Transcript: Porter Stansberry: Gold and Bitcoin Are Your Survival Kit

Marty Bent [0:01] Porter Stansbury, welcome back to the show.

Porter Stansberry [0:03] Hey, good to see you again, Marty.

Marty Bent [0:04] Good to see you again. I had a whole sort of slew of questions I was gonna ask you to follow up last year and jump into your book, twenty twenty nine, The End of America. And then I was sitting here looking at our Twitter account and I saw a tweet you sent out yesterday about the fact that we're not actually celebrating our two hundred and fiftieth anniversary as a country. We're s gonna be celebrating our hundred and sixty fifth anniversary because the country changed during the Civil War. I think maybe starting there is a great spot.

Porter Stansberry [0:35] Sure. yeah, I'd argue that what we're celebrating is the hundred and sixty-fifth anniversary of the end of our republic. unfortunately the government that our founders created didn't survive a hundred years. The the invasion of the of the South by the North in 1861 started a whole different country. The the South was conquered. ninety percent of its wealth was destroyed. And the entire structure of our government, the federalism, that really defined how the government was kept in check and how the central government in particular was Was limited to a very specific set of powers, was all cast aside through that terrible war, which I don't think I still don't think most Americans understand how absolutely catastrophic the Civil War was or how completely unnecessary it was.

Porter Stansberry ⋮ if you know anything about economics, you can understand that chattel slavery was not going to survive industrialization. It's not possible. And if you look all around the world, within a single generation, chattel slavery was eliminated, even in places that had. No concept of civil rights like Russia and Brazil. So there was no way that slavery was going to continue. And of course, the other thing is most people don't know this, is that the war wasn't actually about slavery. It was about the fact that the southern states believed they had the right to to leave the Union and the North didn't. So the North conquered them and won.

Porter Stansberry ⋮ And slavery was eliminated as part of that because slavery was at the time driving the South's economy. So it was really a war It was a it was a tactic of the war. It wasn't a political goal at the start of the war at all. But, anyways, I I think that it's really important that Americans understand what was lost in the Civil War in terms of federalism, and that Americans used to believe that they were citizens of their states. and that that concept, I believe, is gonna come back.

Porter Stansberry [2:35] in part because the s the the central government has been off the rails for so long, has acquired so many debts, has destroyed our monetary system. and I think Americans are are beginning to realize that the the prosperity that we think we enjoy is really a house of cards and that the things that matter most to us, like our ability to have our liberties and control our our communities through voting has really been destroyed by an all-powerful leviathan central government. And I think there's a lot of Americans that feel these things, but they may not really understand all the facts and all the economics behind why. And that's part of what my book 2029 is about and it was certainly about it was certainly what was behind that long ex post I wrote yesterday.

Marty Bent [3:25] Yeah, well it seems like the eighteen sixties set in motion a cascading event of death by a thousand cuts of new new acts, new laws, new sort of administrative state actors operating below this or as part of this Leviathan. And I certainly feel it as a millennial and I've been talking about this a lot as it pertains to this AI build. I think a lot of people are looking at the the tea lease, particularly as it pertains to anthropic and open AI, having to have their models tested and approved by the government first and saying this technology is so powerful, like it's crazy, like we need the government to do this. And I'm looking at it like the government should have no no part in this.

Porter Stansberry [4:14] Now it used to be there was a lot of First Amendment protections for software, because software is a form of speech. And I think that I think that's that's the proper role of government is to ensure our freedom to write whatever software we want. And I think that's part of your right as a human being to create the software that you want. Now if your software defrauds people, if it harms people, well then those are the areas where the law exists. There's tort law, you know, if you if you create something with your property that destroys my property, you know, I'll have a legitimate claim against you. But certainly I don't believe and ever there's a reason for prior restraint of speech. And that is what you see the government engaging in with its efforts to control software.

Marty Bent [5:01] Yeah. And why twenty twenty nine? I mean we we talked last year, I believe we recorded in February when we talked about tariffs. I think it was right before Liberation Day. we talked about ten trillion dollars in debt that need to be re refinanced, elevated long rates, which are still relatively elevated, and the power crunch being driven by AI. I think all those themes have progressed over the last Fourteen months, some better than others, but I don't think they've gone away at all.

Porter Stansberry [5:35] Well, look. those are a bunch of disparate issues. But they do have one thing in common, which is a bankrupt central government. And when you study the history of what happens when governments go bankrupt, they all do the same things. They monetize the debt, they aka they print money, they enact tariffs, and they start wars. And you know, the Trump administration has done all of the usual playbook. It's it's sad. I wish that I wish that people who were diehard Trump followers and and believers in Trump would just do an honest assessment of of objectively of what he has chosen to use his power to do.

Porter Stansberry ⋮ Did any of the people who were behind the January 6th hooks go to jail? No. Did did was you know ha have we have we Have we gotten out of foreign wars? No, we started another one. Have we what happened to Doge? Remember how Doge was gonna cut a trillion dollars in spending? Guess what? Deficit is larger under Trump than it was under Biden. So, you know, if you the I think really the problem with politics is it's the same for every party, and that is the only thing you can be sure of is that whatever they promised to do when they were elected, they're going to do the opposite.

Porter Stansberry ⋮ And they're gonna consistently do whatever grows the power of the central government no matter what.

Porter Stansberry [7:05] And they have different ways of going about that. You know, the Democrats like to import a bunch of worthless immigrants to vote for them to maintain the power of central government. And the Republicans like to engage in incredible amounts of grift and fraud in the d and the defense industries and start wars. you know, I'm I'm opposed to both equally. And that of course leads me no friends online.

Marty Bent [7:31] Well that that and again going back to the question of why twenty twenty nine, because I think I've been I think very aligned with the the sort of view of the world and the federal government that you just laid out there, but I was pretty convinced that all this would all this would come to to a head much quicker than it actually has. And now I'm in my mid thirties and and thinking maybe it'll last longer than than than I expected. and I think that's one of the bigger questions around whether it's the deficit or the ticking time bomb that is the national debt and all these off balance sheet liabilities is like, okay, we n we understand that these things are a massive shadow over over the American economy and the American way of living, but it it's it's hard to tell exactly when push comes to shove that these things will begin to falter.

Porter Stansberry [8:28] Of course, and I I don't pretend to have a crystal ball. I I I quote my old friend Rick Rule who says, I have two balls and neither one of them are crystal The ability of the central government with all of its awesome power to kick the can down the road is virtually unlimited. But there are two things that lead me to believe that there will have to be a forth turning, a f a real genuine break with the past, financially speaking, with with our monetary systems and the global financial system as a whole. And that that's really it's very, very simple. It's two simple things.

Porter Stansberry ⋮ Number one, over the last seven years, central banks have abandoned treasury bonds. So all around the world, central banks are acquiring gold, stockpying gold instead of treasury bonds for use of their reserve assets and their banking systems. That is an enormous sea change. And that is a reversal of a trend that had been ongoing since the end of the Cold War. And so this is a profound change. Change that most people don't see in their day-to-day lives. But what undergirds the global banking system used to be dollars and is now majority gold. And of course, the central government of the United States cannot print gold.

Porter Stansberry ⋮ And so that is a really important, huge loss of economic might. And I've been predicting that that would happen since 2011 when we printed roughly five trillion dollars to get out of the global. Financial crisis. So this has been something that I said would happen for a very long time, and now it has happened. S. Treasury much less financial flexibility because if the Fed were to simply resume large-scale monetary quantitative easing like it did during COVID, those central banks would see the value of their reserves grow relative to the dollar.

Porter Stansberry [10:30] And that would make them progressively more powerful than we are. So that is a huge change in gravity globally with our monetary base. The second thing that most Americans do not understand is that it is not currently legally possible for the government to inflate away. It's roughly a hundred trillion dollars in Social Security and Medicare obligations that remain off the books. So no, we're not. Paying interest on those obligations, but those obligations are absolutely real and they are coming absolutely to the fore in the next seven years. What my book says, and what I believe is that by 2029, the reality of those debts will be impossible to ignore because they will they will be such a large and immediate danger to the current budget.

Porter Stansberry ⋮ So currently, the Social Security Administration says that the trust funds. Funds will run dry by 2032. But that, of course, is embedded in a lot of very rosy scenarios where inflation remains very low, employment remains very high, and there are no recessions. If anything changes about that, if we see inflation at 4% to 6% like it is now, or if you see unemployment go back up to just say 10%, which is not catastrophic, but would result in a huge decrease in Social Security Administration income, then those things are going to run out a lot that they could run out of money by 2029. And people don't understand this, that there is an automatic cut to benefits when those trust funds run dry.

Porter Stansberry ⋮ Automatically the benefits will fall By an estimated 30%. Now it all depends on what the cost of those things are by that time. It could be more, it could be a little bit less. But America is not ready for the political firestorm of an overnight cut to 30% of Social Security benefits. And so that is all baked in. And if you think that there is any kind of political will to either expand Social Security taxes or to cut Social Security benefits.

Porter Stansberry [12:44] I'm taking the other side of that bet. I I don't think that this is something that politically America is going to be able to solve before the clock runs out.

Marty Bent [12:55] What happens then? Then

Porter Stansberry [12:57] So what happens then is that there the the the benefits get cut and there is a tremendous social upheaval in the United States. Tremendous.

Marty Bent [13:10] it's funny, again, going aging myself as a millennial in my mid thirties. I think we talked about this last year too when you were on, but I think it's always important to remind people like my generation we're we've basically convinced ourselves or we've become convinced just looking at the numbers, like I'm never gonna see social security. And and to to your point

Porter Stansberry [13:30] I I I never will either, and I'm fifty four this year. It won't it will not exist in another decade. It's not possible.

Marty Bent [13:33] Yeah. And th why is it such a third rail if there's so many of us and maybe we're in the a very small minority of people who are actually paying attention and looking at the numbers, but it it's obviously a Ponzi scheme, quite literally. And like yeah. And it's like when when we have a conversation why is it such a political third rail? And I I think I know the answers is like people like their jibs, and if you're gonna get free stuff, you're gonna hate when when that free stuff gets taken from you.

Porter Stansberry [13:53] Always was. Well, the federal government is very clever when it seizes power. So the federal government found a way to get 12% of the national income under its direct control. How did they do that? Well, first of all, they told people, it's your money. You're going to pay into the system, but it belongs to you and you'll get it back when you need it. And the other way they did it was they said, and we're going to make your employer match your contribution. So Marty, you don't mind if I take six percent of your money as long as I make your employer give another six percent of their money to your account.

Porter Stansberry ⋮ So it was a perfect lie. I mean, you know, I've often wondered what's what's a better lie, the promise of eternal life or social security? But anytime someone's promising you, you know, your most fervent wish and for nothing, it's only going to be a lie. And you know, as you know, there the there's no there's no an ambiguity in the law whatsoever. Social Security is simply a general revenue tax. There is no account, he is not your money, that's been adjudicated in court many times, it doesn't belong to you, it never did. And the money has been spent. There is no there is no investment, there is no account.

Porter Stansberry ⋮ Is no lockbox. All the money was spent by the federal government and replaced with a piece of a paper from the Treasury that says IOU. But guess what? The Treasury is owned by the government. So it's it's a it's a complete Ponzi scheme. And I don't think most Americans realize that. And I also don't think they realize the enormous economic harm. Of giving the government 12% of our income for the last 75 years or however long it's been, sorry, been longer than that, 90 years. I mean, catastrophic capital allocation. Do you know how rich we would all be if our Social Security was simply invested in the SP 500?

Porter Stansberry ⋮ The average value of people when they retire would be $5 million.

Porter Stansberry [16:17] I I mean, but you c it doesn't matter all the facts you tell people. They'll say, that's too risky. We have to give it to the government. Well look, it's true. If you put the money in the market, it market the market may fail. But if you give the government the money, it will definitely fail.

Marty Bent [16:33] Well and I I think going back to the the first part of the conversation, going back to the Civil War, and even before that, like the the republic that the founding fathers set up and what triggered them to fight against England to take their independence. I I mean I think they would look at how much we're taxed. I mean Social Security just being one of those taxes, obviously income tax being the big one. And it's like w what are you guys doing?

Porter Stansberry [16:57] I couldn't believe it. It's just amazing that we put up with it. The idea w of withholding is completely a violation of due process clause. That should never happen. These things are all completely insane. And I think that after the the the fourth turning, after the reckoning of 2029, I think Americans are gonna have a whole different view of what happened in America over the last 90 years. I think they're going to look at it as the period of time where communism came to America. And they're not even going to believe it. They're not going to have anything to do with it going forward. You know, in 1930, the federal government was 3% of GDP.

Porter Stansberry ⋮ 3% of GDP. Today, if you include the healthcare industry, which is so government-regulated, it's essentially a part of government, government is about 60% of GDP. Okay. There's n there is just no way we can afford 20 times more government than we could in 1930. Nobody is that rich. And so there there has to be a reckoning and there has to be a full-scale reconsideration of what the proper role of government is in society. And fortunately, the American Founding Fathers thought of all this 250 years ago. Go read the Federalist Papers. It's absolutely brilliant. They realized the only way to keep the government in check was to set up competing governments.

Porter Stansberry ⋮ And that was the whole point of having the sovereign states, the whole point of having the Senate appointed by the state legislatures. Having all these checks and balances and not depending upon either the wisdom or the good, you know, either the wisdom or the ethics of legislators because they have neither.

Marty Bent [18:52] Yeah. And so what is what does this reckoning look like in your mind? 'Cause it seems like depending on where you look, vibes are either very low or very high. Obviously the AI energy energy infrastructure build out, the the reindustrialization effort that's been put underway by the Trump administration has a lot of people very excited about the future prospects of technological innovation and productivity and efficiency gains. in the US. But then again you have that that lingering sort of backdrop of the federal debt. and then not only that, if you look at private credit, private equity markets, a lot of them look like they're going to be massively disrupted by my AI making them obsolete and making the companies that they invested in obsolete. And you could see the beginnings of another credit crisis beginning to emerge.

Porter Stansberry [19:37] Mm-hmm. course, so every every boom and bust cycle has the same basic dynamics and that is when there has been so much credit created that the resulting gains in productivity can no longer support the debt payments, there's a crisis. And you definitely see that in software today. Right. Huge amounts of leverage was applied to building software companies. And great, it was wonderful. Now software is so cheap that no one can afford the the debt the debt service payment. So there's going to be a collapse. And if I I think the best model for this is to look at the railroad build out after the Civil War.

Porter Stansberry ⋮ Between nineteen sixty five and nineteen six sorry, nineteen sixty five. Between eighteen sixty five and eighteen seventy three, the amount of track miles in the United States doubled. So we'd been building railroads since the eighteen twenties. And in more or less a five year period, the amount of track miles doubled. And it happened because there had been a huge inflation. The government had printed money to finance the Civil War, and that inflation had run its course of the banking system and led to an enormous increase in lending, all of which went into railroad bonds, and the railroads built out everywhere, including railroads to nowhere. And I I think that Elon Musk is a brilliant entrepreneur.

Porter Stansberry ⋮ But the idea that we're going to Mars is a quintessential railroad to nowhere idea. There is no economy on Mars. You know, and so you see these kinds of ideas get funded during periods when credit is very easy, very cheap. And if you look at credit spreads, they have been the lowest of all time for about the last well since the end of COVID. So credit has never been cheaper in our economy ever. And it's going to produce excesses, and eventually those excesses will not meet their debt service payments, and there will be a rush for liquidity. I am saying, and what the book 2029 is all about is that for the first time since 1971, what is considered liquidity will have fundamentally changed.

Porter Stansberry ⋮ People are gonna run towards gold and towards Bitcoin, and they're not gonna run to treasury bonds. And that is what will bankrupt our government, and that is what will force an entire reordering of the global financial system. And lots of people have predicted this before, and it has not happened. But we're in the middle of the long.

Porter Stansberry [22:02] longest bear market and the bond market ever. And that is a result of the other central banks abandoning treasury bonds and going into gold. Those trends are going to continue. And in 2029, when the government cuts Social Security and talk about a K-shaped economy, every think about how many people make money from welfare payments and from Social Security payments. All those things dry up. And you're gonna see a you know huge spike in defaults. It'll be the it'll be the biggest debt default ever in the entire history of economics. And people are not gonna want the dollar anymore because they're gonna just print it. And so people are gonna people are gonna rush into things like timber.

Porter Stansberry ⋮ I don't know if you've read the book, but I have a whole chapter on a timber strategy that I think is very important for investors to understand. They're gonna rush into gold, they're gonna rush into Bitcoin, they're gonna rush into to foreign real estate in particular, and it it'll be a big reordering. And a lot of people who are very, very wealthy today on paper will find that they they're not nearly as wealthy as they thought.

Marty Bent [23:06] No. And it's funny that you brought up the railroad boom and bust because I fell in love with James J. Hill a couple of years ago and have read read as much about him and watched as many documentaries and he was the one who refused the government debt in the build out of the railroads and wound up being one of the most successful railroad titans 'cause he he focused on building railroads financially in a financially responsible way.

Porter Stansberry [23:14] he's the best. Can I tell you what else he did? He created the largest forest in the United States. So he was next-door neighbors with Friedrich Weyerhauser in Minneapolis. They lived next door to each other. And in 1901, he sold all of the land that he had been granted for building the Northern Railroad.

Marty Bent [23:40] I didn't r I didn't realize that.

Porter Stansberry [23:57] sold it to Weyerhauser, as I believe, I might have mine facts a little bit wrong here, but for around seven million dollars, which was the largest real estate transaction since the Louisiana purchase. And that forest is now what runs Wirehouser, which is the largest timber products company in the United States. About 30% of every single piece of timber that you see in America comes from Wirehauser's forest, which is 11 million acres. And that that that's all because of the the capital that was aggregated under James J. Hill, where he took federal government land that was being wasted and he turned it into a huge forest.

Porter Stansberry ⋮ And I this happened maybe two or three years before his death. I can't remember exactly when he died. But when the papers asked him, why are you why are you doing this? Why are you selling this enormous trophy asset? And he said, I'm you know, I'm not doing it for me. I have all the money I need. I'm doing it because we need a steward of his land who can make it valuable. This is for my grandchildren. And I think that kind of nobility is very much lost for most of the successful entrepreneurs in America today. And in part has been lost because of estate taxes.

Porter Stansberry ⋮ It doesn't do you any good to make investments for your grandchildren when you're going to have to give half of them to the government when you die. So anyways, I just I th I love James J. Hill too and it's a big part of my book and a big part of a a good way for people to think about a s a a safe place to hold their wealth through this monetary reset.

Marty Bent [25:27] Yeah, and that's I mean, if you haven't read up on James J. Hill, go do it. 'Cause again, going back to that estate planning leaving a legacy. I mean he's an example of patient capital. I mean, the way he would r invest in the farmland around the rails so that we would have tonnage to actually put on the cars to to deliver to some other part of the country was miraculous or incredibly creative, smart, methodical and bringing this forward to today, we've completely gotten away from that where it's fast, fast money, thinking about how how much you can squeeze out between quarterly earnings reports and that

Porter Stansberry [26:04] Not everybody. I I think you could look at I would look at Jeff Bezos as the equivalent of James J. Hill today. incredible vertical integration, incredible patient capital, incredible foresight, building everything for what it'll be worth in twenty years instead of two months. I d I don't think there's a you I mean you can argue Elon Musk, but I don't think there's been a better entrepreneur in American history than than than Bezos.

Marty Bent [26:10] You think so? Yeah. I I I I can attest to the amount of Amazon packages I get on a weekly basis. It's it's definitely a a service we use in the Ben household pretty consistently.

Porter Stansberry [26:41] Think about that. They're gonna be the first company trillion dollars in revenue.

Marty Bent [26:44] Yeah. It's insane. And then they have the whole cloud hosting side of things, which is incredibly high margin for them as well.

Porter Stansberry [26:52] Yeah, and they've become a media empire as well.

Marty Bent [26:55] bring this back to twenty twenty nine, I can see it's going one of two directions. I'm sure you've noticed the the rise of democratic socialist in the United States. And it seems like if there is going to be a forth turning and a discussion about the United States moving forward post twenty twenty nine, there's gonna be two sides to it, one of which is going to try to pull us even further into the communist tilt. And the other side, which I I think you and I are on, which is free markets. How do you see that playing out?

Porter Stansberry [27:27] I think there's gonna be a civil war. Yeah. I think it'll erupt at some point in the early twenty thirties and I think that'll be part of the fourth turning. fourth turnings are always the end of of a a commonly believed falsehood. So the the last real big forth turning was the end of the Civil War, which led to a war. And what was the falsehood? Well the falsehood was that chattel slavery was economic and it's not. And so that that that that belief had to be completely dispelled and people fight over over false beliefs all the time. The false belief in America today, the biggest false belief that I see is is is the is the idea of of what they now call euphemistically equity, the idea that we're all the same, the idea that and and especially the impact of that through through our legal system.

Porter Stansberry ⋮ The civil you should read the Civil Rights Act of 1991. If you read it, I think you'll be shocked. Because what it says is that any law that produces a disparate impact and outcomes is on its face racism and is is and and is grounds for a lawsuit. So for example, if you are running a city fire department and you have a disparate outcome Of the basic reading tests that you give to firefighters. And as a result, you only hire the people who can read, but that leads to more white people being hired than black people, then your fire department is guilty of racism and is subject to civil lawsuits.

Porter Stansberry [29:14] And so cities are going broke because they're trying to hire firefighters who can read. That that same disparate impact legal theory is one of the reasons why public schools have fallen apart. if you have A code of conduct that results in more black students being suspended than white students, you have to redo your code of conduct. You're basically not allowed to suspend black students for violent behavior, even though incidents of black students being violent or multiples of white students being violent. Now, Porter, you can't say that that's racist. I'm not saying that they're creating violence because they're black. I'm saying, as an objective measure, black students are more likely to engage in violence in public.

Porter Stansberry ⋮ schools than white students. Therefore, a fair and non-biased discipline policy would result in more black students being suspended per capita than white students. That's how the law should work. It should be colorblind. But our society today has been completely turned upside down, where we're forced to engage in tilting the scales to produce equal outcomes. And that is going to produce and will produce more and more rage and anger. People people don't want to see their children Be denied opportunities and be denied recognition for their accomplishments so that people who don't deserve that recognition can be awarded. And that's gonna cause really big social problems.

Marty Bent [30:49] Yeah, I mean they're already starting to bubble up, right? You look at the whole DEI craze. I forget what publication. It might have been in New York or even. I forget what it was, but they ha they came out with that piece last year. I think last fall or last winter that highlighted the the systemic prejudice that was exhibited against white white males specifically. More specifically in the the tech sector. I'm sure you saw but that woman who took the the trash can, the Nyx Color trash can and dumped it out. People sleuth what her job was and she was a it a an executive of JP Morgan for DEI, making three hundred grand a year and should not have been in that spot. But your

Porter Stansberry [31:32] If you if you go back and you look at, you know, carefully done surveys, 30 years ago there was no systemic racism in the United States. Racism is growing. And it's growing because if you work in a large organization where you've had a whole bunch of people who don't deserve their jobs, who have been hired andor promoted, and you have to deal with them, it starts to make you really resent them. Your job gets harder because there's more incompetence and more roles and more places. And you know, you know, the idea that, you know, you want the idea that you want women in combat roles is insanity. and there's just lots of this throughout our society, more than I can and you, you and I can describe here. But I'll give you one I'll give you one clear example. do you know what the Delta Force is?

Marty Bent [32:26] Yes.

Porter Stansberry [32:27] So the Delta Force is the most elite small arms fighting group in the entire world. Okay? How many black members have ever qualified for Delta Force? That would be zero. So if you have impossibly high standards and you have very low wages, there are no qualified black people that want that job. That's fine. That's absolutely fine. I don't think it should matter what color the Delta Force members are. I do think it should matter that they have 130 IQ and that they can run sixty miles in a day. You know, these people are incredible warriors. And I think that's more important than whether there's a woman member or whether really clear about this, I'm not suggesting that a black person couldn't qualify for Delta Force.

Porter Stansberry ⋮ I'm saying that if you're that talented of a black person, there's such better opportunities for you in America. You're much more unlikely to want to join. And that is okay. It's completely normal for society to have distributions like that. And and I'll tell you one more thing about all this. You think, well, Porter, this is no great myth. This is not going to destroy the country. yeah? If you go back and you study what really caused the entire mortgage crisis, you're going to discover that the entire problem was DEI and mortgage lending. The entire problem was that people who are not credit worthy were deemed credit worthy because of equity decisions.

Porter Stansberry [34:09] That is what destroyed the entire mortgage market. It only takes about eleven percent of all the mortgages going bad to destroy the entire banking system. Look at at the percentage points that Subprime borrowers ended up making of the total market. It's about it was about eleven percent. And who would who were all the subprime buyers? People who could not qualify for a mortgage. They should have never been given a mortgage, and they were because of specific federal rules designed to increase minority home ownership. Man, I got no problem about any person of any color buying a house. But as someone who's a part of the banking system, I they damn well better be qualified and they damn well better repay the loan. And unfortunately, they didn't.

Marty Bent [35:00] Yeah, you got a whole name for it. Ninja loans. No income, no job. Here's the one.

Porter Stansberry [35:04] So anyways, these these problems ha can have catastrophic social impacts. And we're well on our way to that point.

Marty Bent [35:13] Yeah. That's I mean Yeah, the whole accelerate versus smooth sort of landing, but I I don't think a smooth landing is is possible on on a timescale that is short enough to to enjoy in your life term. And

Porter Stansberry [35:34] The question for me is not whether or not this is a bubble. The question is how big it can get. And I'm not suggesting that you know, I'm no Serdamus. I think 2029 is a fair guess. But, you know, the PE multiples in the market today are not obscene. And if you look, I mean, Tokyo stocks went to ninety times earnings. You know, the SP was trading at fifty times earnings in 2000. Like it can definitely get the bubble can get much bigger from here. So I I I you know, I'm not suggesting that any of these things will happen tomorrow. What I'm suggesting is that these things always resolve in the same way. Eventually, the amount of credit becomes so large it cannot be sustained. And there and the result is a giant preference for liquidity. And the question is whether or not that liquidity will be treasury bonds or not. And I'm saying that it won't be.

Marty Bent [36:32] So this gets this gets to the point, like preparing for this. You mentioned Bitcoin, gold, timber, a big part of your book. and you can imagine that the AI trade's gonna continue to some degree, at least for the foreseeable future. So there could be some irrational exuberance. How how would you tell somebody who's my age, got a family, a house, a mortgage right now has sustainable income. three years out from twenty twenty nine or even if it's not twenty twenty nine, I think it's safe to say looking at the off bo balance sheet liabilities that they're gonna hit a wall relatively soon. how how best to prepare, both on the financial side and then socially, 'cause that's a I think the needle that needs to be threaded, or maybe it won't be threaded, maybe it'll be messy, like you said, with the Civil War, but on the on the back end, sort of re architecting how we interact with the federal government and getting back to sort of a federalist republic of independent states.

Porter Stansberry [37:36] Well about about let me start with the civil war idea because people think that I'm talking about blues and grays and lining up and, you know, having pitched battles. That's not how most civil wars occur at all. You know, I I've been around civil wars. I I I spent some time in Guatemala in the nineteen eighties. And civil wars are mostly insurgencies and they're your neighbors, so you don't know who's on which side. think about the civil war that o occurred in Ireland for for almost a hundred years in the nineteen hundreds. That's the kind of civil war that I'm expecting. We've had the civil wars in America before.

Porter Stansberry ⋮ They weren't called them, but if you look at the French and Indian War of the 1750s, that was a civil war. If you look at the American Revolution, it was a civil war. There were loyalists and there were patriots living next door to one another. And and the the the that's the kind of thing that I think you're gonna see again. I think there's gonna be The people who want and who believe that government should redistribute even more wealth and power, and there's gonna be people who believe the government should get out of our lives. And somehow the political parties will emerge, names will emerge, groups will emerge to represent those ideas.

Porter Stansberry ⋮ You're seeing that happen, by the way. It'll it'll happen here too, for the same reasons. And what will spark the violence is that at some point the system will become o overwhelmed so that people can't survive. And that's when the violence will emerge. Right now, people can't afford to buy a home and have children. But by 2029, they won't be they won't be able to to get enough food to eat or something like that. And you'll you'll see a complete change in the nature of our political system as a result. and how you prepare for that, I think, is is not too difficult. you want to make sure that you keep about twenty-five percent of your net worth liquid.

Porter Stansberry ⋮ And this is in no one's playbook today, but by liquid I mean gold.

Porter Stansberry [39:45] Streaming stocks and Bitcoin. And then I think that you should have a big part of your wealth and stuff that is very safe and very stable. Historically, that's been bonds. I don't think that bonds are investable today because our government is just going to print more money and devalue them. So I recommend people become experts in property and casualty insurance. And those are companies that own big piles of bonds, but are able to actively manage them for duration risk. Excuse me. And of course to have underwriting units on top. If you look at Berkshire Hathaway, half of Berkshire's athlet assets have been invested in property and cash casualty insurance for fifty years.

Porter Stansberry ⋮ So a good way of of safely making a lot of money. And then I also believe that people should be invested in stocks. And I get a lot of grief for this because people are like, What you're saying there's a crisis? Yeah, but I ain't saying there's gonna be a crisis, but people are gonna still buy Hershey bars, they're still gonna smoke Philip Moore cigarettes, they're still gonna drink Coca-Cola. And if you if you know how to analyze businesses and you're able to buy them at a fair price, Common stock has long been a great asset protection scheme. There were a lot of companies that never cut their dividends during the Great Depression.

Porter Stansberry ⋮ And there will be companies that don't cut their dividends during what happens in the 2029 financial reset. So those are those are the buckets that I think are most important. So it's stocks via very conservative, very high-quality businesses. It's bonds via property and casualty insurance. And it's gold and Bitcoin for liquidity. And if you if you if you if you're even more conservative, you can add a fourth bucket, which is cash. But I'm very I'm very, very unwilling to own the US dollar. I I just I just don't think that it is

Porter Stansberry [41:40] I don't think it is a sound store of value. So I try my hardest to I use American Express for 30 day credit and I try to hold no dollars. I say online all the time, if you use their currency, you'll be their slave. And I believe that's true.

Marty Bent [41:58] I'm in a very similar boat there. Somebody who has most of my my liquid net worth in Bitcoin has for a while. It has worked out well for me. not financial advice, but I think I completely agreed. You don't want to be a slave to their monetary system. It's a great way to opt out. But on that note, we're talking about individuals. We've we've run some surveys on our audience, we have a lot of business owners in in our audience. as well. How would you advise those running businesses that are cash flowing at a certain level to to manage their their risk, particularly on the debt side?

Porter Stansberry [42:33] Yeah. Well, I think that the more debt that you can get into with fixed long term rates, the more debt you should hold. the very the the the only wise thing to do in the face of a monetary dissolution is borrow as much of it as you can before it dissolves. I'm actually buying a house right now in Winter Park. My family's moving from New York City to Winter Park, Florida. And I don't need to take a mortgage financially, but I'm going to take one because I want a fifteen year fixed rate bet that the value of the dollar declines.

Marty Bent [43:15] That move to Florida being driven by some communistic tendencies in New York City?

Porter Stansberry [43:20] No, it's just really a change of of life for us. my wife was was working as a model in Manhattan, so we really had to have an apartment here. And we've just had a baby and her modeling career is on hold for an indefinite period of time, so we don't have to be here. And we never particularly liked the city or the people who live here, so we're we're grateful to be leaving.

Marty Bent [43:39] Yeah, it's it's crazy times. Do you think we're in like like reading the T lease now, do you think we're in a like a lull period where people are hot on this AI trade and missing the forest for the trees of this ticking time bomb behind the scenes?

Porter Stansberry [43:59] Man, I hesitate to say anything about this in terms of short term timing, but I really do think that the bloom is off of the AI rose. what I've seen is the people who are paying for AI, their stock prices are now declining. And that that means it's over because the only way that they can fund these enormous build outs is if their stock prices stay high. And so I I think that you're I think that the AI trade is is is in its last legs. I don't know what the next what I wish I did of course, I don't know what the next hot trade is going to be.

Porter Stansberry ⋮ but it'll probably be whoever best figures out figures out how to monetize the compute power of AI. So not the people who are building it, not the component makers, but the people who actually build the applications that make it work. A great example of that would be I saw the other day there's a new self-driving business that where they just basically strap some equipment onto existing vehicles and it uses AI to do all the self-driving. I think that thing could make a ton of money. So I think the next big leg up will be physical AI, robotics, self-driving cars, I can imagine whole kitchens that operate with AI robotically, you know, AI AI restaurants.

Porter Stansberry ⋮ I think that the the application of AI is gonna be the next big trade, not the build out of AI and not the components of AI.

Marty Bent [45:29] Yeah, it's having been using any on the the business operation side here at TFTC, there's definitely value if you know how to apply it correctly. I think that's that's what everybody's trying to figure out right now. And it'll be interesting to see how that manifests in companies, new services that come to market. And do you view this as the next industrial revolution?

Porter Stansberry [45:52] absolutely, for sure. You think about it, who made all the money on the internet? It wasn't the people who built the pipes. It wasn't the people who built the the the Erb Dope lasers, it wasn't Corning, it it wasn't the components makers, it was the people who built the the f applications that changed the world. It was Facebook, it was Google, it was Amazon. It was Netflix. And the same will be true with AI. The big winners will be the people who build the applications that capture huge percentages of consumer spend.

Marty Bent [46:25] Well, this has been an awesome catch up. I know we got started late. I wanna be respectful of your time. We're coming up on an hour. anything we didn't touch on that you think we should make the audience aware of?

Porter Stansberry [46:37] No, I'd just like to t I'd like to tell everybody that I I have a book out there. It's it's a whopping ten dollars. It's it's called Twenty Twenty-Nine, The End of America. It's an update to a book I originally wrote in twenty eleven, and it really talks about the underlying eco economic and monetary trends that are driving the world that we see, especially the progressive bubbles and the big bear market that's ongoing in the US bond market. I hope you'll take a take a look at it. it's gotten, I've had like 300 reviews, all five stars. And I think it's I think it's an interesting potential perspective on what happens next.

Porter Stansberry ⋮ I'm not pretending to be an astronomist, but whether whether these things play out exactly as I suggest or whether the future changes, which it will, I think it's still really good to look at these ideas and to and there's a lot also just good finance in there. The timber strategy is valuable, the honeycomb strategy is valuable, the permanent portfolio that I learned from Harry Brown is very valuable. So there's a lot of good content in there, and I've gotten great reviews, so I hope you'll check it out.

Marty Bent [47:39] Check it out. In the end of America, it might not be the worst thing if America and its current state got away from the the founding father's vision of what this should be. Maybe it's a rebirth in a way.

Porter Stansberry [47:51] Very good. Thanks for having me, Marty.

Marty Bent [47:53] Alright, Porter, peace and love freaks. Tiki.