'Make Hay While the Sun Is Shining'... Because Serious Storm Clouds Are Building
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Editor's note: For years, Dr. Ron Paul offered an alternative to the typical positions taken by both the Democratic and Republican parties...
The former U.S. presidential candidate and 12-term Congressman became one of the few voices advocating for limited government, individual liberty, and sound fiscal principles. You won't hear many other politicians take those positions.
Frankly, we would all be better off if his warnings were heeded... For example, several years before the 2008 financial crisis, he warned the House Financial Services Committee that mortgage subsidies were dangerously distorting the U.S. housing market.
And as regular Digest readers know, Stansberry Research founder Porter Stansberry joined Dr. Paul in these warnings... In the June 2008 issue of our flagship Stansberry's Investment Advisory newsletter, Porter outlined the massive dangers in the housing market – accurately predicting the mortgage meltdown that soon unfolded.
In the years since then, both Dr. Paul and Porter have detailed an even bigger crisis currently building – the 'End of America' as we know it... This coming crisis, with a catalyst of an imploding national debt and the end of the U.S. dollar's reserve currency, will dwarf the Great Recession.
Recently, Dr. Paul and Porter sat down for a frank and unscripted discussion about the state of the nation for our friends at American Consequences magazine. And in this weekend's Masters Series, we're bringing their entire interview to you in two parts.
In the first part today, Dr. Paul and Porter talk about the federal government's disastrous monetary policy – and what that means for your finances. We hope you're prepared...
'Make Hay While the Sun Is Shining'... Because Serious Storm Clouds Are Building
An interview between Porter Stansberry and Dr. Ron Paul
Ron Paul: I'm sure you recall... back in 2015, you had a conference up in Tennessee and that's when we got to know each other. The questions I probably had for you then and I have now – and I think readers would be interested – involve a little bit about your background.
You have a big operation [at Stansberry Research]. You're well-known, and you have so many subscribers. But how did you get started? Did you know what was going on in the world when you were 15 years old, or did you become knowledgeable later on? And how did you finally get around to doing this advisory letter?
Porter Stansberry: Well, I think like a lot of libertarians, I was a bookworm. So I found the ideas of Henry Hazlitt, and I went on to read things like Eat the Rich by our mutual friend P.J. O'Rourke.
Then I stumbled onto Agora [Financial]'s letters. Bill Bonner is a big publisher, and he introduced me to Doug Casey, and I got a job working for them out of college. And from there, one thing led to another.
In college, I went to the University of Florida. And I learned all the things that the mainstream teaches you about political science and about how the republic is supposed to work and how democracy is supposed to work – as opposed to how it really does work. I was just very impressed when I met Doug and Bill, and I started traveling around the world with them.
I was also very impressed with how the Austrian economics described the world as it was, and how much better that was as a forecasting tool, because it really revolves around human incentives, human actions, and human decisions. And I don't see any of our mainstream political leaders or thinkers talking about the realities of how the public makes decisions and how they respond to incentives. But of course, that's what the Austrians focus on.
Ron Paul: So you officially started your letter and your advisory service in 1999. Were you doing exactly the same thing immediately, or did you start out with a small, little newsletter that just grew? Or was it always the same thing of advising people and giving them information to help them make their investment decisions?
Porter Stansberry: Yeah, definitely. I have had a passion my entire career for helping individuals level the playing field with the folks on Wall Street.
I started in 1996 working as an associate at Agora for Bill Bonner. And then in 1999, I left and started my own publication because I was quite a bit younger than they were, and I could see, in ways I don't think they understood yet, how the Internet was going to change the economy and change our way of life.
So my first independent publication was all about the Internet and how it was going to change things. You might have remembered seeing the advertisement that I launched my business with. The headline was, 'There's a new railroad across America and it's making some people very rich.'
It was all about how companies like Amazon (AMZN) and Qualcomm (QCOM) and the growth of bandwidth and Moore's Law was going to really change the way that we do things... everything from, for example, digital photography to retail. Having some insight into that – because I had a background in computer programming as well – really gave me a big advantage in the markets for a number of years.
But the real advantage that I think we have at Stansberry Research is we are very well-grounded in Austrian economics. So I think we have a much better idea of what the numbers mean than what the mainstream media and other financial advisors would say.
Ron Paul: Right, and you've had some successes. I know you were on top of it when the housing bubble was building – warning people and getting prepared for that. But you also have to keep up with all current events, and I can't think of more challenging times than what we're going through right now.
You know about the business cycle. You know about the Fed and the distortions there, and you can anticipate financial bubbles. But then right now, we have thrown in the mix here – the coronavirus, the overreaction on the coronavirus, too much concentration on the Federal Reserve, and the financial bubble. And the lockdown and what's happening in the streets are very important, but no one is not talking about the real source of how the financial bubbles develop.
So how do you handle that? Do you talk about the lockdown and the damage and tell people some of the things that they have to do and how to invest because of that? And of course, the Black Lives Matter movement is significant – we can't ignore that. But I think that unless they're reading your advisories and a few others, not too many people concentrate on basic monetary policy.
Porter Stansberry: Yeah, we're definitely on the same page there. But if I may, let me just bifurcate a little bit. I have a larger research company, Stansberry Research... and there are a lot of good analysts and writers there. And they have different areas of specialty.
For example, I think the two things that my business does the best is biotech research and, ironically enough, property and casualty insurance research. They're not really related, but we have staffs with decades of experience in those fields, so we produce very insightful industry work in those categories.
I'm probably the one person at my company who cares the most about these ideas – about the overall impact of monetary policy – and I've probably written more about it than any other writer. So I just want to be careful that I'm speaking for myself here and not necessarily for all the writers or all the thinkers at Stansberry Research. They all are entitled to their own opinions.
But Dr. Paul, I will tell you that I wrote something as far back as 2010 where I saw how the Fed was responding to the mortgage crisis. What I know about history and what I know about monetary policy and theory is that once democracies begin to print money to pay for the government's bills, they never stop... And that has a corrosive effect on society.
The thing that I wrote was called, 'The End of America.'
Of course, a lot of people in the mainstream media snickered when I said that this would lead to violence in the streets... It would lead to a breakdown of societal norms... It would lead to more and more and more printing and a total devaluation of the dollar and the loss of our world reserve currency status. And everyone made fun of me.
But virtually everything I wrote over a decade ago has come to pass.
And what I see is that both the response to COVID-19 and the rise of the Black Lives Matter movement are nothing more than what happens in every historical situation where you have a government that begins to behave like ours with its monetary policy. It leads to a tremendous centralization of power, and it leads to a degradation of civil society... And in both cases, that's what you have here.
You have a government that's well overstepped its constitutional authority to tell people to remain in their homes. And of course, you have the societal breakdown where people genuinely believe that they can't get ahead in American society because of the color of their skin. You're not allowed to say this anymore, but I find those ideas absurd and feel genuinely bad for people.
When you tell a whole segment of your society that their own initiative and efforts aren't going to count, you're lying to them. But more importantly, you're giving whole swaths of them this limitless excuse to not try their best and to not participate in society in a normal way. And that's why you see the rioting and all the other things that have happened.
So even though the micro-causes of all these things may be due to specifics, the reality is that this entire genre that we're living through is completely a normal part of what we have done with the monetary base.
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Ron Paul: With all the news and the markets being so rocky, when you think about the political situation, the economic situation, the runaway deficits and all, where do you come down emotionally, in a sense, that you end up with a bit of optimism because we can correct these things?
Or do part of your investors or your writers talk about why you have to move out and go overseas? I mean, there are all types of reactions to this. But I always work hard at it, and some days it's more difficult. I'd like to think that if we did the right things, we should be optimistic. But where do you come down on this side of optimism and pessimism?
Porter Stansberry: Well, given that my two mentors in business were Doug Casey and Bill Bonner, I have to say that compared to them, I'm a wild-eyed optimist. Though, I'd like to believe that I'm a steely-eyed realist.
What I will tell you, Dr. Paul, is once you understand what is behind the collapse in civil society... once you understand what's behind the soaring valuations in the stock market... the soaring price of gold... and so on... it actually becomes pretty easy to make a lot of money. And if you look at the track record of our advisories, we've done incredibly well over this 10-year period because we had a very good sense of what was going to happen in the markets.
Our primary financial strategist is Dr. Steve Sjuggerud, and he has been calling uniformly for market upside. Originally, he called it the 'Bernanke Asset Bubble,' and then he predicted what he's calling the 'Melt Up.' But what he's saying is that the primary recipient of all of this excess liquidity would end up being the stock market. And if you have followed that advice and you followed our recommendations over the last decade, you have made a tremendous amount of money.
Now, of course, we both know that that money is going to buy you less and less... And as that destruction in value accelerates, at some point, the markets will, of course, turn. There will eventually be a panicked sell-off. But if I knew when that would happen, then it would be a lot easier to do our job.
So while we're telling people to enjoy the fruits of this inflation, we're also, of course, warning people that you're going to be a whole lot better off if you put some of your savings in gold. If you have some real estate offshore, I think that's a sensible precaution. We've also recommended things like farmland and timber that have historically provided wealthy people and wealthy families with refuge in times of domestic crisis.
So I think what you have to do is do the best you can to make hay while the sun is shining. But be aware that the storm clouds that are building right now are the most serious our country has ever seen.
Editor's note: Keep an eye out for the second part of the interview between Porter and Dr. Paul in your inbox tomorrow morning. They'll talk about the presidential election – and explain what we can expect to happen in the days, weeks, and months ahead.
In short, they believe Americans need to start preparing now, no matter who wins. That's also why Dr. Paul recently sat down with our Director of Research Austin Root...
In an urgent warning for anyone who will listen, Dr. Paul discusses what the 2020 election is really about... explains who he thinks will win (it'll probably surprise you)... and details what he believes you should be doing right now to prepare. You owe it to yourself to get the facts on how to best prepare for the election aftermath today. Click here to learn the full story.
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