near as clear as they are now. I look forward to you giving him a debate on the peak oil thesis.
Porter Stansberry: Oh, he can't possibly still believe that. But I can certainly rag on him for having once believed it.
Aaron Brabham: Right, even as recently as last year. All right, and if you're not on our mailing list, please join our mailing list at http://www.stansberryradio.com. If you're on Twitter or Facebook, you can find us, Stansberry Radio.
Porter Stansberry: Hey, one thing before we go. Next week, Aaron, I want to talk about the whole Catfish thing that's blown up in the media.
Aaron Brabham: Yeah, yeah, yeah, yeah.
Porter Stansberry: This is completely fascinating to me. So next week, tune in for our take on Catfishing.
Aaron Brabham: I love this, and I've actually watched some of those MTV Catfish shows. It's the most bizarre thing I've ever seen in my entire life. And especially with the Notre Dame player, it's out of control. So yeah, we'll do that for sure. As always, give us a call. 855 SARadio, 855-727-2346. We'd love to hear from you. Thanks again, and if you enjoyed it, pass us on to your friends.
[End of Audio]