A Complete “Decimation” of the Financial System is Upon Us; Why This Time It’s Different
“Physical economy is basically the same and there’s a one new ownership, which is really disheartening,” says David Morgan, founder of The Morgan Report. In an interview with Daniela Cambone, he emphasizes that while a financial reset entails a change in ownership dynamics, it doesn’t interrupt economic activity; rather, it recalibrates ownership within the existing physical economy. He also advises investors to prioritize the intrinsic value of gold over its face price, recognizing its stability amid financial uncertainties. Lastly, he concludes the interview with a piece of life wisdom. “In the turmoil of financial uncertainty, the true wealth lies not in what we possess, but in our resilience to adapt and persevere.”
CHAPTERS:
00:00 Financial collapse
5:43 Wealth taking away
8:31 How to be prepared
12:54 Gold price
16:12 The value of gold
18:44 Fed interest rates cut
21:35 Life wisdom
TRANSCRIPT FROM VIDEO:
Financial Collapse
00:00
We don’t have anything left. They own it all. You want to be outside the system at some level. Yeah, you probably don’t want cash in the bank. Where we are right now is a curious place. It is global. What’s driving the price of gold? The bankers know what’s coming. Gold doesn’t change. The depreciation of the dollar does. You know, the great reset, what they’re really talking about.
00:32
This is Daniela Cambone and welcome back to the Daniela Cambone show here on ITM Trading. And we are back with a fan favorite, David Morgan. He’s obviously widely recognized in the precious metals community and I’m sure you’ve read or seen him from the Morgan Report. David, always good to be with you. Always appreciate your thoughts on the economy and of course life. Well Daniela, thanks for inviting me back. It’s good to be with you.
01:01
I had seen a recent penning of yours where you talk about the current crisis we’re living in, whether you think it’s a buildup or an entirely new crisis altogether, but that you think it could actually bring down the entire financial system. And I think I’ve known you for a very long time, David, but to hear you talk about a complete shutdown of the financial system obviously got me very interested in your latest thoughts here.
01:29
I think the last time we spoke was November, so let’s just do a touch base here because I would argue a lot has changed, but nothing has changed in terms of the economy. Would you not agree or disagree? I’ll go into it. So first of all, when you hear those words, a complete, you know, desolation of the financial system, you’ve got to put it in the proper context. And so let’s say there’s a complete decimation of the current system.
01:59
I don’t think it’s going to go that far, but let’s just go that far. What happens? Well, what happens is that all the wealth stays in place. So all the schools, all the churches, all the department stores, all the automobile factories, all the automobile salespeople, used cars and new cars, everything that exists in the physical economy stays in place. So nothing goes away. So it’s not like the physical economy disappears.
02:27
which is a connection a lot of people get when you give the idea of a financial collapse. So you have a financial collapse and the physical economy is exactly the same as it was the day before. So what takes place? Well, basically what takes place in a very broad brush idea is the ownership changes. Basically anyone that is over leveraged, you cannot meet their payments, meet their bills, make their car payment, their house payment, their lease payment on their auto dealership, their…
02:55
the warehouse or whatever it is, has to mark to market what they have and put it at the market, which would be hugely deflationary in most instances. The ownership changes and then things can restart. Now, that’s a very broad-brush view, but I don’t want people to panic that everything stops. It doesn’t. It really takes place in almost all instances, except in very long ago instances
03:25
basically do a currency reset or a monetary reset. And again, the broad brush stroke on that is you go from a fiat failure to a gold standard. And then you morph back to a fiat system and that fails again, and you go back to a gold standard. Again, a very broad brush view, but pretty much in a nutshell, how the systems go back and forth. So where we are right now is a…
03:52
Carious place because not all it’s not a one nation state. It’s not the one our Republic. It’s not Argentina. It’s not Turkey It’s not you know, Argentina it is global Now the bricks have mitigated the problem somewhat By trading with each other’s currencies and really circumventing the dollar But all those dollar debts to all these third world countries and other nation states first world countries still exist It must be paid back in dollars. So I see it as what the
04:22
The Davos folks and others talk about the great reset. What they’re really talking about is resetting the financial system or the monetary system to a new paradigm where they can actually wipe out or mitigate a lot of this debt that’s owed between themselves and between investors and investment banks and on and on it goes and start over. So again, the physical economy really wouldn’t change that much other than who owns it.
04:50
Well, that’s really the biggest question of all, because who owns it? If you look at what David Rogers Webb and I have talked about, he’s done many interviews. I really enjoyed that interview. And he seemed to like it as well. I gave me a nice compliment. Forget me. The principles are more important. But that’s part one. And part two is what is the end of it? And that’s given us to buy the WF. You’ll owe nothing and be happy. So if you look at those two perspectives, I’m not saying I agree that it’s true.
05:20
But we’re certainly getting very strong, clear indicators that the elite want it all and we don’t get anything. So the ownership change is we don’t have anything left. They own it all. Physical economy is basically the same and there’s a one new ownership, which is really, really disheartening. Of course, I’ve spent my whole life trying to mitigate this type of a situation, as you well know. Yeah, I absolutely know that. And I’m happy you brought up David Webb because I know, obviously I know I’ve interviewed him.
Wealth Taking Away
05:49
You’ve interviewed him to his point about how they will come for us and take everything, your house, your car, whatever’s in the bank, everything. How much of that do you see happening? Are you 100% on the page with him on that? No, I’m not. I don’t think it’ll actually happen. I think Martin Armstrong makes a great case about, let him try it.
06:18
I think there’s going to be enough pushback and probably rewrite the contract, if you will, from the way it exists. I think Webb has it correct. I mean, I don’t argue facts. I mean, I’m convinced reading it enough times that that’s what it says at law and they have the legal ability to do it. But I think there’s, as I just said, enough pushback where it’ll be rewritten and that when we get full property rights back like we really had.
06:47
in the beginning of the revolution in the United States? Probably not. If you really want to examine this, and I’ll go a little bit deeper, but the idea of free men and women is really the right to free property or property rights. But you really don’t have property rights per se to the extent that most people think they do. Quick example is if you paid off your mortgage and you own your house outright.
07:16
In almost every jurisdiction you can imagine, you don’t really own it. Well, like, how is that? Because you own the… You don’t have the mortgage, you don’t have the debt, but the land basis is owned by the state and you must pay property taxes because you have the privilege of having your house or your apartment or your duplex on basically their land and you have to pay rent to them. So do you really own it? In fact, no.
07:46
If you have your house paid for and you quit paying your property taxes, you’ll find out pretty quickly who really owns it. So that, and that idea in my opinion is wrong. We want a low deal title. When we buy our car, we don’t want the manufacturer certificate to stay at the state level, and you just get a certificate that says you’re registered owner, which is as Webb has pointed out. I don’t think he did it in the book. I read it, but that you have a beneficiary, which is as good as ownership.
08:16
Until it’s not, which means, you know, they could come take your car, even if it’s paid for.
How to Be Prepared
08:23
It goes very deep. I went a little deeper than I wanted to but it’s all can be factual. It could be no No, no, no, and I love how you know whether you agree with you know, what I you know web or not For you David I know because I’ve known you for so long you you you take you take steps to to safeguard and Protect your wealth your investments your money
08:51
You’re one of the first to really sound the alarm on you know This is before the banking crisis and I know I’ve mentioned this before but about the money in your bank and even for me David you really made me aware of that. Well, actually that’s not mine and just this week I had an incredible interview with Clive Thompson. Not sure if you know him David, but he has over 50 years Experience in Swiss banking wealth manager and he was telling me yeah, you probably don’t want cash in the bank
09:21
So here’s a true insider from the banking system now saying it, whether you’ll lose that money or not, it’s just about being prepared. So talk to me a little bit about things David Morgan does to be prepared for how however the reset will shape out to be. Well, we want security. I mean, money represents security for most people. I mean, the whole idea of like,
09:50
retirement, if you have enough savings or some type of investment portfolio that you can live off your interest or your savings. Even if you’re halfway through your labor years, you’re 30, you plan to retire at 60, you still want that buffer. Having savings of some type mitigates a lot of problems. You have a health issue, you lose your job, unexpected expense comes or whatever. The idea is very sound as far as…
10:19
having some kind of a buffer. The problem is, is you outline that you’re really not as safe in a bank as you think you are. You are an unsecured creditor and the bank really owns your money. Now, on a practical level, I’m not trying to scare anyone. In most instances, you’re going to get your money back, but you’ve got to look at it deeper like David Rogers Webb did and say, well, what’s that law? What’s the worst case if Morgan’s right and we get closer to the financial collapse? It’s not the whole world. It’s not even-
10:48
The whole country is just certain banks. This bank goes down. The law still applies. So let’s just make up a bank called ZYX Bank, fails. And everyone that has an account there gets bailed in. That’s what the law says. Well, their neighbor doesn’t care because he’s at ABC Bank. But that individual that was at the other bank has lost everything at law. So the point is,
11:16
you want to be outside the system at some level. That could be physical cash. I mean, everyone still uses in the US Federal Reserve notes. What’s interesting is you can’t even use cash in some instances anymore. I mean, there’s some like coffee shops, you can’t use cash, you got to use a debit card or credit card. And so they’re mitigating that right. The other place is of course, precious metals. And that is outside the system and universally recognized and worldwide.
11:46
The problem with that is it’s high net value. I could put $30,000 in my front jeans pocket between my two pockets in gold coins and really no one would notice. I can’t do that with silver, but you can with gold or platinum. Now you’ve got to negotiate it. You’ve got to find a price. So it’s a bit cumbersome because it’s not readily acceptable. But if you go to first principles and you look at where silver really got its roots,
12:16
It was the money of the people for the people by the people. And that was his primary function was money. So how do we put that into the modern era? And you do it through the new technology called blockchain. So if you have silver on your phone and you can do it by the grams, so you can get the equivalent fiat down to the third or fourth decimal point, now you’ve got something very powerful. So if you could put that back into the monetary system and you can, all we need now is education and adoption. You can educate enough people.
Gold Price
12:45
about being outside the system with real money and how easy it is to use. And now you can really push back at them. Let’s take a step back. You mentioned gold and silver. So let’s talk about the all-time highs we’ve seen in gold. I wanna get your thoughts on the price action because you point out there’s really been no movement on the gold ETF side. And also in speaking with large wholesales.
13:13
Wholesalers at a fund manager you say that the business is basically static. I’ve also heard this from my friends in the business So there’s no movement on the ETFs. We’re not seeing movement, you know in terms of wholesale’s so What’s driving the price of gold or maybe it’s just not here in North America and it’s all in China David Morgan’s take Well, some of it is from Chinese buying but it’s primarily algorithms and paper trade
13:42
That’s the crux of it. And why is that? That’s a deeper question I really can’t answer. I suspect that the bankers that large know what’s coming. They’re really only defenses to do what I said earlier on the broad brush view. What happens during a collapse? Fiat fails, you go to gold. And so they, the central banking community, has been taking on gold the last couple of years at a very rapid rate.
14:12
And now maybe they want to mitigate a further, let’s say, blip in the system, still believing they’re all powerful or not. They might take a futures position that will take, you know, gold at a $2,000 level and see it go to 2200. I mean, I just checked the charts as on a little TV show. So say little is on a Mideast television program this morning, giving a gold update for them. And, you know, 22 trading days go from
14:41
$1,224. A $200 increase in 22 trading days, even on the gold market, which is fairly large, is substantial. And this shows you nervousness in the market and who’s doing it, I’m guessing, it’s probably the smart money that wants to buy that cheap $2,000 gold. I want to go a step further. When I wrote one of my first pieces on the internet called Engineering the Price of Gold, people always want to know, well, what is the price of gold?
15:10
When do I sell it? And they sell it when you sell it when you sell it. But the theory is how much gold is there versus how much paper is there. I use M zero, the true money supply. If you do the math, dollar and gold, it’s how many dollars per ounce of gold, came out $2,500 an ounce in 2002. And we’re only at 2200 now. If you do that same exact math, the supply of gold in the treasury has not changed.
15:40
That’s a constant and gold is constant, both constants. But what has changed is the M0, the base minus supply. You know what the number is now? It’s nine times higher. It’s almost $20,000. So, you know, so it’s a moving target. Gold doesn’t change. The depreciation of the dollar does. And it’s been a ninefold change since roughly 20, 23, 22 years ago.
The Value of Gold
16:10
So to your point, right, when people looking at the price action, maybe investors who’ve never been in gold or silver, they’re looking at the gold price thinking, well, it looks too high here and they’re on the sidelines. What do you tell them? Well, what I just said, I mean, it’s a relative, it’s a moving target, so it’s hard to aim correctly because you see this, it’s a new high, but 2200 adjusted.
16:39
for today’s inflation would have to be much, much higher to be equivalent to 850 on my birthday when I was 27. Gold hit its all time high on my birthday in 1980. I think I’m in the right business, but I’m trying to make a joke. But the point is, you don’t wanna focus too much on the paper price. And we all do, even I do at times. But you wanna look at value.
17:04
What does gold buy in terms of another commodity? What does it buy in terms of a house? What does it buy in terms of men’s or women’s clothing? You wanna see if it’s undervalued, not based on price, but based on what it does in the sector on a long-term basis. So, you know, the old adage that gold, an ounce of gold is a men’s suit and shoes and a hat and an umbrella and a belt and all that stuff. Okay, fine.
17:30
So if you could buy a men’s warehouse, you could buy a clothing store for an ounce of gold, then you know it’s of value. You know, that’s the kind of thinking you gotta kind of train yourself to do to get the idea. But the main idea is buy the right amount, put it away and forget about it. Because if I’m wrong or this thing muddles on, like the late great Harry Brown told me the first dinner I got to have with him, you’re prepared for what I think is inevitable, but my timing has been less than.
18:01
And I admit that, you know, I really never thought we could get this far down the road with this much distortions, this much malinvestments, this much maneuvering the markets on hot air, basically coming to the podium and getting behind the lectern and standing up and saying, economy’s never been stronger. And people buy that? Well, I’m sorry, I don’t, but I’ve been a lone wolf for a long time. So the point being is you don’t have to run your life around.
18:31
And the fact is you just do the opposite. It should be a deposit that you put away, don’t think about and let you sleep well at night and move on with your life, whatever your motivations for your life is. I agree 100% with that, David. And I mean, just to go one step further, I mean, we’ve seen the latest from the Fed, they’ve maintained rate steady, but some, you know, I’ll hear, well, I’m going to wait for those three rate cuts, you know, that the Fed will do and then see what gold does.
Fed Interest Rates Cut
19:00
Does it matter? No, not in the long run. I mean, I was asked that on this TV show earlier today. I mean, they can do whatever they want with the interest rates, and this time it won’t work. I mean, last time when Volcker came in, there was so much room in the economy to swallow those kind of heavy yields that were required to pay back the loans that people were giving for buying US dollars in the future. It worked.
19:29
But it won’t this time because we are upside down. There’s no mathematical way to pay anything back at this point, let alone the long-term, the 10-year note or the 30-year bond. So they have to be discounted or they have to be repriced. And I think there’ll be a repricing of some type. Could be that we negate all foreign holders.
19:55
We already did it to the Russians. It’s, oh, David, you’re using your imagination. That will never happen. Look, folks, it’s already happened. Basically took the, what was it, 300 billion that the Russians had and said, persona no grata, your dollars aren’t good for transactions anymore. This is very, very serious stuff. And people say, you know, well, you’re wrong. Well, how wrong am I? Because you look at the end of, look at the, type into a search engine, retail decimation from 19…
20:23
from 2020 till present day in the United States and see how many retail stores are gone. Some of these have been around more than a hundred years. Type in corporate restaurants decline in revenues and find out how many of these Applebee’s and other type of restaurants have closed multiple stores because they’re losing money. I mean, the depression doesn’t start with an overnight deal. I mean, the 1929s, they attributed to the stock market crash.
20:52
which is a good marker, but it really wasn’t that day. A lot of things led into that and after that. And it’s the same situation here. We’re slowly contracting the economy. The soup lines are getting longer and longer, but you don’t see them this time because in the States you get an EBT card, which is fine with me. I’m not against helping others at all. In fact, I’m a pretty giving guy. But the point is you don’t see it because they’ve got a little plastic card, just like I have when I go through the grocery store.
21:21
you just don’t know that the state is supplying that money to them. But the state runs out of money eventually. And when the state runs out of money, then you have further problems. Yeah. Very good point. And I guess just to extend and wrap on that about you being a very giving person, I always appreciate when you share your thoughts of life. I mean, you came on our inaugural show back in Thanksgiving.
Life Wisdom
21:47
And I can’t tell you the amount of people that wrote in saying how much What you said meant to them and you know for maybe people who didn’t watch that episode You know you were saying how the next time you’re up, you know table with loved ones You need to put this down because you don’t know if you might see that person again You know very somber thought here for today, but you know I just want to say thank you always for for your life insights And you know if you have anything else you could share with us about how you manage
22:16
kind of the ugliness of everything that you and I have to kind of live in when you’re covering financial markets and try and find balance in your life with some harmony. Yeah, okay. Well, there is on my Twitter, I used to do this, but I was asked to write your purpose in life or something that’s not to connect with financial markets. So I did it and put it on Twitter because I’m willing to take a risk as anyone knows. And it was just there for people to read if they wanted to. If they want to ignore it, ignore it.
22:46
really comes down to your life in my perspective. You’re asking me what I think, and that is it’s an inside job. I mean, basically there’s a lot of life that you cannot control, but there’s a lot that you can’t. I mean, it basically taught my daughter two things. One is life isn’t fair, and two, the only thing you have a lot of control over, ultimate control is your attitude. So it’s your attitude. It’s not how you react, it’s how you respond. And we’re taught to react, in my opinion, council.
23:15
I’ve been on several interviews as you know, Danielle, and not that often, but fairly often, somebody says, da-da-da-da, David, I really like your opinion, and I’ll say, I don’t have one. You don’t have an opinion? No, I don’t have an opinion because I haven’t formed enough information and I haven’t had enough data or given enough thought to say something of substance. I mean, I want, I’m not stoic to a great degree, I can be long-winded, but I really want to give the truth as often as possible.
23:41
And one of the best answers you can give if you don’t know something is I don’t know. And if you wanna explain why to have opinions, because I don’t know enough about it to have an opinion. And so that’s one. But the inside job comes with self-work, self-knowledge, and knowing your flaws, seeing your dark side and working through that. I have no halo and I never will, but I’ve certainly seen my dark side and I’ve mitigated that part of myself to recognize it and move through it and beyond it, because
24:10
To be a better human being means you’ve got to look at all aspects. I mean, a good friend, a real friend will see your flaws and see your high points as well and point them both out. I mean, if you’re out on a rowboat together and you got your oar upside down, a friend will tell you, you got your oar upside down. But you’ve got a pseudo friend, they don’t want to hurt your feelings, they’ll just say paddle hard. So you got to, there’s value in life. I was, I mean, I had to…
24:38
grow through this stuff. I mean, I was not given the ability, I was given the ability, but didn’t have the insight. I was too focused on money being able to solve all problems and bring happiness and all things that, you know, is wrong about money that I believed when I was much, much, much younger. And these best things in life are free really holds a lot of weight. I mean, what can you put on a priceless sunset, be it over the desert or over the water, just from your home? I mean, you can’t put a price on it.
25:06
You can’t put a price on our friendship. You know, a friendship to me is worth more than gold. And I’ll say one last thing before I go too far, and that is there are people out there that are financially secure. They have a great portfolio. They may have even over-weighted the precious metals, but they won’t be able to make it as we go through this transition. And the reason they won’t be able to make it as we go through this transition isn’t because they don’t have enough real money or assets or whatever. It’s because they don’t have enough inner strength.
25:34
to get through it. There’ll be people that have probably no gold or silver whatsoever that have enough inner strength that will be able to get through it. So I think that would be the way I would wrap it up because that’s what really counts. At the end of the day, it’s my memory of our times together on these interviews and when I met you and how gracious you were and vice versa. We muffed the first one and you do it again. Of course I’ll do it again. Why wouldn’t I? But-
26:01
There are other people whose ego might not be in check and they say screw it. I gave you my five minutes and I got a cocktail party. You got to blow you off. Right. So it comes down to being real everywhere and always inconsistent. If you’re always your higher self, then you’re in the best position you can be. And you don’t have many regrets. And believe me, I have some, especially from my earlier times, and I certainly make mistakes today, but I strive for what I can of it.
26:31
and that’s the being my best always.
26:37
Thank you, David. I really appreciate that and I am so grateful to you and our friendship and For your your your like I said your patience. I remember that that first video that didn’t go Well many almost what 20 years ago now And you were so gracious and have always been throughout my career So I I’m thankful for our friendship and I was as you’re telling that oh or story I’m thinking about my best friend and she’d probably
27:04
You know make fun of me until the end of time If I rode backwards or something so that is a true friend and you’re right It is more valuable than gold if you have someone like that in your life So thank you David. All right my pleasure. Thank you and and we’ll see you soon. Okay, okay and Thank you all for watching. We’ll have more great content
27:31
coming your way as always, I invite you all to book a strategic session with one of my colleagues over at ITM Trading. You can do so at the link below in the description. If you just need help or just wanna talk about navigating the current financial market, they’re really there to help you. And as always, don’t forget to sign up at danielacambone.com so you can stay on top of all these incredible interviews. That’s it for me. Thanks for watching.
SOURCES:
https://www.linkedin.com/in/thedavidmorgan
https://www.themorganreport.com/
https://twitter.com/silverguru22
https://www.silver-phoenix500.com/article/engineering-price-gold
https://www.cbinsights.com/research/retail-apocalypse-timeline-infographic/#2021
https://www.moneytalksnews.com/slideshows/restaurants-that-are-closing-multiple-locations/
