U.S. Treasuries and Bi-Lateral Trade

EG: With bi-lateral trade agreements continuing to isolate the United States, what is the probability of us experiencing a World Market Crisis where sovereign nations begin dumping U.S. Treasuries and interest rates go parabolic?  

GM: It is certainly no secret that the US is being isolated on multiple fronts. As one example of that, we can just look at the US trade deficit which is hyper-ballooning. Sadly, the US has become an import economy nation. I often ask people what they believe is the US largest export product, and invariably I get a variety of answers. The truth is this; the #1 US export product is inflation, and here is how that works. Being that the US dollar is at least for now still the world reserve currency, and clearly the US dollar is being deliberately, systematically, and methodically devalued by the Federal Reserve, nations around the world are frankly, and rightly so- tired of having to deal with it. As a result, more and more nations are circumventing the US dollar in trade. What makes these issues even worse, is no one wants the products that we do make.

And this is specifically why here in America today, we are seeing the factory and manufacturing sectors remain in contraction. As for a rapid and uncontrolled sell-off of US debt, it is just a matter of time before that happens. The world debt market will undoubtedly reach a “nuclear” moment- a meltdown. The system is not sustainable. The system IS an extreme perversion of any kind of reality. Just imagine for a moment a system which can only operate in a state of perpetual insolvency- a black hole so to speak, which demands exponential debt expansion to function. Well, that is what we have right now! Moreover, currency devaluation on an even greater scale is the result, and with that- artificially suppressed rates. These two elements ARE exactly what we are seeing today. And this should be a warning to everyone that we are in a full-on liquidity crisis.

EG: You state we are in a full blown liquidity crisis and central banks are now evidently rushing to accumulate gold at the fastest pace in human history, alongside ravaging inflation. How are these institutions positioning themselves to ultimately become the buyers and lenders of last resort? 
 

GM: Liquidity crisis. The vast majority of people have no idea that simply to function, the current debt-based central bank run system can only operate in a perpetual vacuum. Meaning, it can never be made whole, and debt MUST expand. At the very moment that this mechanism is interrupted, the credit/debt markets “lock up” and economic activity STOPS. As to offer an example of this, all we have to do is look back at the “Financial Crisis.” During the meltdown, the former Fed. Chairman Ben Bernanke instituted along with the FDIC, a program called The Temporary Liquidity Guarantee Program, which was to offer a limited guarantee for new debt/credit that was being offered by the major banks- lending, and even inter-bank lending was halting. Bernanke was also working closely with the US Treasury to provide extra liquidity to these same banks. Then, Bernanke along with then US Treasury Secretary Henry Paulson, infamously went to The Congressional Banking Committee asking for massive capital injections directly into the credit markets to prevent a locking up of the system. Bernanke went as far as to say, “If We Do Not Do This Now, By Monday We Will Not Have an Economy.”

Today again we face an ever-growing threat of a full-on “Credit Freeze” situation which in my opinion, will occur WORLDWIDE. To push this inevitable occurrence off which is only going to make the next meltdown even worse, central banks will issue even more debt in several forms. 1. Create more currency, which is inflationary, and 2. Buy more debt. This mechanism then makes the central banks, (in this case the Federal Reserve) both the buyer and lender of last resort. The goal of every central bank is the same; to issue more of their product which is debt, to nations and individuals. What this does is effectively make central banks stronger and we the people- weaker. Gold, and in my opinion especially- silver, are the best hedges in this hyper-debt environment.
 

EG: Throughout history, 1/10th of an ounce of silver represented twelve hours of hard human labour. You have stated that silver is one of the most undervalued assets on Earth. Can you expand upon this?  
 

GM: Absolutely, and this is my perspective. If we know that price action distortions across the spectrum of asset classes is directly related to action in the debt market, we can therefore say with certainty that asset price action overall is dictated by the movement of cash either moving out of, or going into- the credit/debt markets. What this means is assets OUTSIDE of the credit/debt markets therefore can be considered derivatives. That is, they derive value from something else. The mechanism of artificially suppressed rates and weak currency, pushes cash into risk assets/stocks. This mechanism is directly responsible for creating asset bubbles.

This process also creates inverse bubbles. In a “risk-on” environment, in today’s case, brought about by artificially suppressed rates and currency devaluation, cash moves into asset classes which it has no business going into and out of assets it SHOULD BE going into. This mechanism creates extreme asset price distortions. Today, world stock markets via the mechanism of artificially suppressed rates are hyper-bubbles- and hyper-bubbles which will eventually burst. So, how I chose my price targets for both gold and silver is by attempting to discern where the real bottom for the Dow Jones Industrial Average is. I believe that a DOW/Gold Ratio of 1:1 will be reached because of a debt market meltdown. My best estimate is the DOW bottom is near 8,000. That would mean $8,000 gold. I see a Gold/Silver Ratio reaching 1:15, possibly even 1:10.
 

EG: Does the ridiculous anti-American concept of a 'tax on unrealised gains' represent nothing more than a savage attack on the middle class and on private wealth accumulation? Shouldn't kleptocratic governments just declare themselves 'Masters of the Universe by the Powers of Greyskull', while they're at it? 
 

GM: The idea of a tax on unrealised gains has been floating out there for years. If you are referring to Harris’ “plan,” it would require that taxpayers with a net worth above $100 Million pay a minimum tax on unrealised gains. Do I believe that is a good idea? No. Regarding the system itself, it has been turned into a perversion on a grand scale. A system which creates both nation slaves and individual slaves to the debt-based system, which is run by central banks. The REAL “Masters of The Universe,” are the central banks. It is not Presidents, Kings, Queens, Dictators, or Monarchs who are in charge of the world financial system. Central banks have become the government.

   

EG: Considering hyperinflation of currency in Venezuela, Weimar Germany and Zimbabwe, alongside 5,000 years of human history, why may an economy and currency backed by a bi-metallic standard actually be far better for Americans and for the people of the world? 

GM: In economics and finance there are only TWO fundamental truths. To have a strong economy you need 1. A strong currency, and 2. You need a correlating rate/interest rates high enough to make cash harder to obtain (which gives the currency its purchasing power). The current debt-based central bank “fiat” or “public trust” system is an abomination. ANY debt-based system, simply to function- demands that debt increase exponentially. This mechanism is enormously currency purchasing-power negative. A return to a wealth based/commodity backed system IS THE ONLY ANSWER. The issue is that central banks’ power resides in only one thing- THEIR ABILITY TO ISSUE DEBT. And without a REVOLUTION OF THE PEOPLE, central banks will never give up that power.

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EG: You have an immaculate knowledge of Wall Street trends and technical analysis. How may your book Tracking & Trading Stock Market Patterns for Maximum Profit (2013), deepen the insight of market traders?  

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GM: It’s really too bad that book is out of print- however, there are other books like this which are still available that cover the same basic principles. It comes down to this; cash moves through the markets in predictable patterns based on several factors. By understanding for instance- market seasonality, investors can have a pretty good idea of what to expect.

For example, “Octoberphobia.” Investors tend to fear this month as stock market crashes have occurred predominantly in October. However, the truth is Octoberphobia is unfounded. Having knowledge of this can provide opportunities for astute investors. Taking advantage of moves in the stock market are based upon what drives it. There are just two basic human emotions which drive stock prices, and these are FEAR and GREED. And fear is stronger. The market always overreacts one way or the other, based upon these two emotions. Here again, an astute investor can capitalise on that. Technical Analysis is a methodology which is used to assess where the price action of an asset/asset class/or even the overall market itself may go. There is no “perfect” way to do this, it’s truly an art form.
 

EG: You often advocate for people to 'become their own central bank'. If we take all of the world's debt and liabilities and divide this by the total world supply of gold, where do you see the true value of this asset today in 2024? 
 

GM: I do not even think about the short-term movements of gold, I am not concerned about it at all. Instead, I look at this from the perspective as to ‘where will be the most likely place that cash will move into’ when the world debt market hyper-bubble breaks down. In my opinion, especially in this current environment of massive and deliberate central bank currency devaluation and artificially suppressed rates, commodities across the board are ON SALE relative to vastly expanding debt. The bursting of the global debt hyper-bubble is going to absolutely crush the stock markets of the world simultaneously. This event will cause cash to flee into commodities, especially those which I consider to be THE most undervalued. Physical silver again, in my opinion- is the most undervalued asset on the planet today, with physical gold coming in second. I base this on the DOW/gold ratio and the gold/silver ratio.
 

EG: If you were Secretary of the U.S. Treasury tomorrow, what would be your five major legislative acts be concerning banking, taxes and fiscal policy, and why? 

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GM: My first order of business would be to return the US to a constitutional money system, a commodity/gold backed structure. Second, and this would be directly connected to my first move of returning to a constitutional money system, I would revalue gold. Many people ask, “is there actually enough gold to even have a gold backed system?” The answer is yes. It’s NOT the amount of gold that matters, but it’s valuation. Third, regarding banks. Customer deposits should, (in the case of publicly traded commercial institutions), be paid a share of overall bank profits. Fourth. People SHOULD NOT be taxed on their income, but only on their purchase of goods and services. Fifth. As for fiscal policy, here is a concept- HAVE A BUDGET!

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EG: Tell us more about the Mannarino Market Risk Indicator (MMRI) and why it is such an incredibly useful tool for gauging risk? 
 

GM: The MMRI is a tool which is used to gauge stock market risk based upon debt market action. Everyone is fixated on the stock market, but what people should REALLY be focused on is what drives stock prices. Today, world equity markets are NOT driven by fundamental factors. For example. P/E ratios, balance sheets, forward guidance, etc. Today, stock prices/entire stock markets, are being driven by; 1. Currency devaluation and 2. Artificially suppressed rates. Currency/central bank issued notes ARE UNITS OF DEBT. With that, the MMRI is comprised of 2 basic metrics. The MMRI takes the US Dollar Index (DXY), and the US benchmark US 10-Year yield, and via a simple equation, which is (DXY) * (US10YR) / 1.61 = MMRI. The 1.61 is known as “The Golden Ratio.” I personally first and foremost, look at debt market action to gauge where the stock market is likely to go moving forward. I believe that the MMRI is the most useful tool which has ever been created to gauge risk in the stock market.

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EG: You mention that 'in life, there are sheep who live in fear, and lions who capitalise on it'. Explain how the lambs are being led to the slaughter with Central Bank Digital Currencies (CBDCs)?  

GM: Fear is a control mechanism as old as time. Fear is paralysing and overcomes rational thought. Fear is a primal instinct. When people are afraid, invariably, they make poor decisions. Right now, and this has been going on for years, people are being conditioned to not use cash for transactions. If fact, they are being incentivised to NOT do it. For example, people are offered “perks” for swiping those credit cards. Very few people today use cash, it’s now all largely just ‘ones and zeros’ moving through cyberspace.

The current system globally, is deliberately being destabilised. And make no mistake, we are already in a full-blown liquidity crisis. How do we know this? Just look at how central banks are collectively hyper-ballooning the world money supply! For many years central banks have been planning to institute a universal CBDC system. This system gives them the ability to track every single transaction, it’s yet another mode of control. The key here is for central banks to create dependency on the current system and get more people to stop using cash. 

EG: When the dust settles, all the smoke has cleared and the distortions across the spectrum of asset classes violently revert back to fair market value - what does that world look like?  

GM: The effect of this singular event is going to change the landscape of the world. The result of the stopping of the flow of credit, which will come about as a direct result of a debt market meltdown, is going to lead to a scarcity of resources situation worldwide. Pandemonium in the streets will be a result. Regarding the financial system, a massive rebalancing will occur. Risk-on, that is cash moving into risk assets/stocks, will abruptly turn risk-off and cash will simply move into risk-off assets-commodities.   EG