All right, y'all, welcome to the Scott Horton Show.
I am the Director of the Libertarian Institute, Editorial Director of Antiwar.com, author of the book Fool's Errand, Time to End the War in Afghanistan, and I've recorded more than 5,000 interviews going back to 2003, all of which are available at scotthorton.org.
We can also sign up for the podcast feed.
The full archive is also available at youtube.com slash scotthorton show.
All right, you guys, on the line, I've got Mike Swanson from wallstreetwindow.com.
He gives investment advice there.
And also, of course, he wrote the great book, The War State, and he's working on a book about the Vietnam War.
You have a title for that one yet?
Yeah, it's just called Why the Vietnam War.
That's the title I got for now.
But I'm looking to have it out in January.
Oh, really?
Great.
Yeah, if I can come up with a better title, but that might be the best I can come up with.
And it kind of, I'm thinking, will grab the attention of people that are searching for Vietnam books, you know, on Amazon.
Yeah, great.
Great.
Well, I can't wait to read that thing.
I'm sick and tired of waiting for it.
So hurry up.
I hear you.
But yeah, no, it's all, I anticipate this book very highly, because I know the kind of research that you've been doing for it and can't wait to read it.
Anyway, welcome to the show.
How are you, Mike?
Oh, I'm good.
Yeah, it's quite remarkable.
I mean, things are happening so quickly, I suppose, that every time between we talk, something crazy happens.
So the price of oil crashed last week in the futures market, actually went negative for a day or two, which is something that never happened before.
I don't know if it's ever happened in an individual commodity before, but it did happen.
So I think it's a sign of the deflation that we're in, a demand collapse in the economy for the moment.
Well, so I guess, you know, as an economist, I'm a great anti-war guy, but I was reading some David Stockman columns, and he likes to reproduce these charts.
And the unemployment chart is one that is just absolutely out of this world.
He's got 30 million people thrown out of work just in the last six weeks or so, I guess, or at least that have filed, that have been able to file, who weren't already counted out for whatever reason, et cetera.
So I guess you'd probably add another few million to that, at least.
But he also has all these charts of the losses in these different sectors.
And in many cases, it's already to the point where the losses equal all the growth since like 1990 and this kind of thing.
Might as well have had an H-bomb hit New York City or something like that, as far as the effect on the economy from this lockdown.
But so, I don't know.
From where I'm sitting, I can't see it.
What does it all really mean?
Well, the GDP numbers came out yesterday for the first quarter, and they show that the economy contracted 4.8 percent.
And if you look at 2008, there is about five quarters in which the economy shrank, and there is only one of those quarters which shrank worse than what we just saw.
And the expectations that economists are having is that this quarter that we're in now is going to be perhaps the worst on record.
I mean, they're talking about 20 percent shrinkage of the economy, April, May, June.
And if you add that on top of what we just had in the last quarter, you're almost approaching the entire Great Depression.
The economy shrank about 40 percent over two and a half years.
So we're in something that's quite amazing, and it's not going to end, I don't think, in the next couple of months.
So yeah, the stuff he puts out and is showing us is, it is the real world.
I mean, personally, I work out of my house.
I'm not personally feeling these things, but I know a lot of people that are unemployed.
But I think one big question that is being asked that kind of is going to be the important one, and I'm not sure what Stockman's answer would be to this.
I got my own, but the Wall Street Journal had an article yesterday in which it said, or posed a question basically, you know, it made note that the Federal Reserve is taking all these actions, lowering rates to zero, doing these bond buying operations now, or they've announced them, even saying they're going to buy corporate bonds, which is something they've never done before.
But the question they're asking in their article is, is this a reaction to a liquidity crisis, or is this an insolvency crisis?
And what that suggests is that if this is a liquidity crisis, the Fed's actions can be successful.
So in comparison, that's essentially what they did in 2008.
I mean, they had a lot of long-term lasting problems came out of their actions, you know, and maybe there would have been a better way to handle things.
But they reacted to a liquidity crisis in the financial markets.
The mortgage market vanished, basically, because these subprime mortgages collapsed.
They had no value.
That destroyed the balance sheets of banks.
They were on the verge of going bankrupt, and the Fed took action.
They created that TARP program and started these quantitative easing operations, so to speak, and so forth.
So the article was saying this was success, and you can go back to 2000, or go back to 1998, and one could say Alan Greenspan reacted to something of a smaller scale with success, and so forth.
And this is the story the Fed gives out themselves.
However, assuming all that's true, and I think many people would question it, but just for the sake of argument, assuming all that's true, what about insolvency?
What does that mean?
Well, that would mean that there's a lot of businesses going to go bankrupt because of the damage and the shutdowns in the economy, and they're not going to be able to see growth return quick enough to prevent themselves from going bankrupt.
And that's a problem that the Fed Reserve cannot solve through printing money and the lowering rates and all these sort of things.
And I fear that's really the next thing that will happen before the end of the year.
The economy is opening up, so to speak, in different parts of the country.
Probably going to be, where I live, it's supposed to happen in June, basically.
But what does that really mean?
It's hard to expect that things are going to turn to the way they were in February.
One example is, I'm following as a proxy, and because I like to go out there once or twice a year, what's happening in Las Vegas.
They had a conference call with the Wynn Casino CEO, and he was saying they're going to open back up in June.
However, all the casinos in Vegas are only going to open up 20% of their rooms.
They're taking all these various measures to protect the guests.
The Venetian yesterday released a plan that they're going to install heat sensors, and if you walk in the casino and they detect that you have a temperature over 100 degrees, then they're going to have guards come up to you and take you to a place where you can get tested for the virus.
They don't have all this capability yet, but this is what they say they're planning.
The most important thing on the call is they said that they don't expect people to be flying to Vegas for months, so they think all the people are just going to come from California and so forth or surrounding states.
The airline industry has said with the FCC or FAA that they want to stop a lot of flights.
JetBlue has said they want to discontinue all their flights to Las Vegas.
One airline CEO in another conference call said that they're anticipating to be able to fly, you're going to have to have some sort of clearance that you're not infected with the virus, you're not sick.
They don't know exactly what that's going to be.
Is that going to be something on an app or some sort of, they use the word medallion, but I don't know what that is.
The point of all this is that we're not returning to a normal world until probably a year or two.
In Virginia, they're working with Maryland and Washington, D.C., and last weekend, they, in conjunction, all three of them, came out with what they called a three-phase plan, and the first phase, they said, could last up to two years and would involve, by June, they anticipate being able to track and trace, is the phrase they're using, where if you get infected with the virus, they'll find people that you've been around and warn them and these people are supposed to get tested.
This is all the kind of stuff that's being planned out.
I'm not trying to say it's a good idea or a bad idea.
I'm just trying to figure out what is coming, because I'm trying to trade these markets and figure out what the world always means for the economy and whatnot, so I'm just trying to tell people what seems to be happening, and if they want to fight it or support it or whatever, that's up to them.
Yeah, no, I hear you.
Now the lockdown just can't last through for a couple of years.
I've heard some of the germ doctors saying, well, yeah, we're going to have to keep everything locked down, but they don't understand that there's going to be a war if they keep this thing for even another few months, and I actually was mildly surprised, kind of, even, when I saw that the governor of Ohio has gone ahead and extended his lockdown order through the end of May for an entire other month here, and I'm not sure exactly where Ohio is on the bell curve there, but they said that we had to keep the peak of the curve from overwhelming the hospitals, but if they're really going to move the goalposts to a couple of years from now when everybody who can dive it has already died and everybody else is moving on before we can, you know, let the economy back up, let people go back to work and this kind of thing, I mean, that's completely nuts, even to the end of this month.
I mean, you look at the amount of unrest that's already, you know, beginning to show itself here and, you know, I mean, I'm just going from memory here, but I'm pretty sure that they showed the curve.
Well, we could have this peak here in the middle of March, but instead we're going to flatten it down and it's going to last probably through the end of April.
Okay, but then how much longer do they really expect for people to stay inside, you know?
Yeah, I agree with what you're saying.
It seems like what they're doing, judging by what the officials are saying where I live, it seems what they're really trying to do is keep this lockdown in place until they believe there's enough testing available.
They said they want to test, I think it was up to 10,000 people a day in the state of Virginia, basically double what they're able to.
I know that they said that, but it seems like they want to be able to do that along with some sort of system of, they call it contact and trace.
So one of the things they mentioned is Apple and Google are working on this app that at first will be voluntary, you can download it, but then they say it'll automatically be put on your phone.
And if you, what it's going to do is use Bluetooth technology to track if you are around other people, other phones for like 10 minutes and they got to be, I think 10 feet close to you or something, but at least you got to be around someone else's phone for at least 10 minutes.
And if they get sick, then they're supposed to report that on the app or their doctor will, and then tell you and everyone else they've been around.
And then you're supposed to quarantine yourself or get tested.
So that's, I think they're anticipating some sort of system like that.
And then this type of lockdown situation could go away, maybe permanently.
But we would be living, I think, in a strange world for a year or two until they find a vaccine, if that happens or not.
They need a better plan.
People are just going to leave their phone at home.
I mean, how easy is that to come up with?
I'll leave my phone at home.
Okay.
Well, I mean, I fear that this would be what they would want if you go on an airplane or you take a train or maybe a bus or maybe go to a restaurant and so forth.
I mean, it's not spelled out that way, but that seems like where this is sort of heading towards.
But you're right.
I mean, honestly, that's what I'm going to do.
I'm going to leave my phone at home as much as I can if it comes down to all this, you know?
Well, and really all this is doing is bringing back to mind what we already know about how bad the surveillance is in America right now.
We've known since Bamford, never mind Snowden, you know?
Yeah.
And that begs the question, is this just a power grab by Google and Apple?
It's Google and Apple working together.
You know, Facebook says they want to get involved somehow in this stuff.
I don't know.
But it's just to me, this is just a sign that the economy is not going to return to normal overnight.
Yeah.
And then also all this stuff I talked with you about last time, I believe, is a huge thing.
I don't know if Stockman sees it exactly the same way.
I suspect he does.
I need to listen to the conversations you had last time with him.
But I think the bubble is bust, too, in the economy.
And that's what caused this liquidity crisis.
And that alone, I think, is going to alter things and be extremely chaotic over the next couple of years.
Well, you know, I was going to say, what if this virus, in a way, is Paul Volcker coming to pop the bubble and lick inflation big time?
But then once he's done forcing this horrible recession, that maybe all the bad debts will be cleared and all the marginal businesses will be bankrupt.
But then we can get a good, healthy economy back on its feet after that.
I think so.
I think it's going to be extremely chaotic.
I mean, you know, it may take three years to get to that point or maybe even five when you say everything is good again, you know, because what I'm anticipating is we're going to have like a depression situation, maybe for a year, and then it'll bottom out.
But what I'm more fearful of, or in a certain sense, is that once it does bottom out, there will be a lot of inflation.
And that will be the cost of all the bailouts and everything, all these stimulus programs and all this stuff.
And that could play out over a year or two.
And then when that ends, it would be the gravy times, so to speak.
You know, but it's all like a process of resetting it.
And ultimately, I think this is the cost of decades of Federal Reserve policy that Stockman is, you know, well documented in his book.
And Ron Paul and others have talked about, you know, since I was paying attention to them way back in 1999.
Well, yeah.
I mean, before this whole virus problem came out, the question was essentially, will the bubble pop before the election?
That was it.
Trump's whole campaign slogan was, vote Trump.
The bubble hasn't popped yet.
And so we all knew it was coming.
But, you know, the virus was the Federal Reserve Open Market Committee in this case, and it wasn't raising the interest rates, but it forced a lockdown that essentially served the same purpose as far as that goes.
But then, you know, what you're saying, too, about, you know, the phone tracking and all that, I read a thing about how the phone tracking shows all this data is already available.
And it shows that people were already locking themselves down before the government said so.
And they're already setting themselves free and going back outside again before the government says that it's OK to.
And that, you know, people sort of take their cues a little bit, but they're not very good at following orders.
In the opinion polls, they say they're in favor of the government forcing everyone else to do everything.
But when it comes to their own lives, at least, they somewhat prefer freedom, it seems like.
So, but that goes to show, though, that it's not going to be any kind of V-shaped recovery, because just like you're saying, the airlines are smart to bet that people are not going to hop back on airplanes just to go gambling and people are not going to be packing restaurants and bars full while this thing is still a problem.
And but then again, that's assuming a lot, too.
It might not be a problem.
It might just keep fading out and go away like the flu tends to really go completely away in the summer around here anyway.
I don't know.
So I think there's still hope for that.
As bad as a depression as they're forcing, that the fear of the virus is still going to be enough to keep any recovery from really taking hold any time soon, huh?
That's what I suspected.
And, you know, in Georgia, they reopened, so to speak, and they opened up the restaurants and as reading news stories saying that no one's been very few people have been vaccinated.
People are going, you know, they're still doing carry out and like they're opening up waffle houses and they'll have two customers and and then half to half of they have mandates to that basically all the people have to be six feet away from each other.
So they have staggered booths like one booth.
You can't have people sitting at then the next one you can and so forth.
So in where I live, I live in a very conservative area.
It's a town city of thirty five thousand with the surrounding county.
And most of the people are conservatives.
And it's funny because on my Facebook, you know, there's a lot of people vocal about wanting to reopen back up and people posting it's a hoax and all these sort of things.
And at the same time, though, people are there's a lot of people very scared.
And, for example, where I live, there is a stories that less people are going to the hospital, that a story where some guy had chest pains and just died of a heart attack because he wouldn't go to the hospital.
And I have friends who work there as nurses and so forth.
And they told me there's so few such little business of people coming to the emergency room that they're cutting back hours.
So that's the irony.
Never would have thought, you know, a few weeks ago that imagining the hospitals being over full and it's the exact opposite.
But when I go out, you know, any anywhere and I just like I took a walk or a couple of days ago in a park, you know, open air park and like half the people and it's not a lot of people walking around, but half of them are wearing masks, you know, outside, which I don't believe there's any actual use to doing that.
But, you know, that's how people are acting.
And myself, you know, I think everybody has to figure out how they want to deal with this in their own lives going forward.
The first couple of weeks, I didn't hardly go anywhere except the grocery store and then to my mom's house to check on her.
And that's about all I did.
And then last weekend, I visited some friends that live in an apartment complex, and they told me half the people are staying inside their rooms and not coming out while the other half are.
So, you know, it's just how seriously do you want to take it or do you want to try to do something?
I guess the decision I made is do something in between and just cut back on what you might do, go places to the grocery store every other week instead of every week and so forth.
So that's kind of, I guess, what I've decided to do.
But, well, you know, I mean, I think we're going to find out here real soon.
I mean, the peak for what it is, is I think in most places in the country, certainly in central Texas, is far lower than a lot of people feared.
And and we're past the very height of it and on our way down.
So but the question still remains how quickly it's going to go down the backside of that bell curve.
And and then, you know, how how few people are being infected and whether people really change their attitudes about.
You know how bad it's going to continue to be or whether it's OK to go back out to the movie theater even because, hey, why not?
Nobody has it anymore.
And we'll know the answer to that within just a couple of weeks, probably.
Well, I think the real danger is if it comes back in the fall, you know, another wave in the fall.
But if it does, I think the idea is, well, we'll have this this app system or whatever it is to to quarantine people or tell them they need to be quarantined.
So maybe if there is another way, they won't have to shut everything down.
Instead, we'll have this other system running, which is what is actually going on in some other countries already.
It's it's what is happening in the world.
It's it's what is happening in Vietnam, apparently.
Yeah.
And I think South Korea, I don't know if they can make that work here, but I I certainly do not believe they'll be able to announce another lockdown and try to redo what they've done in the past time here.
I mean, they had all the time they needed to ramp up the number of ICU beds and get more ventilators and all the things that they needed.
I mean, they said at the beginning, this is to prevent us from having to triage people in the hallways and parking lots because of just being overwhelmed.
So, you know, they're not going to be able to pull the same stunt.
And then it still could be very bad.
You know, I'm not exactly sure if anybody knows there's so much data being interpreted all different ways.
But we don't really know the exact transmissibility and the exact virility of this thing as far as that goes.
But it sure seems like a lot of people are dying, you know, 60,000.
And I know people say that the hospitals are overestimating all their covid deaths.
Yeah, well, they're undercounting them, too.
So it's somewhere right around there anyway.
Well, one thing about the lockdowns is really they can't stop the virus, right?
They can't.
The lockdowns don't make it go.
They can slow it.
Yeah.
All they can do is slow it.
And really, in that sense, the only real purpose of it is to prevent the hospitals from being over full.
So if you can, if that problem has been eliminated through these measures and can continue to be eliminated, then there is no real justification for doing them for two years or whatever, you know, a year.
So it's going to be a different than what we're living through right at the moment.
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Let's say people listening have a little bit of money.
What kind of metals would you tell them to buy?
Well, I mean, the simplest thing is just buy some gold and silver.
They're beating the market.
You know, gold made a new high last month.
And unfortunately, I mean, any investment advisor and anyone who wants to invest safely for that matter, the number one thing you need to do is diversify.
But we're in a situation where at the moment, the only thing really going up that's made a new high and going up is gold and silver.
And if you try to diversify with bonds at this point, you're not doing anything because they don't yield any interest.
And if I'm correct about inflation coming, then you're just actually going to lose money.
So it's it's a that's a big, you know, problem anyone investing has is, you know, you can't just do what has worked in the past, put a lot of money in bond stocks and whatever.
So at the moment, personally, I'm just focusing on gold and silver mining stocks.
So I saw a couple of charts, though, and I wonder, is that just a bubble now, too?
Because everybody's afraid of cash in the markets and whatever.
So they're running to gold.
Well, I don't think it's a bubble.
You know, it just broke out of a new to a new high a couple of weeks ago.
It's not like what Bitcoin looked like in 2017 or something.
You know, it's only up like maybe 20.
Well, I'm not sure I have to go calculate it.
But I mean, it's probably up 20 percent or something in six months.
It's not I don't think it's that big of a bubble.
And so do you think that's especially its growth just in the last couple of months, that that's a pretty good reflection of the amount of money that the Fed has created?
And the devaluing of the currency?
Not not not necessarily.
I don't I don't think the the currency hasn't really faltered yet.
It might not be so bad.
But it might not be something that happens for a while, a couple of months or next year or something.
So I think there is evidence that there's like investment money going into gold and silver, you know, of people with a lot of money and, you know, institutional type investors.
But there isn't really any that that small type of investors or traders are getting involved in it yet.
They're still pretty much focused on the stock market.
So when you see these unemployment numbers coming out, 30 something million people losing their jobs just in the last six weeks or so, and it must be more than that.
That's just the people filing for unemployment right now and successfully.
And then, I guess, presumably virtually all those people losing their health insurance at the same time.
I wonder, you know, what that means for the economy and for those people.
And, you know, is a twelve hundred dollar check supposed to tide them over through this or what is the deal with that?
Well, I mean, if someone is unemployed and they have no insurance and they end up in the hospital, the emergency room still have to take them.
And I've known people who have had cancer and things, you know, or had to get procedures to see if they have cancer and so forth with no insurance.
And they get it, you know, you get it done.
If it's something like that, usually they have to schedule it way in advance.
I mean, it's not a good thing.
But what ends up happening is they get taken care of, they go to the hospital, but then they get a big bill.
So without insurance, you still end up stuck with a big bill.
And then you go bankrupt or find some way to pay some of it.
So but the people still get treatment, but financially, it's not a good thing.
Yeah.
Well, and then you can't really declare bankruptcy, right?
Or that was the Joe Biden law was that if you put your health care on your credit card that, you know, you're basically stuck with those bills forever.
Whereas if you're Donald Trump and you lose money on a hotel, you can just declare bankruptcy and start over again tomorrow.
I'm not really sure.
I don't know.
I've got friends that are bankruptcy lawyers.
I gotta ask them that.
But I don't know.
There might be a way to move the debt around, you know, somehow.
I think that's probably how it's done.
You probably get it off your credit card and to a personal loan of a bank or do something and then declare bankruptcy.
There's probably some trick to it.
Yeah.
Or just hope that the collection agency ends up just writing you off and going away.
Yeah.
That's always a good strategy, too.
That might be what happens a lot, actually.
That's a good part of having no credit score at all.
It doesn't go down.
It just stays at nothing.
Well, I'll throw this one thing out of this, I guess, on a positive note.
If I'm right about inflation coming in the end, that'll actually be to the benefit of many people that do have massive debts, whether it's student loan or medical debt.
Because in the end, the stuff will just be inflated away.
Right.
Yeah.
Borrowing dollars and payback in dimes and all that.
Right.
Yeah.
Something Stockman was pointing out was that there's so much deflationary pressure that as much money as they're creating, that still is not going to lead to an increase in wages.
You have all these people kicked out of work.
That's huge downward pressure.
And then just with, you know, still, as he pointed out, people all over the world, not just here, but people all over the world being thrown out of work and downward pressure on wages everywhere.
And I guess all the different black holes where American dollars go when our government prints them into other countries, central bank vaults and whatever else, that we probably won't see price inflation for all the trillions they're creating, which that's what I should have asked you first.
In fact, that was in my notes for the first thing to ask you.
Just how much money have they created here?
And then what do you think about that as far as all those different black holes, bottomless pits to fill up with money before we see real inflation, you know, price inflation on the shelves here?
Yeah, I've lost count of the trillions.
Honestly, in March, they would announce a trillion a week.
The Fed was saying, you know, doing these bond buyings.
I just said, well, it doesn't matter anymore.
But I'm looking it up.
And as we're speaking, and it says around $3 trillion has been created so far, globally $7 trillion.
But I did see numbers last week that said that the US debt to GDP is already poised to hit a record to go beyond where it was in World War II.
At its peak, which is pretty amazing.
I think he's correct when he's stopping, when he says that, you know, it's not creating inflation because the massive deflationary forces, the demand collapse, and the price of oil doing what it's done is a real example of that.
There's one third less gasoline being used across the country now than there was in February.
And I went and looked because I was curious about this.
In 1991, I started driving at 16 years old.
And that first year of me driving was the cheapest gas had ever been in my lifetime.
It was right after the first Gulf War and the price drop.
And today, if you adjust, it was around $1.05 when I was driving where I live.
And if you adjust the current price, and you could put it in 1991 dollars, it's $0.65.
So it's like half what it was in 1991.
It's probably the lowest oil gasoline prices have ever been compared to the value of the dollar.
So it's pretty incredible.
So my guess is that the inflation will start when the economy bottoms out, when the recession really ends.
And I'm guessing that'll be next year.
And I know last time we talked, I cited this Ray Dalio work.
It's like a three-volume reference called The Big Debt Crises.
And it goes back through history of all these type of situations, even hundreds of them.
And typically, that's what happens is the inflation starts when the stock market and the economy actually do bottom out.
So that's what I'm expecting to play out and happen, when the unemployment goes down, so to speak.
I'm guessing that'll be next year.
I don't know for sure, obviously.
Now, so the Democrats, well, some of them, anyway, have been pushing this thing that we should coin, the Treasury should mint trillion-dollar coins, at least two of them, and just go ahead and expand the money supply as much as possible.
Why send everybody $1,200 when they can send everybody $120 million?
We can all be rich, and it'll be just fine.
And this is actually not crazy talk.
This is actually, you know, sounds like modern monetary theory has more influence than Austrian school economics does in American policy here.
But don't we already know that there's a limit to how much money the government can create?
Or that's only what backwards-looking barbarians think, or what?
Well, I mean, that's the modern monetary theory you're talking about.
I first heard of it from the so-called progressive people in the Democratic Party advocating we can just print, the Fed can print as much money as it wants, and then we can use that to fund our Green New Deal, or whatever.
We will, you know, all these new programs we want to make, pay for everyone's medical care, whatever it is, but we can just print.
So there's no reason not to do it.
And the modern monetary theory makes the claim that as evidence that we can just print, we've been doing it for since the 70s, and it hasn't caused a crash or a default on the debt.
So we can just keep doing it.
Obviously, I don't believe that.
I think the only reason we've been able to do it is because the US dollar has been the global reserve currency.
However, I don't believe that's going to continue forever.
And if the debts do get to so big, at some point other countries will want to get off this dollar standard.
And I think that's what they don't account for.
However, it is becoming more mainstream.
There's no doubt about it.
This week, two days ago, Tuesday or Wednesday, on the CNBC website, on the very front page, they had an editorial advocating for it.
So I think it's no longer just a concept in the Democratic Party or something peddled by Paul Krugman, but something that's reaching the financial press in probably parts of the Republican Party, too.
So I think it's going to be the basis for justifying all these bailouts and doing more of them.
Yeah.
Now, is there an economic argument at all, like a fair one, for why these trillion dollar corporations, well, zillion, billion dollar corporations, should be getting bailouts at all these banks and Boeing and all these guys?
Even if you wanted to avert your eyes and say, well, government is throwing 30 million people out of work, at least owe them $1,200 for that.
But what about these banks?
Would you just let them all crash and burn?
Well, I mean, if they would have done that in 2008, I think all this stuff wouldn't really be happening.
So that's the argument I would make.
It's the same one I think that's in David Stockman's book, because I read it and it was pretty convincing to me.
In other words, you're saying if Bush and Obama had let them all go bankrupt back then, then they'd have been replaced by banks that would have had a savings for a rainy day?
Yeah, exactly.
The idea was back then that, look, you got Goldman Sachs and JPMorgan and all these Wall Street banks and home lending institutions, just let them fail because there were local banks that weren't in the same position and they could just take their place, basically.
And instead of bailing out the banks, what would have been done is you would have bailed out people's bank accounts through the FDIC insurance.
So you bail out people who got the accounts and let the banks fail instead.
And to me, that would have made a lot more sense.
But instead, they bailed the banks out and took their bad assets and put them on the balance sheet of the Treasury Department.
So they turned what was a banking crisis into what I believe is now going to be a government debt crisis starting in a year or two.
And at this point, I think it's too late.
I think we've passed the point of no return and it's just going to play out and we'll just do whatever we can personally to not suffer from it or benefit from it if we can.
And it's like a year jubilee or something is going to happen in the end.
Yeah.
You know, something else that I probably should have asked you about earlier in the conversation would have been about the supply chains for getting food on the grocery store shelves.
And there's been some worry about shortages of meat and this kind of thing.
I haven't thought, well, I hope they keep the water and the gas and the lights on.
And it seemed to go without saying that those utilities aren't going anywhere.
This crisis isn't nearly bad enough to wipe out stuff like that.
But then I'm seeing animals being mass slaughtered and buried in mass graves instead of taking to market and things like this.
So what do you think?
Well, I mean, we've seen hoarding and, you know, where I live and probably where you live of toilet paper, paper towels and so forth.
When the lockdown started the first week, all the eggs were gone in the grocery store.
Now there's eggs.
So I think there can be people that panic buy or a disruption.
And this seems like more likely that there would be a real disruption, potentially with some meat.
To me, the paper towel stuff seems like just I don't see no evidence that there's really a problem with the supply.
But there's stories about these meat plants.
And I can just tell you in the state of Virginia, there's two meat, two chicken plants that have made the news.
And I've driven, I drive by them a couple of times a year, usually, because I take a trip to Delaware to visit some relatives and stuff.
And we go by these places.
And there's a county that has two of these chicken Purdue plants.
The county's got about 30,000 people in it.
And there's nothing there except these two plants.
And most of the people working in them are migrant workers from Mexico.
And the story is that hundreds of them have gotten sick.
A dozen or two have been hospitalized.
I don't recall if any have actually died yet, but this has caused many workers not to show up for work.
And I think things like this apparently are happening elsewhere in the country.
So there is a problem with employees showing up.
And apparently, the way these factories work is the people have to work side by side.
They can't do this social distancing of making spreading out over six feet or 10 feet or whatever.
Because they have to have enough people working the assembly lines to have the assembly lines move fast enough to be profitable.
So I don't know if there's a real solution to it.
Maybe they give the people suits or something.
I don't know.
But I do think it is a real problem that's being talked about.
But I don't see any reason to think this would lead to some permanent disruption of our food supply.
In the worst case scenario, what would happen?
The virus would run through these communities of workers.
Maybe it is happening.
Maybe it is actually what is taking place and then just run its course.
And then so many people would get sick.
So many people would pass away and then it would be done.
And this has actually already happened in some prisons.
There was a story a couple of days ago where there's four prisons that prison authorities did testing of antibodies to see how many prisoners had gotten the virus.
And it was close to 90% of them had gotten it.
One of the prisons was in the state of Virginia.
And what they found was that out of 3,000 people in total that have tested positive for these antibodies, 92% of them had absolutely no symptoms, had no idea they ever had it.
So 18% got sick and one person out of these 3,000 have died.
So if I go back and think about these two factories that I've passed by a couple times a year, they employ probably combined together about 500 to 1,000 people.
So that's probably how it's playing out already in front of us in real time.
Yeah, well, and they've had pretty big outbreaks, as you say, where I guess there was one just the other day.
I'm not sure which state this was in.
They had 900 and something cases in this one factory.
But yeah, I don't know what can be done about that other than closing down temporarily like they did and try to wait it out and see what happens.
I sure wouldn't want to work in a meatpacking plant.
I bet that work sucks in the first place.
But then having everybody standing right next to each other like that, and you know they don't all have good masks and gloves, well, maybe gloves.
Well, one of the things, I have relatives that live in this area, and my mom talks to them.
And they told her that this is all in the news up there.
And they're saying that these people don't speak English.
So they don't understand how to keep themselves safe.
But that's, to me, this is propaganda probably, right?
That the companies are putting out there.
But as far as labor conditions, Trump has issued this Defense Production Act to say that these places cannot shut down.
And you got to go back to Harry Truman to find the last time a president did that in an industry.
And he did it during the Korean War.
And the reason he did it was to prevent workers from going on strike.
I know he did this in the textile industry.
So I suspect that what Trump's order actually means is that workers who do not show up to work can be fired.
Whereas normally, you know, they could sue or if they did in this sort of situation, they would be able to sue if the workplace is endangering them.
So I think that's what Trump said was that he needed to take care of the liability there.
So if any workers get sick and die, the company won't be held responsible.
But that's the exact opposite of what he needs to be doing, especially if he's going to be forcing them to go to work, then the company will be held responsible.
Well, you would think that would be the right thing to do.
But, you know, we're in this situation across the country, and this is what he is doing.
So it's what it is, you know.
So, yeah, we'll have chicken, but it'll be full of coronaviruses.
Well, when it was something like this, Well, someone made this point that one of the problems with this is that what a lot of these workers are actually doing is inspecting the meat.
You know, they're looking at the meat to see if there's blood in it or feces, waste.
And if there is, you know, they throw that meat out.
So if the working conditions are deteriorating, then it could be that the meat isn't as safe as it was beforehand.
So that might be something to think about, you know, when you're cooking your food, cook it, make sure it's well cooked.
Don't cook rare steaks.
Yeah.
Well, and I can just see the whole thing of people who are not happy to be there at all doing a less good job in a work slowdown sense.
And after all, you know, especially when you're a few steps removed from the actual dinner plate there, it's pretty easy to forget the humanity of the all the people who are going to be buying this food at the end of the chain, too.
You know what I mean?
Yeah, yeah, that's definitely true.
And that's one that's probably the main way tactic that workers do resist isn't necessarily going on strike, but slowing down their work, really.
Doing a worse job.
All right.
Well, so yeah, we'll be stocking up now.
I, you know, I sure was putting all my hopes on this thing blowing over sooner than later, but you know, I'm hoping the Texas sun will come out and heat up the whole damn country and.
Me too.
And do something that'll that'll let things return somewhat to normal.
But I don't know.
All right.
Well, so I guess I'll let you go now.
Thank you very much for coming on the show and sharing all the bad news with us.
OK, well, it'll get better eventually.
Yeah, man.
Hope so.
All right.
Thanks again, Mike.
Thank you.
Good talking to you.
All right, you guys, that is the great Mike Swanson.
He's at WallStreetWindow.com, WallStreetWindow.com.
And basically the deal is there is he lets you know about all of his trades so you can follow what he's doing, follow him on paper, see if that's what you like, and then if it works for you and then follow him with real money.
Later on, WallStreetWindow.com.
And LibertarianInstitute.org.
