Jeff Berwick: Systematic Market Crash to Occur on September 13th, 2015Tuesday June 02, 2015 16:54
Could a market crash occur this year, on September 13th? We are delighted to bring on a new guest to this week, Mr. Jeff Berwick. Jeff founded Stockhouse.com, which grew to a $200 million plus market cap company, before the tech bubble burst in the early 2000’s.
Jeff now resides in Acapulco, Mexico, from where he writes his financial newsletters, holds conferences and lives his laid-back, free from worry type lifestyle.
Knowing that Jeff has a large following of international investors, it was great to hear his thoughts on portfolio choices and life in general, from his home in sunny Acapulco…
Palisade Radio Host, Collin Kettell: Hello everyone and welcome back to another episode of Palisade Radio. I am your host Collin Kettell. On the line with us today is a new guest to our program, Jeff Berwick. Jeff, welcome to the show.
CK: I do not believe I have ever seen an interview with you, Jeff, without you smoking at least one cigarette, usually a glass of wine in hand. I would not want it to be any different today, so we are going ahead with a video recording. I want to touch on your background to give listeners a sense of how you have developed your philosophies today.
You run a blog called The Dollar Vigilante. You have a very popular radio broadcast called Anarchast, and you are a self-described anarchist, of course. As far as I know you founded and sold Stockhouse.com. You ventured on a sailboat, got caught in a storm, nearly escaped death, and washed ashore with boxers on. What has transpired between then and now?
JB: I sank my boat in El Salvador in 2005, so it has been about a decade since then. The reason I actually went on that – I tried to sail around the world –was because as you mentioned I had just sold Stockhouse in 2002 at a very low price compared to the price it was worth in 2000. In 2000 it was worth $240million, and then two years later it was worth almost nothing. I decided I needed to figure out what was going on in the world. Then I decided to get a sailboat to try to sail around the world. Exactly one year later to the day, I sank in a storm in El Salvador.
But I kept going to about 80 or 90 different countries after that. I spent about five years just travelling and learning, and reading. One of the main things was trying to figure out what happened during the tech bubble collapse. I would ask a lot of people, a lot of brokers or MBAs, or economists and I would say, “What happened? Why did all these tech stocks go up so high and then they came down so fast?” Most of the answers were just, “Oh, that just happen sometimes.” I was like, “There is got to be more to it than that,” so I looked into it.
That is what led me down the road to reading The Creature from Jekyll Island from G. Edward Griffin, which really tells you how the Federal Reserve was founded and how the Central Bank here was founded and how it works. It is seen as a very anti-freedom, anti-humanity contraptions – central banking. I just kept reading all that and then I read more and more, and spent literally a decade just reading and travelling, and learning.
Then I decided around 2000— after the 2008 near complete collapse –financial collapse – I realized, because I was expecting that to happen, I realized I understood how things were working. I decided in 2009 to start writing The Dollar Vigilante just to tell people about a lot of the things I have learned over the last decade or so including Austrian Economics and all sorts of other things, and a lot of very financial-related things.
Of course it is called The Dollar Vigilante so I am expecting a dollar collapse at some point, and I think it is going to be soon. I do not want to make any guesses anymore; it could be very soon. Actually, I am predicting some sort of major catastrophe happening in September, but I am still trying to figure out what it is going to be. I just know there is going to be one. Yeah, that is what I have been doing and that is what I continue to do to this day.
CK: Let us get back to the potential crash in September a little later in the interview. I want to talk a little bit more about your philosophy. I have been reading several books on history in the last few months, and I am fascinated by humanity’s inability to get along with one another and their obsession with controlling one another.
In fact, I just completed an incredible book by Roger Crowley called The Empires of the Sea, which covered the conquest of Constantinople by Islam and the ensuing Crusades between Christianity and the Muslim world. What is very clear to me is that despite government’s ever-growing grip on institutions today, we live in the freest period of human existence. Do you agree with that assessment, Jeff?
JB: That is really a tough call on what you call freedom and what happened in the past, and if there was more freedom in the past. In so many ways I think in the past it was freer, in my opinion, especially if you look at the US. Let us just look at the US as an example.
In the 1800s, in the US, you really had no tax, no income tax. You did not need a document to travel around the world called the passport. You did not need anything to drive a horse. There were no real rules, regulations or anything. There were maybe a few small ones in certain states, but it was quite free. That is, I think, why the 1800s went really well in the US.
But I understand as well your point that we do have opportunity to live quite free still today. In many ways, the world has improved over the last few hundred years; there is no doubt about that. The fact that you are in Guatemala and I am in Mexico, and we are both making money on the internet, and talking right now face to face in live chat, there had been so many great improvements to our lives brought forward in the last few hundred years.
But as far as being more free today, it is really hard to actually try to live outside of your own tax farm, your own country, which I think you are doing and I have already done. I have been doing it for ten years now. That is something called the permanent traveler, perpetual tourist, or prior taxpayer, PT theory. That is something I talked a lot about at The Dollar Vigilante. It is one way that you can live a lot freer without being exposed to too much government tax and regulation, and all sorts of other ways that they really mess with you.
CK: Yeah, you bring up a good point there, I guess, that the United States in the 19th century was arguably a more free society, and many of the benefits that we have today are due to technology rather than less government intervention. It is certainly not the case. Do you ever consider all of the technologies that we have today? You just described Skype, we can make money on the internet. Do you think that those things are outpacing the ability of government to control them? Does that give you optimism or are you pessimistic for the future because government is going to continue to try to steal from us?
JB: Yeah, government is always mankind’s biggest enemy throughout human history. It always has been. It is what destroyed Rome. Everything that is every empire’s collapse and every war and all the billions of people that have been killed, it is all due to government. That is always our enemy. I am trying to, hopefully, create a world where people understand that government is an unnecessary evil and a necessary evil, but we will just take that a step at a time. But, that is the real question. Almost always the question is: Can free markets outpace the government’s attempt to restrain it and to extort it, and steal from it? In many ways, you could see that they are, but in some ways they are not.
I have a friend who once said that to him it is sort of races. Like two horses, they both have blinders on, both are running at full speed and there is a gate ahead, and only one of them can fit through it. He compared that to a private market versus the government in terms of taking advantage of technologies either to free us, which is what the private market would do, or to enslave us, which is what the government always does. I am quite optimistic though. When I would start talking about the NSA years ago a lot of people said I was crazy. Now a lot of people are very aware that they are being watched, read, listened to everywhere they go by the US Federal government.
There are so many reasons you can get very negative on this. Definitely, we have never been more surveilled, we have never been more watched. Even in East Germany they wished they had the technology that the US government has today. There are cameras everywhere that are connected to databases and the NSA reading and looking through everything. In some ways it is quite bad. But at the same time the free market is always more creative, and always way faster and more efficient than government because it is not a big bureaucracy.
We are seeing things like bitcoin, which is a new technology, a new currency, just came out of nowhere in 2009, and is really changing the entire monetary world especially how people are thinking about it and what is going to be happening in the future. There is so much going on. I am hopeful. In the end I think good always wins against evil. But it is always a battle. I think we just have to get through it in battle, that mankind’s two biggest enemies: Government and Central Bank.
CK: On the point of anarchy, we are both friends with Doug Casey. I had a conversation in Argentina with him last year asking him if there was no government, would not a government essentially just create itself because people get together in their community, they talk amongst each other, and they will elect a person over here to make decisions on one thing, and at some point the community grows and it turns into a government?
I do not want to quote Doug because I do not remember his exact response, but he said, “Yeah, that in my opinion is the fault of mankind.” That people always want to control other people. Have you thought about how anarchy would actually work? Is it an ideal in your head or do you think it actually is something viable in the future?
JB: Well, it is absolutely viable. But it is going to take somewhat of an understanding by at least a significant amount of the public to make it a less volatile transitory period. I think what is going to happen is we are going to see is a collapse of most of these state systems. They are all bankrupt. All the western governments are beyond bankrupt. Their economies are going to be destroyed by what their government and central banks are doing. We are going to see a collapse either way.
The more we educate people that, “Hey, you do not need government. You have been brainwashed a little bit.” That is what government means. Govern = to control, ment = mind. It is mind control. Wake people up to that and just say, “Why do you think you need these thieving, extorting group of people to steal your money and then give some of it back to you, and then put you in cages if you do not?” Makes no sense whatsoever.
The way that this is going to transition to hopefully a more free world and a much more anarchic world is through education and through spreading these ideas. These ideas are really spreading now, so I think there is great potential. It is going to be a process for sure. It is not going to be easy. It is going to be dangerous at times. It is going to be crazy. But it is going to happen like I said either way as the dollar collapses and as the US Federal government essentially goes bankrupt or hyper inflates the dollar to zero. It is one or the other, and both of them just for the system.
As far as your initial point though about Doug Casey and you bringing up that, “Hey, if we just hit a button there is no government. Tomorrow people would just start up another one.” That actually is one of the things that many people say about why they are not for anarchy. I ask them, “Why are you not for anarchy?” And they say, “Well, you know, I just think if we had anarchy that, eventually, there would be people who would take over in all sorts of geographic regions with guns, and they would essentially enslave those people.”
I say to them, “Yes, that is exactly what government does.” Yes, it is possible. It could happen. But that is the worst-case scenario. That is what I tell people when I say, “Just consider the fact that we do not need government. Just put it in your brain. Do not accept it. Just consider it.” I say to them, “You know if we do not need...” What is it I am going to say? I lost my train of thought on government. Lost my train of thought, sorry about that. I had something to say.
CK: No worries. Good answer either way. I want to get back to the current events that are happening. Even talking a lot about dollar hyperinflation I think that our audience at Palisade Radio a lot of them see some type of an inflation occurring. The stock market, the bond market, they all are historically overpriced right now. What do you see playing out? You said something about a potential crash on September. Why?
JB: I am just about to release more information on why I am zeroing in on that date. I have already written about it to The Dollar Vigilante subscribers last month. There are a lot of things happening in September that all seem to be gravitating to one date. The date happens to be September 13th and around September 15th. There are a number of reasons. I started looking at that date. I do not want to get too in depth here, too detailed or complicated, but there is something in the Judaic religion called the Shemittah. Every seven years there is a washing away of debts.
Due to some research I noticed that almost every major market collapse happens during this year and usually on this one day when the Shemittah year is finalized. It is the final year of the Shemittah. I looked into it and this year it happens to be September 13, 2015. The last Shemittah was in 2008. That was the day that had the biggest point drop in the stock market of all time. Seven years before that was 2001, just after September 11th. On the final day of the Shemittah, September 17th, the New York Stock Exchange reopened after September 11th and fell, I think, the most in history at that point.
I have been just looking at these dates and then I start to put together that there is this massive military exercise going on in the US right now called Jade Helm. It runs essentially from July until September 15th. On September 15th there is also a meeting at the United Nations for their 70th Jubilee session, and most major world leaders are going to be there in New York. There are so many things. The pope also is going to be speaking at, I believe, the UN or Congress on that day or around that day.
There is something happening and I am still trying to put together all the details and all the numbers, and all the facts. I think something is going to happen. I do not know what it is going to be exactly, whether it is a complete financial currency reset. If you are looking at what the US government is planning for, looks like they are planning for a huge amount of chaos in society. They are planning for it. They are war gaming for a financial economic collapse. They are doing drills for it. There is something that seems to be in the works.
Now if I am wrong— and this is the great thing about this is if I am wrong and absolutely nothing crazy happens in September, I am still right on all the things that you should be doing right now. Because I think the collapse will come quite soon, very soon, as soon as maybe even September, if not in the next year to no more than couple of years at this point. I do not think so. All the things to do, that is, if you expect a September collapse to happen. Even if it does not happen you are still going to be positioned well, being in things like hard assets outside of the financial system as much as possible.
CK: Yeah, it is always good to protect yourself and build a defensive fortress and part of that is of course holding on to gold and silver. What happens in this type of situation to the price of gold? Are we going to see $10,000 per ounce or a $100,000 per ounce? I guess if there is a hyperinflation the number is irrelevant.
JB: Yeah, that is right. That is what happens in every hyperinflation. It is really hard to say because we have never had this happen before in human history. We have never had an entire world on fiat currency. We have never had a great majority of those countries be insolvent or bankrupt essentially. There is absolutely no way that most of these western countries can even hope to ever pay off the debt they have accumulated. It is obvious that is just a Ponzi scheme. They just keep rolling it over and making it bigger and bigger.
How does it all collapse? I have no idea exactly. There are just so many variables. I think if I had to guess right now I would say that we will likely see something happen in September. It will cause a massive market crash. We will then possibly see a massive amount of money printing by the Federal Reserve and the European Central Bank and the Bank of Japan and the Bank of England, which could very, very quickly turn into some sort of hyper-inflation. Who knows though? There are going to be so many variables.
The one thing I do know is that you definitely should be quite safe right now. Do not be listening to CNBC when they tell you, “Oh, be getting in the stock market; it is just going up.” It is going up for a reason and that is because they are printing a lot of money. Once that money printing slows somewhat there would just be another collapse just like in 2001 or 2008.
I really recommend people just get into hard assets because of that. Be prepared. Be more cautious than anything. Do not be looking for massive gains right now. Of course, you can. For example, I own some junior mining stocks. If gold does, or silver as well, does skyrocket these stocks will go from $0.02 to $200, so I have a small percentage of my assets in those sorts of stocks. But I am mostly in precious metals hard assets, bitcoin, all kinds of ways to get into something that Janet Yellen cannot counterfeit into worthlessness.
CK: Jeff, I want to end asking you about your, I guess, goals and aspirations in life, and the reason behind you starting The Dollar Vigilante and Anarchast. When you look back in 20 years what is it that you would like to have accomplished today?
JB: Oh, that is a good question. I do not really think about the future in looking back at myself and thinking about what I did two months, so I do not think I have ever done that. I would mostly look at what am I going to do tomorrow? What am I doing right now? And that is basically it. I do not know. I am definitely passionate about freedom. I see through all my experiences in life and through a lot of research that freedom appears to be the best possible scenario for human beings to thrive and prosper.
Of course, government is anti-freedom and there is an incredible amount of government in the world today, so that is a very negative thing in my opinion. I do not really think too much about it, but I am definitely passionate about freedom. I am passionate about the philosophies of libertarianism, anarchism. I am also quite passionate about the markets and Austrian Economics, which, to me, is free market economics.
The main reason I did The Dollar Vigilante is to help people to understand what is going on because they are not getting the news – the real truth – on what is going on in the mainstream media. They are being fed a bag of lies. A lot of people are going to get really hurt from this. I am just trying to spread this information as much as possible, and that is really all I do almost every single day.
CK: All right, on that note, Jeff, thank you so much. Jeff Berwick everybody, http://www.thedollarvigilante.com, and how do we get subscribed to the Anarchast?
JB: Yeah, if you want to go to Anarchast, Anarchast is the number one anarcho-capitalist podcast interview show on earth. We have interviewed over 200 anarcho-capitalists today. It is always really an interesting discussion. If you want to check that out just go to YouTube and type in Anarchast, that is A-N-A-R-C-H-A-S-T. I am sure you will find it.
CK: All right, thank you, Jeff.
JB: Thank you, Collin.