Jim Brown Exposes Financial Repression and Its Impact on Savers

Foreign.

Ladies and gentlemen, welcome to an October edition of the Secular Foxhole podcast.Today we're thrilled to have author and economist perhaps Jim Brown.He has written a book called A Black Hole in Economics.Hi, Jim, can you describe your book?And then we want to talk about the most recent substack article you wrote about Mr. Trump's foray into inflation.

Well, thank you for having me on.I really appreciate the opportunity.So the entire title is A Black Hole in Economics, Money Creation and Its Consequences.And I think many people would be surprised to learn that financial experts even fumble when they are faced with certain questions like where does money come from, how is it created, and why should anybody care about it?There's a big fog of ignorance around this and it's not just limited to the public, it stretches to pundits and politicians and academics, and including legislators, including some of the people who regulate our financial institutions.But on a topic like this, I think ignorance is dangerous because money creation can be a good thing or in the hands of the wrong people.And new money given to the wrong people, it can be a very destructive thing.And I first, I'll tell you a quick story.I first realized this was a problem when I was discussing a few years ago, I was discussing with my daughter and son in law, I was discussing their new mortgage and I said, just casual, I said, oh, isn't it interesting that that $300,000, the bank loan to you, that money didn't even exist until they actually made the loan.They just deposited it in your account.They just created it out of thin air.And my son in law looked at me like I was nuts.And he says, no, no.He said banks lend out other people's money.They take savings, some of the savings that people put in banks, and they lend some of that out to you.And he said, no, that's not the way it works.No, there was, I think that's the general, that's the general rule.

Yeah, I mean the general knowledge among the populace, I think that's.Yeah, yeah.

And that's money.That's actually a model, an actual theory of banking that is widely taught in business schools today, I think it's actually still the majority position taught in business schools.And even though it's been refuted pretty definitively by one economist in particular, Richard Warner, who wrote some brilliant papers which I Learned about maybe 15 years ago, this knowledge has not filtered out to the academia and definitely not to the general public.It is making headway very strongly in the investment community.So it's whereas 10 years ago many investors did not know this.I think well informed investors now do and that's also a problem because now investors are in a position to benefit from this or at least anticipate and mitigate the effects of excessive money creation.But the average person, the average salary earner doesn't have a clue what they're doing.So I see it as an issue.

So your book, I don't have it in front of me.I have it, but I don't have it in front of me.So go on to some.Can you further expand on what else should discuss?I mean, because your article in the substack, you talk about financial repression, which is a term I've never heard in my life and I've been around 70 plus years.Go ahead please.

Yeah, so we have a real problem in the country that and I consider it the biggest financial economic issue of the day.Many others do.And it's the excessive unpayable debt that our government has incurred.And it's not just the 40 trillion you hear about, you know, rapidly rising.That's actually not the worst of it.The worst of it is the unfunded obligations in the future.See, our wise politicians have not just promised, they're not just paying back, trying to pay back that 40 trillion.They have promised in advance every in, just take Medicare for example.They haven't promised dollars, they have an open ended promise to pay for everything that happens Once you're over 65, no matter how the technology goes, no matter how expensive it gets.So they owe knee replacements, they owe brain surgery, they own in unlimited amounts including you know, possibly extending life for ridiculous blanks.And it all falls on the collective, it all falls on the social securities is in a similar situation because it's indexed to the consumer price index.And every politician has promised that it will never be taken away.And just those entitlements alone, Social Security, Medicare, Medicaid, veterans benefits, these types of things, they account for 70% of the spending that we do every year.It's about 5 trillion every year.Of the 7 trillion we spend, then there's another trillion for defense and then there's another trillion to pay interest on the debt that's already, that's already exists, accumulated.

Yeah.

And these are becoming unpayable.The interest has gotten so big as part of the total budget that we're on the verge of having to borrow just to pay the interest.And I had a little example of this in the last stack I did.I guess both the stack and the YouTube.I did you can imagine yourself in this position with a bank and you get your credit card bill wound up so big that you know, and the interest is so high that you can no longer pay the interest and you have to borrow more to pay the interest, which then raises the debt and then also raises the interest cost.And it doesn't take a genius to see the doom loop that you're in.And you will have to default.You will have to declare bankruptcy.But our government will not do either of those.Our government will not and cannot do because that is unthinkable.That's disastrous.And by the way, that would be if our government ever did actually default, actually fail to pay the interest on its debt, it would be pretty catastrophic because U.S. treasury bonds, bills and notes stand at the center of the collateral system that fuels the entire world economic system.So it's unthinkable to default.And hence the government is driven into a corner.So this is where financial repression comes in.They need to raise revenue.And continue to borrow without raising their interest costs.How do they do that?They run the economy hot, stimulate inflation in the economy.That raises asset prices, that raises price, consumer prices.It raises wages.That raises the tax base.That makes the tax base because, because of the income, then they can, then they can collect more tax.But that causes the government, that kind of inflation causes the government a problem too.As inflation goes up, interest rates go up.So what does the government have to do?They have to suppress interest rates.So this is what financial repression essentially is.It's allowing inflation to rise, taxes to rise, but repressing interest rates, that's the savings rate for most people.See, it's debt for the government, but it's also a savings asset.Treasury bills.And of course all interest rates are keyed off treasury bills, bonds and notes.And so you are suppressing the savings rate while allowing inflation to run.And this slowly strangles savers, it slowly strangles the middle class.And it transfers real wealth from where the real wealth is in this country, from the middle class and the upper middle class to the government.See, it cheapens the debt, but it also cheapens the asset that the debt represents.And the asset that the debt represents are the savings vehicles that you put your money into.And they're either whether you invest directly in treasury bills, bonds and notes, or whether you go through an intermediary who does, or whether you go through an intermediary that invests in other things, your rate of return, real rate of return will be suppressed.And the government's Bills, real bill, real cost will be suppressed.And it's pretty obvious when you think of it that way, who's paying for that.And people don't know it.It's, it's a.You've always heard the expression inflation is a silent tax.Well, this is the way I just described it is one way that it works that way.There, there are others.But the problem with this.I'll.Let me stop and let you ask question.

No, I'm sorry.Please finish your thought.

The real problem with this is first, no one is going to, you know, ring a bell and say, hey, the government's not going to ring a bell and say, hey, from now on we're engaged in financial repression.No, they will call it anything but that.And all the various things they can do to stimulate, to raise taxes, to tax those who won't squawk about it, to cheat on the cpi, to suppress interest rates, all the things they can do to transfer wealth from the people to the government.They will not announce.They've never.And there are historical, many historical examples of this and we know they won't do it.And if you think about how people, since they really don't understand this, they really don't understand how this works, they're not going to.They're going to think the problem is somewhere else.They're going to think the problem is, oh, it's those greedy grocery store owners who are raising prices or it's those greedy corporate guys who are, you know, raising prices.It's corporate greed, it's excessive profits.And you know, people like AOC will, you know, gain traction because she says something that seems on the surface plausible and it's what people want to hear and so forth.

So I hear you.I know what you mean.

It's a spiral of both economic problem and information problem and political problems and so forth.No one will tell you something.It's very, very hard to see.Oh, I'm sorry.Did we lose?

Okay, Blair, it's your connection.

It's my connection.Yep.So let's see.Yeah, we're having a rainstorm here.

Yeah.So please continue.Yim.But I could you pointed out about the deficit.If some other countries and leaders will point out the situation of the United States of America, what could happen then?

Are you asking?Okay, so I'm not sure I understand.

Yeah, about the big debt and you can't pay the interest and you're pushing it forward for the future.

I think other countries have already taken note of this because for about the actual amount of U.S. treasuries owned by other governments who run a trade surplus with the USA that has peaked, at least as far as official holdings go.So central banks, with the exception of Japan and the uk, central banks are not really buying US Treasuries anymore.They're buying gold.

Actually, what was my next question?

And in one of my pieces, I think it was this recently.

To follow up on that version of.

The piece you mentioned, I have a chart in there that shows that gold reserves have now surpassed U.S. treasury reserves in the official reserves of Foreign.Yeah, foreign.Financial.Foreign, what we would call monetary authorities.That includes central banks and sovereign wealth funds and that sort of thing.

Yeah, because we haven't seen the portal yet.You know, Elon Musk, he promised that.That they would have a visit and show the gold.Right.But they didn't do that.

I'm sorry, you said something about Elon Musk?

Yeah, Elon Musk, when he was there for a short time, he promised that they would show the gold reserve when.

He was doing the Doge thing.

Yeah.

Which I thought was a wonderful idea, and I'm sorry it didn't work out a little better for them, but yeah, he wanted a full audit of the gold, both in Fort Knox and the rest of it that's in some vaults underneath the ground in New York City, right next door to JP Morgan, I think.And actually, I don't worry about that quite so much.

Okay.

I suspect that the gold, 8,133 tons of gold that the US government says it has.I suspect it's there, okay?But I think it might not be there in exactly the form that it was there in the first place.And so in other words, they may have over the years loaned this gold out and then taken back in kind, different kinds of gold and so forth.So I suspect that it could be.I don't know about this.It could be a little embarrassing to reveal that, but I suspect the gold is actually there.They just denied that it's gone too many times.I mean, Scott Bessen has said, no, it's there, it's audited, it's all there.So he would be in deep trouble.That would be highly impeachable, obviously, if.

That was fascinating answer, because if we have time, we will ask about some of your engagement in gold money and other things like that.So we'll.Or monetary.What is called monetary.

Monetary Metals is a company that leases and loans gold from those who save.From those who save gold to clients who need it in their businesses.And it's a very rapidly growing company and I sit on the board of directors of that.

Yeah, very nice.

So please continue there.

Thank you.Thank you.Two quick things.I noticed recently that gold advocate Judy Shelton, who was recently, I guess, turned out for one of the Fed posts, she now is in the ear of Scott Bessett as far as treasury tying gold to treasury bonds as an inducement for other countries to buy the treasury bond.

Yes, she wants to issue a gold backed bond.I don't know if that's exactly why she was hired as an advisor, but that is something she wants to do and something that she says Trump promised her he would do, but he was supposed to do it by July 4th of this year, but that didn't happen.I think they thought the timing wasn't great.When you think about it, the US Government has a lot of gold.It has the largest official gold holdings of any country in the world, although we're pretty sure those that China has a lot more than they report.So China is probably the actual largest holder, but they're the largest miner of gold and the largest importer of gold and they encourage their citizens to save in gold.So they probably have the most.But Judy is a sound money advocate and she wants to issue this bond that would pay many years from now in a certain amount of gold and then let the market price the bond so that it would reflect a price of gold relative to Treasuries, which is an interesting idea.I just read the press release dated October 9th announcing Judy Shelton.And what was interesting to me was a small little paragraph there that said the reason she was hired, she was hired to advise on currencies.Well, to me that's pretty close to currencies that exchange.That's pretty close to gold because gold is like an international currency that's used for settling accounts.And of course she's a gold advocate.I don't know if people know this.Scott Besant, before he took this job, ran a hedge fund and his largest position was gold.He's very much an advocate in terms of personal investing.The 8,133 tons of gold that the US government owned owns is today worth, I think it's about a billion, a trillion and a half dollars.It wouldn't make a huge dent in the deficit.But if a much higher gold price would make a difference and more to the point, much higher gold price, at a much higher gold price, you could borrow against that gold using it as collateral and at a very low rate and reduce the government's funding costs.So I think gold is an ace that they're not playing yet.And I suspect at some point they, they meaning the treasury and the US Government and so forth will, will use this gold.They, they completely underplay it right now.I mean the gold is on the books of the US treasury right now at $42 an ounce.They don't even like it.An asset.Yeah, it would be very simple.It would be very simple to raise the, you know, bring it up to market value, which itself would probably have a positive effect on the, on the price.But anyway, that's, that's this.I know this sounds that this may sound like a little science fiction.I don't think anything like this is going to happen tomorrow or next year or anything.It could, but it, it's something that I promise you.Scott Bessant is thinking about this.He knows he has that valuable asset and I think he knows way better than I do how to monetize it and make it work for our impossible debt situation.

Well, I hope you're right.But a quick note on the Doge thing, I was encouraged, but the way I myself once, once it all went down, if you will, it looked like, you know, they just went after, they just wanted to hack.They didn't have a long plane, long term plan or, you know, I didn't have any real long term plan about how to actually reduce the agencies or get rid of agencies or get rid of the, this, that and the next day they just wanted to hack away.Yeah, and that's not the, that's not the way to do it.You need a long term plan.Even if two years, five years, whatever, instead of okay, let's get it all done right now in my first, my last term, if you will.And nowhere is it now it's, it's, they've just gone up another 2 billion in debt, you know, or 2 trillion in debt, you know.

Well, it didn't, I mean, I think he didn't, didn't Elon say he was going to find a trillion dollars in fraud and he found, or in, in waste and fraud and he found roughly 200 billion or something.So that, but to me it sort of set a, a good precedent in that.I mean that it was not a, my view is not a total bust.I mean they did, did uncover some terrible abuse and waste and fraud and I think most of that's been eliminated, what they did find.So I, I suspect that the spirit of Doge is just sleeping.

You know, it'll agree with that part.I mean that.

And you, and you can see.And I even wrote about this at the beginning of this year.I said this will be the year of fraud.Well, are, was that right?Yes.I mean, look at all the fraud that, that this DOJ is prosecuting.And it's not just, it's a lot of, it's financial fraud, some of it's voter fraud.But they are finding a lot of, you know, in a, in a system like ours where you're giving away other people's money, where our government is and there's little or no accountability, how could there not be hundreds of billions in fraud?We know it's out there and I applaud the effort to find it.

Yeah, well, Minnesota is the test case, I guess.Oh gosh.At California.I mean, my goodness.

Yeah, it's hard to find there because, you know, it's all covered up by sort of a left leftist leaning bureaucracy that they all have an interest in it.So what are you going to do?

Oh yeah, yeah, yeah, yeah.

Well, you.

One of the things that struck me in your, the recent article that we're, we're talking about and it bothers me, it frightens me in a way because you say that it's going to affect insurance companies, banks, retirement funds and so on and so forth.I'm afraid most of that could be wiped out.And you know, what do you say?

I say probably not necessarily wiped out, although you certainly could have another implosion, a certain meltdown like before.And if that's the case, I don't think the Fed, the government will have any choice but to do what they did before and monetize the bad debt effectively.They replaced the bad debt with dollars with new dollars and it inflates everything.It's not good, but I think they will be.I think, I don't know.I think institutions like that can be saved by a determined central bank that wants to create money.I mean, that's what they did in 2008 and 9.I think if they hadn't and let the banks go and let them reconstitute, we'd been way better off.

Oh yeah, of course we would.

But we're so far down this road now and this debt is so government debt is such a habit knit part of just about everybody's asset base in some way that you can't let it go.Maybe if you go back to this for a minute, when a government is in a position like ours where they have debts that they can't pay and this is borne out by history, you could Default.And that would be cataclysmic, especially for the leader of the free world.Or you could try to raise taxes, which our government's not going to do and which would cause a big recession, which would cause a huge economic stimulus which would probably get right back into the deficit problem again.You could cut entitlements, which would be the honest thing to do, cut the spending.But that isn't going to happen because no one's ready yet.I mean we're not at the point of Argentina yet where the people had to live in poverty for 30 years before they would finally, finally believe someone like Javier Malay who said there is no money, I can't pay you, but elect me anyway.No, no, we are not ready for that.We're a long way from that.So if you can't do one of those three things, what else do you do?You have to default slowly and silently through this financial repression that I'm describing.This is the way they've done it.Now we have interesting historical examples of this.France after the second and I write about this in chapter seven of my book France after this, the second world war from like 1946-51 or so, they let their GDP rise terrifically while they basically froze their debt.And they were, they inflated their way out of their debt in just a few years at now this is a war torn country.They didn't, they didn't notice what was happening.They were too busy trying to rebuild their blown up villages.Right, right.So this in other words, never let a crisis go to waste.So, so they, they came out of their, their terrible debt problem in relatively quickly.England was different.England from about 1950 to you know, 35 years till 1985, they suppressed interest rates, they made people invest in, in British bonds and they let inflation run.And so gradually you couldn't save any money in England during those years.But you know, the shopkeepers and the, and the average wage earners, they got by okay, but you couldn't accumulate any wealth.That's more the scenario that I think might, we might need to worry about though it won't be, undoubtedly will not be exactly like that.But you know, I say that a determined government, if it wants to pay off its debts is going to figure out a way to do it, you know, depreciated money.So.

Okay, okay.Getting back to your recent article, you mentioned that Trump is caught in a couple of contradictions.

Yeah.

Can you elaborate?

Sure.So this article, I didn't see this article, this Time article or the Forbes article That, or even the Wall Street Journal article that pointed this interview out.I caught it in a little.I have a. I get a nightly.Late at night, I get a market summary.And I. I caught a little blurb of this.And I said, wait a minute.He said, and this got very little attraction in the media, just only a few places.Although now, a week later, I'm seeing it everywhere.So, you know, he said, certain levels of inflation will pay off that debt, government debt, rapidly, very rapidly repeated that.And then he went on to say that, oh, I want.I've told the Fed to get interest rates down to 1%.They should be 0%.How can I pay off the debt, you know, if.If interest rates are so high, they need to get back to 1%.And then he said, quote, now you can do it.Pay off the debt through other means.I don't want to tell you what those means are, but you can pay off the debt through other means.And I thought, whoa.He is saying all this out loud that I and others have been talking about.He's talking about letting inflation run and holding down interest rates.And since then, by the way, I found other places and other quotes where he's alluded to this, but not this directly.Now, the contradictions you're talking about were interesting.Trump constantly yells about, oh, inflation's so high, we inherited from Joe Biden.So if it's inflation that's hurting people, he blames that on the previous president.But then at the same time, he says it's the solution to paying off the debt.So.And you know how he talks.He wants it both ways.And so I guess I shouldn't be surprised, but he definitely is trying to straddle both sides of the fence here, which is not surprising because that is exactly what financial repression does.It tricks people into thinking things are okay, maybe just they're a little slow.So there's a great economist named Russell Napier, who's a.Someone I really have taken inspiration from, and he just has a very simple definition of financial repression.Now, he has built the theory out in detail, but he says, at the end of the day, financial repression is stealing old people's money slowly.And, you know, think about it.It's.It's the savings that get eroded.That's exactly what happens.

Yeah, yeah.Now, does Mr. Napier.Is he.Does he have any books or.

He is a. Yeah, he runs a newsletter called the Solid Ground Newsletter.It's for institutional investors.I warn you, it's quite expensive.

Oh, sure.

I just pony up and it's also quite.Here, I'll show you.You get this fortnightly, okay?It's quite sophisticated and you'll have to, if you're new to this, you'll have to learn to read it.But you know, it's well within your.If you want to do this.It's very sophisticated.And he concentrates on the international repercussions of financial repression.What we've been talking about today is how it will affect an individual person in the USA mainly.And that's probably the best thing for us to talk about, by the way.You know what?

Sure, sure, sure.

What you do because, because this, you know, I said earlier, this is not something that the government will announce if they engage in, you know, yield curve control, for example, which I think they're already doing.I wrote about this back in August.They won't call it yield curve control, but what they're doing, they're suppressing interest rates to lower the cost of funding the government.When they do these things, they're not going to tell you what they are.They're going to call them something else.And there's nothing any individual.Here's.This sounds hopeless, but I'm actually optimistic on this point.There's nothing any individual can do to stop this any more than an individual could stop a rising tide, you know, or stem a flood.But what you can do is you can protect yourself and your family and your individual situation and hopefully, maybe even if you can foresee what's happening just a little bit, you can both preserve your wealth and maybe even increase your wealth during a time when the entire intention of inflation is to take it away.That's an important thing to realize.When they talk about inflation, it's not just rising prices.And I make a big deal out of this in my book about that.Misconstrues inflation.Inflation is an undue increase in the quantity of money caused by the government and that has ramifications of which rising prices are one and the most obvious thing.But probably not the worst thing.No, probably not the worst thing.There's the distortion of investment, the direction, the misallocation of assets, what von Mises called mal investment.These are the worst aspects, but they're largely unseen unless you know where to look.I'm sorry.

Yeah.Well, how would an individual citizen, how could he, how could he spot the signs, if you will, here and there, now and then about this is coming, this is happening.How do you.

Yeah, okay, so there's a little bit of a danger here of rationalization.So I've I've, I've posed out that I've laid out this theory of financial repression, which to me it's logical.Charlie Munger said, show me the incentive and I'll show you the outcome.Well, the government has every incentive to do what I'm saying they're going to do, because as I've tried to explain, it's their only choice, only real choice in paying down this debt.They have really no other choice to address the problem and still stay in office.So if you apply that framework, then you can start seeing how what they do fits into that framework.Now, I said there's a danger of rationalization because if I impose the framework and then I try to fill up the framework, am I justifying something that's not really there?Well, I don't think so.I think you can objectively see the individual things they do.Think of all the outcomes, all the reasons they might be doing, and in every case, one of the reasons they're doing it is to pay down the debt.So anyway, applying the framework, you can easily see what is happening.Let me give you an example that some people aren't talking about.Have you heard of stablecoins?

Sure.

Okay.

Yes.

So there's a special kind of stablecoin that was addressed by the Genius Act.Excuse me, the Genius act of 2025 payment.Stablecoins are tokens that you can buy from an official stablecoin issuer, like tether or Circle.And they are designed specifically in the legislation to be means of payment, means of settlement, which is the definition of money.So they're going to be a new kind of money, whereas most of the money now, all of it really is either in bank deposits or in paper bills.But stablecoins are going to be a new kind of money.And the way they work is that if you want to buy a Stable coin, you go to one of these officially designated issuers like Tether, say that's the biggest one.I send them a thousand dollars.They give me a token that says $1,000 on it.You know, it's, it's, it's on my phone.And if I want to pay you a thousand dollars and you have the same app on your phone, I just go bleep and you get it.So it's payment.It's.It's money, as it were, this transfer.So I want to buy a piano from you for $1,000.I send, you know, it's.But meanwhile, the thousand dollars I sent to the stablecoin issuer to Tether, what does he do with it, he buys a Treasury note, short term treasury note and he gets to keep the interest.Now the bank deposit that I sent him then goes to whoever owned the treasury note.So now there's still a bank deposit out there and there's also stablecoin payment, Stablecoins circulating.So now you've just doubled the quantity of money in circulation.This is a very clever new way to monetize debt because it creates a market for these issuers to buy treasury notes, a very strong demand.Now you and I aren't going to use these in commerce in the USA very much anytime soon I don't think because we already have a very, you know, convenient way to, through banks and stuff to, to exchange money.But as far as, I mean my wife just went to Turkey and went shopping over there and they only want dollars over there.But you know, if you do a big transaction, they want like a suitcase full of $50 bills.Okay, well how much, how much more convenient for this Turkish vendor if he has an app and the customer has an app.Let's do this.Now they've got Scott Bessant's talked about this.The appeal to dollar users worldwide is significant.So what these state the design of these payment stable coins is to kill several birds with one stone.The burden, number one, is to find a new market for borrowing so that the government can continue to increase its borrowing at reasonably low rates.And you just found a new market.And the second reason is to increase the demand and circulation for the dollar because it'll increase demand for dollars, especially among international payers and payees.So it's actually genius, diabolical genius.My guess is depending on how successful it is, it will extend the Runway of how much deficit we can handle.It'll extend the Runway, may buy a little time, but it won't solve the problem.But it's obviously inflationary because it creates new money is created when you do this.And this will be a new kind of.There's now three kinds of money.There's, there's currency, cash and coin in circulation and there's bank deposits.And very shortly when we get the final legislation, there are payment stablecoins.And this is actually a revolutionary thing.I, I think it's the most revolutionary thing since the, you know, Banking act of 1864.It's, it's very significant in terms of what it might do to US finance.But again, if you don't know this is happening and you don't know that the motivation for this is to continue borrowing and Put more dollars in circulation so it makes our debt cheaper.If you don't know this, you won't get the reasoning behind it.So that's, that's an example of what's going to be part of financial repression that people aren't even thinking about.

What about.

I hope I'm making sense here, Blair.

Yeah, well, this is certainly, this is.

Certainly a little bit over my head, but yeah, yeah, go ahead.

Yeah, I hope we will contribute in a positive way because I'm for this.As you created an account on Truthans FM and you the listener out there, if you value this, you could support us by sending satoshis.That is a bit of a bitcoin and we like that.But it's a bit technical, it's a bit geeky.You have to do certain things, steps in order to do that, invoicing and lightning and whatnot.But the trufance is doing it.So it's easy to use fiat or your bank and then buy satoshis.But still it's a bit, you know, not so common yet.So it could probably be that it will be backed or linked or whatever you call it to these stablecoins in the future because it's still similar to, you know, dollars, but it's digital.And maybe in the future you will have a bank account with your bank like the regular, you know, your regular bank account and a part of that could be this stable coin.But it was fascinating when you described this now over Blair's head.So in one way we will be contribute in this talking about real money.But as you said, it could be this scheme.That's why Trump has been very pushing for it in a way, maybe talking about all these stable coins and invited people in the cryptocurrency currency world and whatnot.So it was very interesting that you talked about this.So now we get a bit clearer and hopefully we'll talk about it in the future.

I should be clear that the relationship between bitcoin and payment stablecoins is only in the technology used to transfer the assets.It's not the same.We're still talking about dollars, whatever dollars.

Investment there has been like around the world.You do hear every once in a while you do hear that China wants to replace the dollar and so on and so forth.And then other like Saudi Arabia wants to would start doing business in other currencies instead of the dollar.And so I think to avoid skirmishes, if you will, maybe that's why these things, the stablecoin thing, it might become to fruition does that make any sense?Because you do hear these rumblings around about, you know, we're going to abandon the dollar and go to this current or whatever.

Well, it does.Although I hasten to add, I do not think that the dollar will be abandoned anytime soon or in my lifetime.It is going to remain an important reserve currency no matter how the new monetary order evolves.But I think it will be, and it is being slowly replaced at the margin in some cases.For example, you mentioned China.Yeah, China is very open.They don't want to have to depend on the US dollar to do business, US banking system or holding dollar denominated assets.And it's interesting what they're doing with gold.They are building out a system of gold depositories around the world.And I think their scheme could best be described with an example.So China imports lots of oil from Saudi Arabia, right?Right.And so imagine Saudi Arabia exports oil and for that they get renminbi, Chinese currency.Now they export more than they import.So they have a surplus now of renminbi.Some of it they can, you know, buy Chinese goods with directly.But if they have more than they can use, what do they do?So the Chinese have said, okay, we've just built a gold depository in Dubai.You can take your renminbi there and deposit it there for gold.We will sell you gold which you hold in that depository.Okay?And then they say, this is the smart part.Then China says, oh, and if you want to borrow money using that gold as collateral, if you want to borrow money from us, borrow renmindi from us will gladly lend you at a very modest rate.And then you can use the renminbi to employ Chinese contractors and Chinese employees and come in and they'll build you a brand new cell phone network or a brand new airport, or a brand new superhighway or I don't know, a skyscraper taller than the one in wherever that tallest one is.And that is part of their belt and road initiative.It's very smart commerce.And this is going to be appealing to a lot of countries who need development, but don't necessarily want to be under the thumb of the US dollar for fear that Uncle Sam will not like what they're doing and close them out of the banking system like we did with Russia.And by the way, I'm not saying that was wrong at all.I think it's controversial.I think there's pros and cons to it.I just think that once you do that, which we did in 2022 to Russia and basically said, oh, all those $350 billion in treasury bonds that you had, those are now worthless because we're not going to.You have to go through the US banking system to cash those in.And that is now closed off to you.And so I mean, if you're India, do you think maybe.I don't want to be subject to that.

Or.

Any of the brics countries.So it's definitely at the margin, we're definitely going to see different currencies be used in place of the dollar.On the other hand, I mean, if you're India, do you want to rely on the Chinese?No, you don't.So, you know, you're going to want to hedge your bets and diversify a little bit and try to be as independent as you can.I think that's the way it works.

And just to tail into this, and this is a totally different thing, I just recently read something that the ccp, the Chinese Communist Party is.I'll use the word imploding because.Is it Jinping?He's like cleaning house.

He did, didn't he?He recently cleaned out like several hundred high level bureaucrats.

Yeah.So, I mean, I don't know how that works, Blair.

I don't know how deep you go before they rise up and you know, and.Yeah.And take you away if you're Xi.

You know.

Yeah, that's the thing.That's the thing.Anyway, I want to just a couple more things.Over the years, my wife and I have bought the, what we talked about before we went on there.We bought these silver coin 999, you know, troy ounce silver things.And then we have the smallest domination of gold coin that we can afford.So we have, this is our way of hedging against the coming storm, if you will.And it probably isn't enough, but we still have some of these valuable assets, if you will.So as far as an individual person, that's our, that's where our thinking is.That's how we try to cope with some of this.If fallout, if you will.Does that make sense?

It does.And in fact, I want to maybe build on that a little bit.I advocate doing what you're doing, owning actual physical gold and keeping it somewhere where you know you can get to it and you don't.And you don't have to tell anybody about it like you just did.

Well, I did.

That's okay.

Nobody is listening to our podcast, but.

I do the same.I do the same thing.So I just did.No, I don't.

Same here.

I don't think you need to be so secretive.And the reason is that while I think it's a low risk that the government will try to confiscate gold like they did back in 1933, I think that's very low possibility.I've written a whole essay on that in my stack of why.There's a lot of reasons why.But they could tax it, they could restrict it, they could, you know, encumber it in some way.So, and, and besides, if it's in some, someplace other than where you know where it is, I think it's going to be so hard, the physical goal is going to be.Could be so hard to get that you might, excuse me.You might be very happy that you had some in your own safe, you know, in your basement.And I, and I would say also that the ETFs like GLD.They're okay for only to a certain extent.I mean, they, I, I do believe the gold is there behind that.But, you know, those things could be legislated away.You could wake up on Monday morning and someone said, oh, okay, you're now going to get the market price that you had Friday and they're going to redeem your etf.You don't want the market price, you want the gold.And so.Exactly.So I think what you're doing, and I also like the idea to me, just me, generic coins.I don't understand the numismatic value of coins.So the generic ones, you know, the US Liberties and the US Eagles and the Buffaloes and so forth, in reasonable denominations.Same with silver.That's probably the simplest way and the lowest cost way because you don't pay a big premium for those, you know, and they're easy to you if they're a uniform amount, you know, what you have.It's just, I would, I would keep it simple, but I would urge everybody, if you have not, have not started to begin, it's not too late, start accumulating gold on a regular basis.Just whatever you save, take 10% or whatever you want, maybe a little more, put it in gold and just keep doing that.And I think not many people will actually do this, but I think most people will wish they had someday.

Yeah.

The best time to start was 20 years ago.

The second best time was, but even then, but 20 years ago, the best time to start was 20 years before that, so.Right.

All right.Well, Jim, it's been a great pleasure.I really have enjoyed this and I would love to have you back and discuss some of your Other substack articles that I know that I've read and I thought, man makes a lot of sense.So can you give our listeners your web presence and like where do you have a website or what do you and your substack.

I don't have a dedicated website, but you know, of course substack is a dedicated website.I want to say that my substack articles and the associated YouTube channel, all the content is free.And I, I, I've been criticized for that because people say, well you're not indicating that it's valuable.Despite that a lot of people pay, I don't know, I mean and it's all, it's going to be free as long as I can write it.I don't need the money.I just want to improve understanding.And by the way, that applies to me too because every time I write something, I learn something.But you can find me at.It's just called hard money.Jim, one word on substack.You can find me on YouTube on ardmoney Jim.I'm on LinkedIn at Jim Brown CFA.I'm pretty easy to find.

Yeah.On Twitter also X.

Yes, ardmoneyjim on Twitter as well.I don't get much traction on Twitter cause I don't think I have any idea on how to use it effectively.

So yeah, we will talk about that, Jim.I will, I'm sticking to X for some time.I, I still call it Twitter, but we will talk about that.Yeah, and I agree with your thing about how you spread the good word here and we think value for value.So if, if you listen, appreciate that.You know, you could now send Jim gold coins and silver coins and streaming satoshis and sending booster grams and we have also on truthfans FM you have a button where you could say support the show and then you could decide especially spread the good word.So thanks again, Jim.Do you want as an ending reflect a bit.This book was published in 2024, right?

Yes, in November 2024.

What's the reaction?Because I bought it today and scanned through it and I liked the show notes for example or user edit the notes at the end index.And I saw, for example I will buy Carl Menger's book, you know, Origins of Money, for example.Like that that was a steal of three, four dollars and you had lots of examples.So you definitely want to come back here and we could talk more about other chapters.But as an end, how what kind of feedback in reactions, comments on, on your book?

Well, I've gotten it's It's.I hesitate to say it because it doesn't even sound real.It's.It's not exactly a runaway.It's not a runaway bestseller.It's not like people were sitting around saying, gee, I wonder if someone's going to write a book on money creation and its consequences.Gee, I hope they do.Maybe I.Maybe no.People aren't even thinking about this.However, on Amazon, I have 38 reviews and all 38 are 5 star and all but 2 are verified purchases.And in addition, I've gotten some reviews that have been published.For example, if you read the objective standard, there's a review there that's.It's really embarrassing.It's so nice.I was so thankful for that review.

You shouldn't be embarrassed, Jim.You shouldn't be.Great work, but I understand what I'm saying.

I'm just telling you the facts.It hasn't sold thousands of copies, but the feedback from those who read it is extremely positive.And I said this, I think, before we started recording.Two things I would promise a reader.There's no other book like this that takes you from how money is created to what the consequences of bad money creation actually are.I don't know, one that goes from soup to nuts like that.And the other thing is that you do not need a degree in finance to read and understand.And I spent so much time eliminating jargon because I've got 40 years in this business.I spent so much time eliminating jargon so that it could be understood.That doesn't mean it's all easy, but you can get it.And I really do believe that.If you do and see the inevitability of what.I can't come to any other conclusion.What will our government do to address its debt problem?They have virtually, as far as I can see, no choice except to do what they've.To do what other governments have done through financial repression.And I think Donald Trump just said it out loud.Which was what gave rise to this podcast.

Yes, yes, yes.Our guest today, ladies and gentlemen, has been author Jim Brown.His book, A Black Hole in Economics.Go purchase that if you really want to understand and protect yourself.Jim, thanks for manning the foxhole with us today.

Hey, I love the title, the Foxhole.

Yeah, Secular Foxhole.Secular Foxhole.

Thanks, Tim, and talk to you soon again.

Likewise.It was a pleasure and I'd be happy to come on anytime.

Great.

Oh, wonderful.All right, thank you so much,.

Sam.

Sa.