How Coronavirus Exposed the "Shaky Foundation" (w/ Michael Krieger)
DREW BESSETTE: We have Michael Krieger of The Liberty Blitzkrieg with us today. Welcome, Michael. Thank you thank you for joining us. MICHAEL KRIEGER: Hey, Drew. It's very exciting to be on with you. I'm very-- very much looking forward to our conversation. DREW BESSETTE: So my first question that I like to ask all of our guests-- it's a little funny, but who are you, and what is The Liberty Blitzkrieg? MICHAEL KRIEGER: Sure. So obviously, my name is Michael Krieger. My background is my career started at the now defunct Lehman Brothers back in 2000. I joined there right at the top of one of our last bubbles, that tech bubble. And I entered into the program as an oil analyst. So I worked for the guy who covered the major oils and refining companies-- so names like Exxon-Mobil, Chevron, Texaco, Tesoro, Valero, names like that. So I was basically in a cube for five years going through 10k's and spreadsheets. And it wasn't exactly my idea of fun. But I learned a lot. The analyst that I worked under was extremely smart and talented in what he does. So after that in 2005-ish, I joined Sanford Bernstein as a commodities desk analyst. So this is where I really-- I like to describe this as the job that fit my personality perfectly. I sat on the trading floor. I was looking at all commodities as well as the energy equities utility equities, all that stuff, plus just markets in general. So there, I was able to learn trading and sort of how markets work and really expand out into more macro everything. And it was at that desk when the financial crisis hit. And at that point, I started asking questions, as I think a lot of people started asking questions. And I started to discover the system wasn't actually set up the way that I had assumed it was set up. Prior to that point, I thought that-- I was making all this money. I was having such a good career because I was great. You know, I was so smart and all that. But then I really realized with the crisis, when they started bailing out people like me, Wall Street, people that didn't need bailouts, I realized how gross and rigged the system was. And I really had a problem and a difficulty sitting in that chair. So I started writing about these things from my seat at Bernstein. And then eventually, know I really couldn't be there anymore. It didn't make sense. I wasn't feeling good about the job. And I left in early 2010. And I really had no idea what I was going to do. I continued to write because my job at Bernstein was to write about macro issues. And I had a very large client list from the biggest institutional investors in the world-- hedge funds, mutual funds, everybody globally. So I kept that going. And then know one day, one of my articles got picked up on "Zero Hedge." DREW BESSETTE: RIP. MICHAEL KRIEGER: RIP from Twitter, the absolute top. Incredible-- pretty much the absolute top. But So they picked it up. And then I got a bigger audience. And then I was interviewed by Max Keiser and Stacy Herbert of "The Kaiser Report" if you're familiar with that show. And they're brilliant. And so I realized, you know, at this point, you know, OK. Well, there's an audience for this sort of thing. I think I have stuff to share. And so about a year, year and a half after that, in 2012, I decided to just put it in my own blog because prior to that. I was just emailing it out to people, emailing my thoughts out. And I did that then. Same year as that, I discovered Bitcoin and started getting involved in Bitcoin. And that changed my life in a whole other different way. But basically, for the last-- essentially, for the last 10 years now, I've been writing about and trying to teach based on my experience and my knowledge and my macro sort of intuition and abilities, you know, what's really going on? You know, how do things work at the biggest picture level? What does that mean? And the interesting thing about today is so many of the themes that I've been writing about for 10 years are all really coming to a head because of this pin, right, this pin that found its way into the balloon of this giant everything bubble. And so it's a pretty a pretty incredible time to be talking about all this stuff because it's sort of like the culmination of my last 10 years work coming to a head right now. DREW BESSETTE: Yeah, I mean, when I reached out to you a few weeks ago, I didn't think that we would be sitting here today amidst an actual meltdown and this week, you know, two trading halts. And it's unbelievable. But originally, they were going to talk about your piece, "Financial Feudalism." And you kicked it off with a Frederic Bastiat quote-- excuse me. "When plunder becomes a way of life for a group of men in society, over the course of time, they create for themselves a legal system that authorizes it and a moral code that glorifies it." And I think that warms up our conversation today with everything moving so fast. We're actually going to talk about your latest piece, which is called "A Shaky Foundation." and so what we've seen is coronavirus viruses exposing a lot of the weaknesses, I would say, in our financial, political, and public health systems. But before we get into that, I want to ask why did you call it "A Shaky Foundation?" Can you explain that and maybe introduce the Jimi Hendrix quote that you use to kick it off? MICHAEL KRIEGER: Right. So yeah, castles made of sand fall into the sea eventually. I mean, that pretty much describes how I see our civilization at this point, you know? And I do think-- and I've been saying this for a while. I think we need to rebuild the entire civilization, in a lot of ways. But we can do that. It's necessary to do that, and we should do that. And so I think you know there is an optimistic way to see all of this. But the bigger point is, look-- a lot of the shaky foundation that we're living in started way before I was even born. In the early '70s, as you know, 1971, getting off the gold standard, that really kicked off financialization in earnest, right? So what I like to talk about is after World War II, obviously the United States became a global empire. But that empire was based on not a shaky foundation. It was based on having the world's manufacturing base after everyone was bombed out, playing a part in winning the war, and being relatively unscathed and then all of the things that the United States already has, like,is blessed with naturally. And so that lasted for a few decades-- let's say, 2 and 1/2 decades. The US was, let's say, an industrial empire-- a military empire but also an industrial empire. It was based on making things. It was based on a real, actual economy, and actual economic strength. Starting in 1971, we just started taking the easy way out to empire. And I call it-- this is the beginning of the financial empire. And that's what we live in now. We're not an industrial empire anymore. Clearly, right? Like, coronavirus is exposing that. For example, we ship 95% of our mask-making capacity out of the United States. Can't even make masks that we need. We're reliant on other countries to provide masks for us. That would never have been the case right after World War II. We're just a different country. So what is a financial empire? Financial empire is one that really basically controls the world or has control of the world via the financial system itself, via the fiat US dollar and control of that financial system, which is based on the US dollar. And this made us very, very lazy and very, very weak because if all you have to do is run the financial system with this imaginary currency that you can create and use as a weapon at will, you get to the point where you don't need to actually do anything, right? A lot of people talk about the military bases and all this. But all of that can go away very quickly if the dollar is not there. The dollar is what actually underpins. People like to say, oh, well, the dollar is backed up by the military. I actually disagree with that. I think the military is backed up by the dollar and the financial system. If the dollar didn't have the position that it had or it has or-- we'll see how long it lasts. But if it didn't have that, then the military wouldn't be able to function everywhere in the way that it does, right? We're basically on an unlimited budget. So that's what we created. And what that's done is it hollowed out the country because we all got lazy, essentially. And elites just started saying, well, we don't need manufacturing. We just have the dollar. We have the financial system. We have finance-- you know, financialization. So they shipped jobs overseas, increasingly making money just on scams, using a lot of leverage and buying assets and buying back shares. I mean, you discussed on "Real Vision" this sort of thing. It's a huge laundry list. But the point is, a financial empire that's based on something so shaky as a fiat currency that dominates is one that at some point will obviously collapse. But it's interesting that it's taken so long. And what that means is that there's so much more rot underneath than people can even imagine. And so if people want to look back, I've been writing, you know, like I said, on my website since 2012. I've been writing about all of the different points of weakness for all that time. And it's basically every industry. I mean, we've hollowed out and put the most corrupt people in charge of virtually everything in the society. DREW BESSETTE: Yeah, so I mean, you talk about corruption and hollowing out and kind of covering up that rot that you describe, right? What was the effect of 2008 in that? Because that was a huge crisis. And it seems very similar to what's happening right now in financial markets. What was the result of that? Why is it allowed to get to this point? MICHAEL KRIEGER: Yeah, you know, it was very frustrating for me as I described earlier. I tell this story sometimes. I remember when TARP-- when TARP didn't pass the first time, right? And then they made Congress vote again so they could pass it. I couldn't sleep, and I got into the office very early that morning. And there was like five people. But the head at the head of trading was there. And I stood up, and I was just ranting. I was like, this is it. You know, we're never coming back from this as the same country again. It'll never, ever be the same. And my boss was like, Mike, sit down, take a walk around the block or take a walk around the block. So I just sat down. But I'll never forget that moment because it was very clear to me that there was just opportunity. There was an opportunity to really say, OK, there are systemic problems here. We shouldn't just try-- we should take this as a lesson, and we shouldn't just try to patch it all back together and pretend nothing's wrong. There's clearly things that are very wrong. And so the response was-- and you see it in the data since to help people that needed help the least to-- you know, all the people involved heading up these financial companies, you know, whether they went bust like Lehman or not, they all came out of it extraordinarily wealthy, not in jail. That was the lesson, OK? That was one of the big lessons. So any sort of criminal-- right? Any sort of criminal worth their weight is going to look at that and say-- corporate criminal, white collar criminal is going to say, oh, it's open season now. Nothing's going to ever happen to us. So let's just go for it. And you know, Epstein is another example of it. Now Weinstein's finally in jail. But the point is, elite criminals-- basically, I call them super predators because they're the most dangerous-- basically took that as a signal that, OK, well, there's nothing that we can do that will put us in jail. There's nothing that we can do. So the last 10 years just became this gigantic looting spree. And I was very frustrated at the time by the reaction from a lot of people. I know a lot of people were upset. But what I now realize is we were facing a generational crisis at the time that we just weren't prepared to sort of have a reaction to because you know if you're a younger millennial or you're like a middle millennial, you were too young then to realize. So in other words, the generation, that millennial generation that was about to get shafted and turned into debt slaves forever, essentially, it looks like, they were too young to understand and appreciate what was happening to them. Some of them were still in high school. Others were maybe starting into the workforce. But they didn't understand the extent to which that they were getting scammed. And now they do. So it's going to be interesting to see the response of that generation that has been so shafted going forward. But that was that was, I think, a big part of the problem. The people that were going to be hurt the most generationally were just too young to know what was going on. DREW BESSETTE: Yeah, so I kind of want to move a little bit forward and then bring this into the coronavirus context, right? So on January I think it was 27, you tweeted out, one thing I've learned from this coronavirus response thus far is institutions will never do the right thing fast enough in a situation like this to prevent a global disaster when that day arrives. And I don't know. I think we're there. That was a month or so ago. And why have public institutions been so late and inadequate with their response to this? MICHAEL KRIEGER: Yeah, because-- again, because what we've done in the last 10 years in particular is created this environment that is so-- it's like the opposite of anti-fragile. It's super fragile. It's been coddled so much-- like, any downtick in the markets, you have to save the markets. Any problems, immediate Band-Aid has to be put on rather than reckoning. So world leaders have created this-- it's like this delicate flower that the slightest thing can knock it over. But anything big is going to completely pummel it. And something like a global pandemic is like the black swan of all black swans for something like this because nobody actually considered it. So I think what was going on from a leadership point of view is this complete inability to reckon with something this big because they knew that they couldn't handle something this big. I think they know that the system can't handle something this big. So instead of actually thinking that it could be this big, they just decided to put their heads in the sand because it was too scary to contemplate. And you saw that right off the beginning. I mean, you didn't have to be a genius to look at China building hospitals in four days to know there's a problem. At that point, we didn't know how far it would spread or anything, but you knew there was a major problem in China. And you had to assume that since flight we're still leaving China that it was going to spread. So what I saw-- you know, what really tipped me off other than the fact that China was building hospitals overnight was the fact that these global leaders were just downplaying it so much. And it's sort of like one of those little signals because you know they tend to hype things up, right, fear, when it's to their advantage. So like, after 9/11, I mean, the fear mongering just went off the charts, you know? I mean, it was clearly just, like, be as afraid as possible. And then they pass things like the Patriot Act and other stuff like that that we've been living with ever since. Our civil liberties have been essentially destroyed in a lot of ways in this country thanks to 9/11. So when there's a crisis and I don't immediately see the world leaders or establishment or status quo trying to make you afraid to take away more of your rights, that just sent off an alarm bell to me. That to me was just like, OK, they really don't get this at all, and they're just not dealing with it. So that's how I knew. And you just have to assume that the leadership today across the world because of how, let's say, easy It's been, particularly in the US, have no ability to manage any sort of a crisis scenario. They don't know anything like it, and they're not going to be able to do it. And that's what you're seeing right now. You know, you cannot trust authority to-- you can't trust what they say at all, period, end of story. Like, just don't. And I hope that's a lesson for people out of this, you know, to think for yourself, to analyze the facts, and use your own intuition because no one's coming to save you. A politician is not going to come save you. The government is not going to come save you. When you need it, they're not saving you. And by the way, they didn't save you in 2008 and 2009 either as I like to explain. You wouldn't have Donald Trump elected. You wouldn't have had the upsurge in Bernie Sanders, right-- it's a youth-led political movement-- if things were just so great after that the crisis. I mean, we're still dealing with the consequences of that. DREW BESSETTE: So do you think the reason that there was no real reform after 2008 was just to kind of kick the can down the road, and it's made everything-- you know, this situation maybe worse than it was? MICHAEL KRIEGER: Oh, 100%. I mean, we would-- it's a combination of reasons. First, the one reason which I describe is because if you're just going to make another castle of stand on the old castle of sand, you're going to end up with the same result. But the other reason is that the leadership, OK, the sorts of people who were being listened to back then are the exact same sorts of people that are being listened to on television, right? I mean, they're still bringing Larry Summers out to talk, you know, and nobody asks him about Epstein. But you see my point. Like, they just keep wheeling out the scene completely discredited, corrupt, cronyish people that they've been doing for decades. So it's the same thing with the Iraq War, right? There's no consequences. The people that were cheerleading that war on are now resistance heroes to, you know, neoliberals. We're just recycling the worst, most wrong people that we have in our society into different leadership positions. So when you have the situation-- and it's the same sort of thing with Wall Street investments. If you bail out people that made mistakes and make them whole or will help them regain their fortunes, you're not actually putting those assets into stronger hands. And it's the same sort of thing with leadership. Of all of our leadership that we need to listen, the people that are making decisions and advising, let's say, President Trump or President Obama, they're all the same wrong, clueless 'people we've had for decades. So I have no faith that anything's going to get sustainably better until all of these people are gone. And I'm not saying, you know, dead. I'm saying-- DREW BESSETTE: Yeah, yeah. MICHAEL KRIEGER: --just completely irrelevant to the national dialogue and to what we're doing. We need an entirely new group of people and even on an individual level in communities just to step up and be able to be the voice of reason. The people that have been leading us-- I mean, it's even a wrong word to use because there's no leadership about these people-- are the most unwise people we have, right? The most corrupt people that we have in society. But here's the good news. I think we have a ton of wise, smart, heroic, courageous, innovative talent in this country and in the world. We just need to be able to elevate those voices and those people to create the new world that I think we can create. But I think this is a transition point. So in other words, once we get through this transition point-- and it could take a few years. Not just coronavirus, right? I mean, that's just domino number one. That's when I'm going to get so optimistic about our future. Could take a few years. But that's what needs to happen. We need a complete changing of the guard-- complete. DREW BESSETTE: So you're saying you would be buying the dip here? MICHAEL KRIEGER: No. DREW BESSETTE: In cultural terms? MICHAEL KRIEGER: Well, I would be trying to build what's coming, OK? So I wrote a series, and I recommend anyone watching this check it out, on localism. And this is something that I'll be talking about more and more going forward. It's about-- I think it's a four or five part series. I don't think I wrote part five yet-- maybe next week. But it's just talking about how I think society, politics, culture everything should be structured, and it just discusses this top down, overly centralized approach that we have and we've come to embrace where we're looking to Washington DC for everything where we say, oh, we just need to elect good people or, you know, oh, well, if 2020 doesn't work out, 2024 is going to work out- - that's just like the slave mentality. The way we're going to get out of this is for as many people as possible to look at themselves first and say, I can't change Washington DC, but I can change my mindset. I can change my behavior. I can be nicer to my wife. I can be nicer to my neighbors. I can be a better person. I can do stuff, OK? Every single person can control their attitude and their lives. And if enough people do that, the world will change. But we're just not there yet, unfortunately. But I think something like this and as other dominoes fall from here on out could be the catalyst to spark that movement in people. And I hope that's-- and I hope I can play a role in inspiring people to think that way. DREW BESSETTE: Awesome. And so let me bring this back a little because obviously, that's kind of where I want to end this conversation. But what does the coronavirus mean-- you talked about the domino effect, right, and how this is possibly the first domino. I might think that's arguable, but hey, whatever domino-- first, second, third, whatever it is-- it's certainly a big piece falling into place now. And what does it mean for what you described as the everything bubble? And I mean, it's not just you. It's a lot of people here on "Real Vision." And what does it mean for the fragility of financial markets, and is it a warning sign for the rest of our systems that this everything bubble popping could be a sign of more-- it could be the start of the storm, so to speak? MICHAEL KRIEGER: Yeah, I mean, that's how I see it. And another thing just for listeners to check out, I wrote a series as well in 2018 called "The Path to 2025," where I laid out that I thought the world would completely change from that point on into 2025, everything. And I'm talking like geopolitics, financial markets, economy, centralization versus decentralization. Virtually every single thing that we've known since we were born about how the world works, I believe almost all of those things will be completely turned on their head by around 2025. I think that's sort of the window. So we're right in that window. So if you think about the coronavirus as a domino, well, think about one of the things I mentioned in the "Shaky Foundation" piece. Going into the coronavirus, we had built an equity bubble, another equity bubble. We had a bond bubble that's even bigger than the equity because as we're discussing long term trends, my entire life-- again, my entire life has been a bondable market for sovereigns. I mean, it was in the late '70s or early '80s where interest rates were at its highest. And they've been coming down for 40 years. If you think about that, in a lower interest rate environment for 40 years, when that reverses, everything reverses. Everything changes because so many of the behaviors, whether it's the military, whether it's the financial empire, or it's just your average asset prices that are boosted have been boosted for 40 years because of low interest rates, all of those things start to go into reverse or break down. So I'm seeing the coronavirus. It's going to start creating pressure. I don't know if you saw this, but a lot of companies are now drawing down revolvers. They announced that yesterday. So you're probably going to start seeing liquidity tightening. And now you saw what the Fed announced today with, I think, what was it, $500 billion or trillion in repos? The point is, companies are going to start struggling. Individuals are going to start struggling. That's going to impact spending, but it's also going to impact credit. And credit, of course, as I just mentioned, is the biggest, most important market in the world. And credit and low interest rates have kept all of this, all of the behaviors, whether it's geopolitical or domestic, consumption behaviors, it's underpinned all of it. So if that trend is in the beginning stages of reversing, it's not-- yes, you know, there's this blow up. And when you watch the stock market decline, you say, oh, you know, wow. We're just going to be in this big blowup forever. It's not quite that. You have to look at it like we're probably at the beginning of a multi-decade trend reversal. And the consequences of that are impossible to fully appreciate at this point. But what you can say is if you have an empire and a domestic economy that's been built on a 40 year bond or interest rate bull market, if that ends, everything, everything about the way the world is constructed, will end. DREW BESSETTE: Yeah, I mean, the editorial team here in "Real Vision," we have a slack channel that has been screaming about cruise line credit and even casinos and everything. Every section of the credit market seems to be at least feeling that pressure, that liquidity pressure that you just talked about. And in that, let's look at the oil industry for a little bit because you were an oil analyst at Lehman and-- or under the oil analysts at Lehman or whatever you want to call it. What do you see going on there? I mean, obviously, there's a lot of things blowing up. The Saudis are targeting somebody, probably the Russians, maybe somebody else, maybe us. What's going on there? MICHAEL KRIEGER: Yeah, so, OK. Now that's interesting. I don't follow the oil markets very closely at all anymore. But when I saw the reports of how OPEC plus Russia had a meeting, and they were trying to get together on some production cuts, and the Russian representative basically was like, no, know we're not doing it, enough's enough, that really made my hair stand up because that, to me-- I mean, the narrative that's been out there forever is that Russia needs oil prices higher. And if Russia doesn't-- if you recall back in 2015 or so, every single financial publication was like, oh, Putin's gone. You know, Russia's dead. Look at the ruble. It's over for them. They can't handle these low oil prices. Well, you know, two years later, we're told that Putin is the mastermind that got Donald Trump elected. So I guess that didn't work out. But the point is this. Whereas the US is very fragile, I think a country like Russia is much more anti-fragile than the US right now because they've been battered so badly. The USSR already collapsed. They've been through that sort of collapse already. The society has been through that. And so what I-- and this is pure speculation, but it's something that's going through my head. Did Putin look at the situation and say, OK, we're going to make a power move here? You know, we're OK with this. We're going to handle this. We're going to put pressure on the societies that are more fragile than we are. And let's see how you deal with it. I sort of see the move in that sort of geopolitical context. Again, I could be wrong about that because I don't pay that much attention to this anymore. But I will say this. I think you're going to see more moves like that going forward where countries that have been pushing for multi-polarity such as China and Russia, for less of a US hegemony, will start making moves to weaken the US position globally when they have an opportunity. And then I think they're seeing this as an opportunity. I mean, it sucks to say that, but I think that's just how the world works and another example of this would be-- I don't know if you're following it, but China is now aggressively sending supplies as well as personnel to Italy as they are going through this. So that's a move. Now is China doing this out of altruistic reasons? No chance. What are they doing? They're trying to look good because they know that the US looks terrible right now because of how this has been handled. And so China is going to say, hey, no one's helping Italy? Your own neighbors aren't going to help you? The US can't even, you know what I mean, make test kits? Here you go. Here's some ventilators. Here's some plasma. So I think one of the things that people aren't appreciating about coronavirus is it's very likely to be a domino that starts that acceleration of the decline of US hegemony globally. I could have never thought of it. I've written a lot about how I think by 2025, the world will be fully multipolar. But yeah, I think this is going to be a catalyst that leads to the United States' dominant position in the world being reduced. Now how far reduced? I don't know. That remains completely unknown. But if you're talking about a country that's basically been able to tell the entire planet since, I don't know, since World War II or let's say since the collapse of the USSR what to do at almost any given moment and everyone has to listen, those days are now over. And I think coronavirus is going to be an event that accelerates that reality that a lot of people have been fighting. But again, this is something that I've also written about. It's not a bad thing. Empire has been terrible for the average American, horrible for us. It's not good. It creates a surveillance state at home. It funnels money to the worst people in the worst industries. It encourages financial scams, engineering, war. We've completely neglected our own country because we're so focused. All of our energy and all of our money is focused on dominating the rest of the world so that a few oligarchs can get a power trip and make more money. It's been terrible for the average American. So if we're like, let's say, post-2025 or even now, you know, this country can marshal its talent and actually make things and actually create things and actually innovate and focus on our communities and our states and what's going on within our borders as opposed to trying to control people in Afghanistan and Iraq, we're going to be in great shape. We're going to-- everyone's going to be a lot happier after we get through a tough period. So if you're attached, right, if you're psychologically attached to the empire, thinking it gives you some sort of power or pride or anything like that, you should let that go because it's not good for you. On the flipside, though, we also don't want to be dominated by another empire. So we also need to be careful that you don't want another hegemon, right? You don't want China to all of a sudden be bossing around the US. DREW BESSETTE: The entire, world, yeah. MICHAEL KRIEGER: So it's a balance. But I think-- you know, this is what I've been saying for a long time. We need national defense, not national offense. We've been focused on national defense, which is what empires do. We need to be focused on national defense, which is making sure that we can be a sovereign country, and we can be a strong country. But that means focusing on our stuff, OK? We have tons of resources. We have tons of talent. We still have a constitution. We still have a legacy of freedom and entrepreneurship. There's so much talent in this country, and 99% of it has been wasted by empire. So don't lament necessarily what's happening. We just don't want to go too far in the other direction, right? We don't-- DREW BESSETTE: Yes. MICHAEL KRIEGER: You don't want to be a weak, collapsed country that other countries take advantage of. So you don't want the pendulum to swing too far. But the pendulum has been all the way over here, which is crazy, oligarchic empire. So we need to bring it all right over here. We don't want to bring it over there. Right here in the middle-- sanity, you know, equilibrium. That's what I hope. DREW BESSETTE: OK, so I have a few more questions for you. But naturally, what I just thought there, we kind of started this conversation talking about the hegemony of the dollar rather than the hegemony of the United States military. What do you-- I mean, obviously, it's going to take a lot of economic and financial changes for the United States dollar to not be the world reserve currency anymore. Do you think coronavirus is the first domino in actually changing that? And if so, where do you see this-- what is the natural progression of that if this actually is the first step in changing of the guard, so to speak? What is it going to be replaced by? Excuse me. MICHAEL KRIEGER: Sure, sure. So this is something that I have been writing about for a very long time. And what I-- there's a few things. So the writing has been on the wall for a while, especially since Trump came in. But this has been going on for quite some time anyway. The US dollar has been more weaponized. You've seen that with Iran and even with Europe threatening them that you're going to be cut off from the banking system. US banking system, if you-- let's say threatening Europe that if they trade with Iran, companies could be taken away from the US financial system. So it's been this huge stick. And so when the global reserve currency becomes that politicized-- and it's always been politicized. But when it becomes clearly, overtly, and explicitly the primary weapon of empire just to beat people over the head, that's a problem of such enormous magnitude that there will be a solution. So I'm not here trying to say I know how it's going to play out because I definitely don't. But I do when you have a problem this big and you have actors motivated to solve it in some way that it will be solved in some way. My base case is that the world sort of bifurcates a little bit. And let's say you have-- in a multipolar world, you may have certain blocks. And they use a certain currency. And then the US and maybe its allies and blocks use a different kind of currency. And maybe it's the dollar. And there's sort of these separate parallel systems with different dominant currencies. That's one option. There are other things that we've seen out there. Like, could gold be used as settlement for big international transactions. I don't know. Could Bitcoin? It could be. It's tough to say. I mean, the bigger point here is that when you have a problem that's this big, a solution will be figured out. And so that's more my view. Now, what do I hope? I hope that whatever the solution is, it's some sort of politically neutral currency that the world sort of does naturally, organically comes to. I'd prefer not to be a top down thing. I'd sort of hope it's just something that's like-- not that it will be these things but I'm saying like that has the qualities of gold or of Bitcoin, which is that nobody controls them. They're just these neutral things that you can take from one place to the other. It's your asset, nobody else's liability. That's the sort of thing you need because the moment it's controlled by a body of people, even if it's on an international level or a country, it's not really a neutral global currency. And so that's what I hope. I don't want to see in my lifetime, and I hope we never see it again, a country, any country, controlling the global reserve currency. I think that should be the biggest lesson of the last 40 years-- that if a country controls the world currency, totally controls the global reserve currency-- fiat currency, right-- they control the world, period. I mean, there's no-- you know, you control the financial system, you control the entire planet. And so the whole planet will be under the empire of whatever country controls the reserve currency. So I hope that we're smart enough to never let this sort of situation happen again where one country is running the currency for the planet. It's crazy. DREW BESSETTE: Yeah, I mean, I agree. I mean, you're the expert here, but I mean, everything that you just said makes perfect sense to me. And maybe it ends up actually being a combination of gold and Bitcoin, or maybe it's something totally new. But-- MICHAEL KRIEGER: Right. DREW BESSETTE: --in between here and there, how do individuals stay afloat through the turbulence, and why do we have to embrace change and in times like this? Or what is the risk of not embracing change? MICHAEL KRIEGER: Right. So it's going to be difficult. And this is what really makes me a little bit sad over the coming, let's say, months or even years is that we already have a situation where the bottom half of the population in the US is so stretched. And this is what I wrote about in my "Financial Feudalism" piece-- you know, that they've taken on so much debt just to survive to try to buy housing. So for example, one of the big problems is 40 years ago or so, if you look at the ratio-- two important ratios-- the ratio of income, let's say real median income, to housing prices or real median income to a college degree, you / those things were attainable for people without taking on an enormous amount of debt and then still barely being able to make your mortgage payments. It was an attainable thing. And we were, as I mentioned earlier, at the beginning of a huge asset boom. So you had all these generations that were able to buy all these things at reasonable valuations. And we were in the beginning of an asset boom. Now we're at the end of-- most likely the end of this 40 year debt bubble. And asset prices may not increase like that going forward. I mean, they probably won't. And so you know what's going to happen to young people? I mean, what's going to happen to young people with a ton of debt? They can't afford a house now. They're not having children because of that insecurity. I don't know, you know? I understand-- as much as I disagree with the actual policies, a lot of policies, of Sanders, I understand his supporters. I understand why they're gravitating to that because it's this desperation. I mean, if I were 30 looking to start a family and I wasn't in a fortunate position I'm in and I have a lot of debt and I'm looking at the future, I'm thinking, this is extremely bleak. So I don't know how we're going to help that. I don't know how that gets worked out. It could get worked out by gigantic deflation, I suppose. But I don't know if that's the right solution. So I mean, the truth of the matter is, it's still too early to know how this is going to help out. But we really need to be thinking about the fact that an entire generation isn't forming families and is completely indebted. And so we're just so far gone, we've lost compassion, empathy. We're not thinking about our fellow people at all in this crazed pursuit of asset bubbles and power. We just need a complete revival. We need an ethical revolution. That's the real-- a consciousness revolution. I mean, if there's one revolution I want to really see, it's that. And that's as I was mentioning earlier with the individual. It starts with you. It starts with your mind, starts with your consciousness, all of us, because right now, we're an extremely unconscious, unethical, immoral people, quite frankly, as a whole and particularly the people in leadership positions, the people with the resources. And I've been very frustrated, you know, because I was in a job that paid very well. I also come from a privileged background. I've had things pretty easy compared to a lot of other people. And so I've seen it as my sort of duty to speak out and try to do what I can. But what I noticed is 99% of my socioeconomic class does nothing of that. They're just completely obsessed with this tunnel vision of getting more and being richer. And there's nothing wrong with wanting nice things and being successful. But to just completely be OK with the hollowing out and predatory nature of our society and culture to our fellow people, to just not care at all, is horrible. And I hope we change. DREW BESSETTE: Well, I mean, I don't want to leave on that dark of a note, but we're just running out of time here. We could change, and that's positive. That's the beautiful thing about it is it's really-- the decision is up to each and every one of us. And so with that, we're going to leave you. I mean, I could talk to you for another five hours. This is such a pleasure for me despite the dark topics we kind of touched on. But if you want to learn more from Mike, check it out from libertyblitzkrieg.com. Obviously, we're going to have more and more interviews like this. So hopefully, we can get you the best information as soon as possible. And for Real Vision, I'm Drew Bessette. Thanks for joining us. JUSTINE UNDERHILL: If you're ready to go beyond The Interview, make sure you visit realvision.com where you can try Real Vision Plus for 30 days for just $1. We'll see you next time right here on Real Vision.