Goldsmith comment: In the final installment of our "End of America" interview with Porter, he tells you how he'll escape the U.S. if things get really bad. He also predicts the one major freedom U.S. citizens will lose in the next two years.
We'll begin our Dr. David Eifrig interview series in Tuesday's Digest. In the interview, Doc discusses the strategy he's used to go 12 for 12 in his Retirement Trader advisory. Even if you don't sign up for the service, using some of the simple tips Doc shares in this interview will vastly improve your trading results.
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Sean Goldsmith: I know previously you've discussed an escape plan.
Porter Stansberry: Hold on. Let me go back to that facetious question [where I'm holding my offshore assets]. One of the things I used to really like to do in investment conferences when I used to speak in front of a bunch of people every year... I do little of that anymore because I have a family now and I don't like to travel that much without them. But I would get up and say, "Hi, everybody. How's everybody doing today? How are things going?" And we talk about their investments, and then I would ask the audience, "Now, how many of you people here have an offshore bank account?" And there would actually be people who raised their hands.
SG: Another good one is when Doug Casey was giving a speech, and he'd get up and say, "Well, I got a call and I know that there are two federal agents in the audience, so if you guys would please stand up? We all know you're here, so please just stand up and show yourselves out." And of course no one had called him. He was just making a joke. And sure enough, two federal agents stood up and walked out of the conference.
PS: That's great.
SG: So back to my question... You've previously discussed an escape plan. I would like to know what is your plan – if you're willing to discuss that – if things get bad enough in the U.S. Do you recommend the average American citizen have an escape plan?
PS: Well, this goes to what I think everyone considers to be the fringe element of these discussions.
SG: Certainly.
PS: And so let me preface my remarks by saying I consider the idea that I would have to flee my country because of political or fiscal pressures to be remote. The possibility is certainly remote that I would ever feel persecuted enough individually to flee the country.
SG: And that's coming from a guy who was sued by our country.
PS: Yes. The government has targeted me individually. It cost me $3 million and eight years of my life to fight the lawsuit that resulted from it, so I speak from some experience. But I do consider it unlikely I will need this contingency plan.
On the other hand, I firmly believe that it is my responsibility to always provide for the safety, the security, and the well being of my family. I can't do anything to save my neighbors. I might not be able to do enough to save our subscribers, but I can damn sure save myself and my family from any and all outcomes of this coming hyperinflation.
So I have provisioned the ability for me to leave the country secretly, anonymously, and I have taken the steps to make sure that I have assets overseas that can sustain me in the event of an emergency. This may not be for you, and it may be completely unnecessary. It probably is. But I know a lot about what's going to happen here. It's going to get really, really ugly. And nobody can know exactly what the outcome will be. So I think that taking certain precautions in a limited way is simply prudent. Whether you feel the same, of course, is up to you.
SG: All right. So a couple of questions for entertainment value... I want to know – let me preface this by saying I know that never in a million years will you ever enter the political arena – but what would you do to fix the U.S.?
PS: That's a very good question, and I have no interest at all in serving my fellow citizens, at least not at the wages that the government will pay. So…
SG: Well, everyone knows that you don't make money as a politician with your wages. It's in the kickbacks.
PS: Right, exactly, and I'd rather just make money honestly. So my answer is sort of silly because there's no political way to do these things... but if I was king for the day and my edicts would remain in effect, I would start by doing one simple thing.
One thing you have to do is have a balanced-budget amendment. It's completely immoral to spend more than you tax if you're the government because all you're doing is taxing future generations of Americans who are not even entitled to have a vote on decisions that you're making.
It's totally immoral to leave vast debts to our children and grandchildren. Every American ought to understand this. So I would put in a balanced-budget amendment that says unless our continental United States is invaded by a foreign enemy we have to run a balanced budget. If the Mexicans decide to invade us, then OK… we can run a deficit for a couple years just until we can repel the invasion. Perhaps the Canadians will come after us. We don't know.
But there's no point at all in believing these foreign adventures in Iraq and Afghanistan are worth the debts we're going to leave to our children. And don't even get me started on Medicare and Social Security running deficits like that. It's just completely immoral, and it shows just how decrepit and disgusting the American political process has become. So a balanced-budget amendment is No. 1.
No. 2, you have to have sound money. When you don't have sound money, none of the economy can function correctly. Prices are the most important form of information in the economy. Prices are what inform entrepreneurs about what needs to be created and what doesn't need to be created. When you don't have sound money, you have a completely distorted price system, and it all falls apart.
Then of course, people say, "Oh, look, capitalism has failed." No, we haven't had capitalism in this country since before World War II. What we've had ever since then is this sort of phony corporate state capitalism, really sort of socialism-light. So you have to have sound money... Otherwise, the economy can't function appropriately or efficiently.
So a balanced budget, sound money... When I say sound money, I mean either gold and silver as money or a sound backing for such a currency. So you can say 25% backed by gold, 10% backed by gold, 100% backed by gold. I don't really care about that. I just want the money to be sound, and I don't want inflation to be possible, legally.
And then the third thing, I think, is you'll never be able to keep those reforms. You'll never be able to keep a balanced-budget amendment in place. You'll never be able to keep sound money in place until you change the fundamental nature of our democracy. And this of course is the most radical idea that I'll share with you. I have a simple idea to fix America. Everyone should be entitled to as many votes as they have spent dollars in taxes. Real simple. If you spend a ton of money in taxes, you get to have a powerful vote. If you don't pay any taxes, you don't get a vote at all because you haven't invested at all in the equity of our country. So I think that would really eliminate a lot of the problems that we have with people voting themselves the largesse of our treasury.
Right now in America, half the people in our country don't pay any federal income taxes – none. So they are net beneficiaries of the welfare state, and they're going to continue to vote for more and more welfare until they bankrupt our entire country. The incentives of that are so clearly perverse everyone should understand why that's not a safe process, and I think that just giving people the vote based on their taxes is really simple.
And I tell you what would even be better: You could make taxes optional. If you don't want to vote, you don't have to pay any taxes. Boy, that would really change the math, wouldn't it? Of course, I don't expect that to happen either. But those are the three principles: a balanced budget, real money, and change the voting system so only people who have a vested interest in the success or failure of our country are able to have a voice in the decision-making process.
And by the way, all three things were in place when our country was founded. So to say that these things are radical is really not true. These things are actually conservative. They're what our country was founded on. They're just common sense. And if you put those things back in place, our country would be on the right foot almost immediately.
SG: All right, and in closing, I was wondering if you would be willing to share a prediction, an End of America prediction that you haven't yet made with Digest readers.
PS: Oh, jeez.
SG: And I know you've already predicted a lot.
PS: An End of America prediction. OK, sure. I don't know if I've exactly predicted this yet or not, but I believe it'll be against the law for you to send assets overseas without restriction by January 2013.
SG: All right.
PS: Some kind of significant capital controls will be in place in two years. So you've got two years to really prepare yourself for what's coming, otherwise all your assets are going to be trapped in the States, where they'll be confiscated or taxed or inflated away.
SG: All right. Well, thank you very much, Porter.
Goldsmith comment: We hope you enjoyed this interview with Porter Stansberry. If you'd like more information on the "End of America," and to see how Porter is advising his paying subscribers to play the situation, click here...