Today we are joined by the host of the survival financial network and former attorney Kerry Lutz. Kerry is financial expert and we dive deep into today's economy, what the government is doing, and what's ahead for you and your money. Wage and price controls? Inflation or hyper inflation? Ever read Ayn Rand? We might as well write a new version: Biden Shrugged.
Noteworthy: A dollar today is worth .03 cents of what a dollar was worth in 1913 -- the year that the Federal Reserve was chartered. What have these bankers and the government done with our wealth?
Mentions: John Williams' Shadow Stats- http://www.shadowstats.com/
Guest Bio: Kerry Lutz is the founder of the Financial Survival Network ®
Phone: 914-214-4448
Kerry Lutz has been a student of Austrian Economics since 1977. While attending Pace University, he stumbled upon an extensive cache of Austrian Economic Literature in a dark, musty, abandoned section of the school’s library. After graduating from The New York Law School, he became an attorney and life long serial entrepreneur. His diverse career has included: running a legal printing company, practicing commercial law and litigation and founding a successful distressed asset investment company.
After the 2008 financial collapse and the continued global economic deterioration, Kerry realized people needed a reliable source for accurate information. Believing that inflation would eventually run rampant, he dedicated himself to helping people protect and preserve their wealth. He urged investors to re-balance their investment portfolios and to implement precious metals based strategies to adapt to the new economic order. The ability to perceive economic reality, as well as to separate truth from governmental inspired economic fantasy will be essential for economic survival and prosperity in the years ahead.
In 2010, Kerry gave up most of his other interests to pursue his long held desire of becoming a radio show host. Thus the Financial Survival Network was born. Its mission is helping you to prosper and thrive in the New Economy. He has done hundreds of interviews with such financial luminaries as Peter Schiff, Harry S. Dent, Martin Armstrong, Jim Rogers, Marc Faber and Peter Grandich. He continually releases new segments and interviews on iTunes and YouTube. His new Triple Lutz Report was an instant hit and continues to increase audience share. As he says, “The Financial Survival Network, It’s All About What’s Next!“
* I am not a financial advisor. All opinions are that of the host and guest. Please consult a trusted advisor for financial advice according to your specific situation and goals.
Save your kids from the government run indoctrination camps called public schools and get your kids into a good private Christian school or homeschool. To help out with making sure your kids know the truth about issues and ideas, check out the Tuttle Twins children's books and magazines!
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fighting back against the left's non stop attacks on liberty, freedom. And America, America. This is don't tread on liberty. Jason Davis is on the air.
Jason Davis:
Hey, welcome back to don't tread on liberty. Thanks for being here. I'm Jason Davis back with you. And obviously a lot of economic turmoil, a lot of warning signs in the air for quite a while. And I want to bring in another financial guru. Actually, we've talked before, he's the host and purveyor of the financial survival network at for at financial survival. network.com. He's also a recovering attorney. I think he put it to me last time, former former attorney Kerry Lutz is back with us. Have you been? Alright, I'm
Kerry Lutz:
trying to recover. But uh, you know, being a lawyer for 35 years, it's not that easy to recover from it, trust me.
Jason Davis:
And I, you told me last time, how you kind of got out of doing that and started doing radio. But what I didn't ask you before, what kind of law were you doing when you were a lawyer?
Kerry Lutz:
Oh, I did corporate commercial creditors rights. I was kind of a startup junkie. And we, you know, we're buying up distressed assets, things like that. So, yeah, it was fun while it lasted.
Jason Davis:
Okay, well, the last time we talked, we talked about inflation, and, you know, government printing money and mandates and all of those things. And now it looks like most of that has come true. And I bet you must be getting really tired of telling people I told you so right?
Kerry Lutz:
Oh, you can never get tired of that Enough. Enough. No, I'm not. I'm not gonna know, told you. So kind of guy. But look, all of the elements for runaway inflation were in place. What you know, just going by the quantity theory of money, the more money you print up, if you have the same amount of goods, prices will go higher. And then when you actually have less goods and services, than the prices are really going to go higher. And all the things that we're experiencing now supply chain disruptions, everything else, totally saw it coming. And but you shouldn't view it with fear, you should view it as an opportunity. Because credit is still flowing. In the good old days when this type of thing happened. Credit would be cut off, you wouldn't be able to borrow money except that usurious terms, now you can borrow money. And this is an opportunity of a lifetime for you to really cash in a Will Rogers once said, invest in inflation. It's the only thing going up. That's truer Now Jason, more true now than it has ever been before.
Jason Davis:
Well, there's absolutely no doubt about it. I was reading an article the other day in the Wall Street Journal. They're calling for just food prices to go up 7% In the first part of this year, and then I see that Heinz foods, you know, the ketchup guys. They've raised prices 20% today. So food prices going through the roof, that's going to have a real big impact on regular people.
Kerry Lutz:
Oh, yeah. Well, you know, we in this country in the United States are used to paying under 10% of GDP for food, under 10% of your income for food. Imagine if that went up to 35%. In other parts of the world, they spend 60 80% of their income on food. So we as Americans are in for a wake up call here. This is going to come as a shock to many of you out there. But inflation is coming with a vengeance. It's here already, according to John Williams shadow stats.com. inflation's running at a 14% rate when you utilize the same measurement of inflation as the government did, pre 1990s. So 14%, that's a huge bite to your purchasing power.
Jason Davis:
Yeah, and it's all because of the printing of money, which essentially makes the money worth less than it is because you have more dollars in circulation. So it takes more dollars than to buy the same things that you bought before. That's basically what's happening now. Do you think I mean, inflation will continue as long as they continue to do this? It seems like that's the only way they're able to prop up this economy is by printing money. And of course that's That's just all air. I mean, there's nothing there. So how long does this go on? And where are we headed,
Kerry Lutz:
you know, is a complete disaster in the making. Eventually, you know, $1 Now is where three cents of what $1. Back in 1913, the year that the Federal Reserve was chartered for three cents of a 19 $13. Alright, that number is going down, it's probably gone down even more. consumer price inflation is always understated. The government has a great interest in doing that, because they're going to pay up less in benefits less than cost of living adjustments. Jace, I'd venture to say you probably weren't of, you're probably a very tender age when we have our last inflationary spiral, which was in the 19, late 1960s 1970s, largely due to the guns and butter program and the Great Society Program of the late great Lyndon Baines Johnson president. And that syst that inflation persisted until the early 1980s. When Fed Chair Paul Volcker jacked up rates to 20%. And we're seeing 14 15% on T bills, it took 10 years for those rates to go down. And then we had 3040 years of very low, very benign interest rates. Now we're about to see inflation kick in where the government, if they do raise those rates to 15 20%, you will see mass defaults debt defaults, you will see mass bankruptcies, everything else. So they have no choice but to keep rates low, artificially low, and watch the inflation spiral. At some point, it becomes a choice. Do we crash the dollar? Or do we crash the stock market? Jason, it used to be that the Fed had two primary responsibilities. Number one was to ensure price stability, meaning fight inflation, and number two, was to ensure that employment was optimal at optimal levels, I would I hesitate to say full employment, that's never been the term used. Those and themselves are conflicting. But now they have a third, under enunciated responsibility. And that's to keep the stock market from ever going down. Again, when you combine those three responsibilities that I put in quotes, they are in an impossible position, something has to give.
Jason Davis:
Yeah. And I kind of rather believe that they're actually intentionally doing this to intentionally crash the economy, which is exactly what people at the World Economic Forum would like to see happen to pull America down with the rest of the Third World countries, which is what you're talking about before, when you said, you know, 60% of the world spends, you know, a lot more on their food than we do. Well, if we go to that place, then we're a third world country too, right?
Kerry Lutz:
Hey, you know, never underestimate the stupidity or the nefarious intents of the ruling class. They see it's in their interest. Look, there are winners and losers in all of these economic outcomes. They winners over the past two years, Big Pharma, big box stores, big tech, big automobile. You know, one thing that's not been understood the effects of inflation, because we've forgotten what inflation is Jason, but up until this outbreak here, the auto manufacturers around the world, they had captive finance subsidiaries, and they would rent out cars and lease cars at ridiculously low rates, 0% financing everything else. And they would actually book profits. But the fact is that the the value of the vehicle at the end of the lease, or the value of the collateral for these auto loans was always way, way below what they were booking at us. And now we've got a situation with used car prices up 50 some odd percent in the past year, their collateral is worth more than the loans that it secures. And the vehicles that will be returned and of lease are super, super valuable now. So inflation has bailed out the auto industry, which was otherwise arguably insolvent certainly had very much lower equity value than they're beginning to give credit for. And now they're there in the black and the vehicles that they do manage to produce because of so called supply chain issues are selling for above sticker price, enriching the dealers and the automakers. You know, the whole thing you see there are winners and losers with inflationary spirals. With what's being engineered by these elites. You have to choose to be a winner and not get caught upside down on the plague.
Jason Davis:
Yeah, well, that's always the that's always the trick, right? You want to? What did that buy low and sell high and all of that, but it's kind of hard to be in the right place at the right time. Unless you're on the inside. You know what's being planned? Sometimes. I'm starting to feel like you ever read the book Atlas Shrugged, you probably have right, Carrie?
Kerry Lutz:
Yeah, even as the pre biography of Elon Musk,
Jason Davis:
I'm starting to feel like wage and price controls might be coming. What are your thoughts?
Kerry Lutz:
Actually, I'm writing an article eight reasons why wage and price controls are inevitable. They're already in play. One of the most important wage price controls that we experience in our daily day to day existence, is interest rate fixing manipulation by the Federal Reserve and the Treasury. What greater example is there of wage and price controls than that? The other thing I believe, if you believe that the government, that we no longer have markets, we just have interventions, then you see what happens with commodity prices, lumber goes way up, goes parabolic, it gets slammed down and goes back down. And why is this happening? Some of you out there might believe that the shadowy hand of government is involved in these bubbles, they deliberately pop them when they hit technical, technically weak points in the chart, the government, all of a sudden zillions of future contracts get sold, supply, problem solved. And of parabolic rise in in things like nat gas like oil, like copper, you know, you could make the argument that wage and price controls are stealthily being implemented. And we're kind of like the frog getting cooked. And we don't know it until they turn up the heat to Hi.
Jason Davis:
Let me tell you something, if you're right about that, Carrie, and I think you and I think you are, people are gonna be in a real Rude Awakening, including a lot of business owners. It's just bad news. So the other thing that they've been planning, and you know, we hear bits and pieces of information trickling out about this is something called fed coin, which would be the final nail in the coffin for any privacy that you've ever had, as far as what you buy, and what your financials look like. But they want to go to a digital currency, which everybody gets a bank account and the Federal Reserve then deposits, you know, X amount of money in there for you, and you have X number of days to spend it or you they take it back, apparently. And, and, you know, if they do that, and I'm sure they will, what then happens to all these other Kryptos? I mean, what's going to happen to I mean, the government's not going to want competition, are they? I mean, that's not good for the government, is it? Jason, you
Kerry Lutz:
know, the old saying, Don't steal the government hates competition. So, look, I've had this, I've shared this belief from the get go, that eventually the government would co opt or preempt the alt coin. cryptocurrency space, I'm still pretty believing that that is going to happen eventually. But that doesn't mean that, you know, eventually the stock market's going to crash. But that doesn't mean you should be out of the market. As long as they're printing up dollars, and there's excess liquidity. There's only one sponge that you can go to and that's the stock market. Yeah, I agree. The universal basic income is probably just down the pike a little bit, probably coming. You know, I think the whole automation AI, everything else, government's not going to be able to control all this stuff. The government can't even control the little things that they used to do, let alone run everything. So eventually, this will lead to an undermining and basically a scaling back of the government not because they believe in free markets, just that the Hey, everybody is losing faith in them and then their ability, so fed coin, probably going to try it. We'll see how it works. I'm not sure why fed coins different than them just doing a direct deposit in your bank account. Guess you have a wallet, you know, the idea of freshness rating, like, you know us by January 1 2023, or it's no longer good. You know, throw it out, it disappears from your account is kind of intriguing, because money has never come with a freshness dating before with with a use by date, you know, checks. You know, the Uniform Commercial Code says they're good for 180 days or 365 days, and then they're stale. But I've never heard of money going stale like that, that is a fascinating concept, they will screw it up, they will cause far more harm than good. But I'm anxious to see this experiment, because we've never seen anything like
Jason Davis:
it. Well, the reason they want to have a use by date is because the economy is teetering on the edge of destruction, and they have to have you spend the money. So if they put a date on it, then they can be reasonably assured that people will spend it and put it back into circulation. And that's really what it's all about. It's a smokescreen. Now, why they want, the big difference between direct deposit and fed coin, is that with this fed coin digital thing, this is a two way street. So if they put it in, and then they can pull it out, that means they can see everything. So they're gonna know what you buy. And if they don't like it, you might not be able to buy it. I mean, you know, they might, they might not want you buy an AR 15. You know what I mean? I mean, they might just, they might just say, Nah, you're not gonna be able to buy that anymore, just like PayPal. And you know, some of these other payment, people are kicking people off for things they don't like, and all of that. And then you've got the other side of the coin, where if you haven't had your jabber do, then you're not going to get your payment this month. So what do you think about all that? I mean, is that I mean, is it really just about the economy? Or do you think that it's all really about control?
Kerry Lutz:
Hey, Jason, remember, the golden rule? You do? Has the gold makes the rules, right? Of course, everything the government does anything they give you always comes with strings attached. And you better be a good little plebeian. They're a good proletarian. And if you're not, you're going to pay the price. And the, you know, they're not going to, yeah, I think that's very likely that social engineering will be built into any fed coin, any currency. And, you know, like, the idea that if you just give people money they'll consume and that's good for the economy is totally incorrect, give people money to produce, and you will get far greater benefits, both in taxes, and in economic productivity. When you pay people to consume. You know, we're a nation of consumers. We're not a nation of producers any longer. And that's a big part of the problem here, Jason?
Jason Davis:
Yes, I couldn't agree with that. That's 100%. Right. Now, the other thing I want to talk about a little bit is unemployment. Because you're seeing now, you know, the, the government's sending in like military into hospitals, because the hospitals say they don't have any staff. Which is funny, because they just fired a whole bunch of people because they didn't take their Jabra do. So they basically created their own problem. And now the government has the Russian to help them. And the same thing is happening with the airlines and a whole bunch of other industries. As long as these mandates are in place, this is going to be a problem for unemployment, right?
Kerry Lutz:
Oh, yeah. Well, it's, we had a problem already that people are getting paid not to work. Now they're not being allowed to work because certain requirements always say this is typical government intervention in the economy, that leads to unintended consequences. That leads to overall impoverishment, impoverishment of a society. It always works the same way. Oh, we'll just do a little this. We'll just do a little that. And then the next thing, you know, the government's responsible for 80% of the economy, and we're all going bankrupt, happens over and over and over again. This is no different, and law of unintended consequences. Jason is alive and well.
Jason Davis:
And anytime the government's involved there's plenty of those. So last question. A lot of this sounds pretty bad. But as you said before, there's money to be made. So what can people do now to put themselves in position? I mean, is it just gold, silver real estate or I mean, is there something else people might want to be looking at?
Kerry Lutz:
Any asset that you can borrow money leverage, okay, that you can gain cash flow from? Do it. Those are the assets that do best in inflationary times. So if you can buy a car and do it in tomorrow, and make money, and I'm not saying to do tomorrow, I haven't tried it. I don't know if you really can make money or if it's just one of those things, but certainly Airbnb is something. These know, prices have gone up faster than hotel accommodation prices, because they're trying to make up for lost time from being shut down during the pandemic, their mortgage payments piled up, they have to make more money. So as a result, more and more people go into Airbnb, because a basic hotel in Miami Beach, Florida, you know, not living in the lap of luxury. Jason's five 600 A night. Okay? So of course, you're going to go Airbnb, I think that is the best thing you can do especially look, borrow, get a house, you get a 3% mortgage. According to John William shadow stats, the real rate of inflation is 14%. You're getting negative 11%. interest on that mortgage means you're making 11% right there. All right. Now look, real estate could go bad, it could go down very possible. But if you're living in the place, and you're renting out rooms, so you're going to live there no matter what. And inflation, you pay back in depreciated dollars. Airbnb, short term rentals are great. But we could have a thing where everything shut down not because of any health issues, because we have a major deflationary crash. But then you got to figure there's a debt jubilee down the road, and eventually your debts going to be forgiven. So any asset you can buy, that people will pay you money for to use, or that you can use to provide services to people, you should do it. Look, I never thought I'd live to see the day where cars would be worth more five years old than they sold for new five years before, that just shows you what inflation can do for you. All right, if you are going to Airbnb, or you're going to be a Uber driver or Lyft driver, or you're going to buy cars and lease them out to people let them do the Ubering. You basically get cars, you rent them out, and you leverage them up. Hyper leveraging is the key here. Preferably, you're not going to be reckless about it, and risk bankruptcy if things go south. But leverage is your friend in inflationary environment, because they're everyone's using leverage against you. Whether you're renting an apartment or whatever going buying goods and services and stores. The leverage is going against you. Use the leverage for yourself. Keep your credit good. use credit wisely to purchase income producing assets of any description, and you will you will become wealthy during this inflationary period.
Jason Davis:
Good advice. Always a pleasure to talk to you. It's Carrie Lutz, everybody from financial survival. network.com Carrie, thanks again for coming back. We really appreciate it.
Kerry Lutz:
I'm honored to be on your show, Jason. Good luck and keep up the great work.
Jason Davis:
Thank you.
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