In the latest Goldnomics latest podcast, we consider whether the gold price will reach $10,000 per ounce in the coming years and what factors will drive prices.

Watch on YouTube or read the quotations and transcript below.

Dave: Hello and welcome to the Goldnomics podcast where we look at global markets through the lens of precious metals. And you can keep your eye out for new episodes on iTunes, on SoundCloud and also on YouTube and you can like us on Facebook and follow us on Twitter.

And wso far in this series of podcasts we’ve looked at 2018, and what developments we can expect in the global financial markets for 2018. And then in our last episode we asked the question:“Is this the greatest stock market bubble in history?”

This month we are asking the question: “Is the gold price gonna hit $10,000?”

And as usual I’m joined by Stephen Flood, CEO of GoldCore and Director of Research and well-known precious metals commentator Mark O’Byrne. Gentlemen, welcome once again.

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Mark: Hi everybody.

Stephen: It’s great to be here.

Dave: Now is the gold price going to $10,000? – $10,000 Mark really?

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Mark: Yeah, who knows, I don’t know, you don’t know, Steve doesn’t know, nobody knows and nobody can predict the future and that’s always the first point that we always make.

We can’t predict the future we cannot predict the future price of any asset. But generally over time assets tend to appreciate, not because they are appreciating per se but because fiat currencies are losing value over time.

So, I mean that’s the first core point that has to be made but I suppose when forced to make calls on these markets which sometimes we are – we take part in the Bloomberg gold survey and we take part in the Reuters precious metals poll and we’re polled about the outlook for these prices – we have a fairly good track record in this regard over the years.

So, when we look at it, I mean, you have to be bullish it in the world we live in today.  In terms of we looked in the previous podcasts at the “The Everything Bubble” and the stock markets and their overvaluation. We see both stock markets and bond markets as overvalued and I think in that context and a lot of other factors particularly geo-political factors I think the outlook for gold is as bullish as it has been a long time.

Possibly as bullish as it was in the early 2000s. So, yeah, I think we’re both of the view that is going higher and the question is how high and over what time frame really?

Dave: Right, so what time what time frame are we looking at here do you reckon?

Stephen:  Next hour or so, who knows!

Mark: It depends what Trump tweets!

Dave: Steve, I’ll drag you in on this here. So, do you see it going to $10,000 an ounce?

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Stephen:  Oh yeah, no doubt. And the time frame it obviously is very difficult to pin down. Short term you’ve got the futures markets playing a huge role setting the gold price. The paper gold, market chasing the physical gold market. It’s like the tail wagging the dog. So, short term I don’t know where it’s going to be but I do think the long-term fundamentals are very supportive of higher gold prices, i.e. lower currency values. We’re in a world where currencies are competitively being devalued, they’re being printed. Politicians and central banks are paying the bills of today with the money of tomorrow and they’re their impoverishing savers and pensioners in in the process. So, you know everything that’s physical, everything is tangible and gold is one of those, is going, its monetary price is going to rise with that backdrop.

Dave: Right. Okay, and I suppose to give a bit of a framework on this, we probably have to look at it through a number of different angles. I mean geopolitics is probably one of the key drivers for this is. Would you agree on that?

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Mark: Yeah, that would be one of them. I think that the monetary aspects would be bigger and monetary policy and the scale of quantitative easing we’ve seen, just the destruction of the central bank balance sheets, you know that’s probably a bigger factor.

We tend to look at it through the lens of four key factors. One is the monetary side of things, the other one is geopolitics and then the systemic side of things –  MSGM – and then there’s the macro.

So, the macro is the wider economy and we’re gonna have a recession, or depressions, or booms or busts and do we have inflation or deflation – the wider macroeconomic backdrop. So, they’re like the four fundamentals that you need to evaluate the market. And I think if you look at those four fundamentals….. And the final thing and then is actual supply and demand in the gold market and all those factors that drive the supply and demand in the global gold market.

Dave: So, let’s take that one then from the top. So, we’re looking at monetary policy primarily as your key driver, do you think?

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Mark:  Well I think so, yeah. And oftentimes that reacts to these other factors but I think it’s the prime driver over the medium and long term.

Dave: A monetary policy and quantitative easing is something that we’ve mentioned in the last two podcasts. But just in case our listeners haven’t listened to either those podcasts, and I would recommend you going back and find them and have a listen they’ve very good content in both of those, give me give me a 30 second explanation just of the quantitative easing and the monetary policy impacts on the gold price and we can expand on that from there?

Mark: Thirty Seconds? That’s ambitious! I mean yeah, basically the central banks have printed a huge amount of money and increased the debt load.

The debt is in effect being transferred from the private sector to the public sector and yet the debt has just gone pretty much parabolic. I mean when you look at the charts it’s incredible. And we covered the debt to GDP ratio in the US in the recent podcast.

In most Western economies and indeed at a global level now that global debt to GDP ratios or over 300%. So, debt is going up very sharply and it’s nearly a straight line up at this stage, whereas GDP seems to be evening out.

We’re not getting…. Before when you increase debt you’d get a leverage return on the increase in debt whereas now you’re not getting that return and so, it just makes the economy very vulnerable.

And Jim Rickards puts it well. He talks about 1998, when Wall Street bailed out the hedge funds LTCM, the biggest hedge fund in the world. And then in 2008 Wall Street got bailed out by the central banks. Now the central bank’s balance sheets are massively impaired and they’re potentially in big difficulty if you get another crisis which seems to be a question of when rather than if.

So, the question then is: Who’s going to bail out the central banks? Who’s going to bail out the system the next time?

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Stephen: The IMF!

Mark: Yeah the hope is that it will be the IMF but I’m not so sure how that’s gonna work out.

Stephen: Or in other words you and me, the little people, where we are the lender of last resort in this entire construct.

Dave: What form does that take? How do you and I become the lender of last resort?

Stephen: Well we’re gonna pay more in taxes. We’re gonna have to work harder for less and our savings and our pensions are going to be levied and bail-ins as well.

Dave:  You mean bail-ins now as opposed to bail-outs. So, just explain the difference now on for our listeners.

Mark: Exactly well, with the so-called “bailouts”, the taxpayers….. the government went  and took money from the taxpayers in the form of higher taxes and pension levies to bailout the banks. And now the narrative has changed whereby they are not going to take money off the taxpayers they’re going to take money off the depositors. And as the so-called creditors who have been protected over here-to-fore you know and the narrative is “Oh we’re so, good now. We’re looking after the taxpayers, we’re just going to hit the creditors. You know they’re going to have a haircut rather than the taxpayer”. But the biggest taxpayers in society are SMEs and business people and the people who create wealth and create jobs in our economies. And if you go and take their capital away in the form of taking there deposit it’s going to have a hugely deflationary impact. So, it’s a really big issue that we cover quite frequently because….. even just this week in the market update because, if you look at the Italian banks, you look at the various European economies and the level of debt…. Many European economies including here in Ireland, and there are real risks in that regard.

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Stephen: If I come in there you know if corporates will be hit, they’re the ones who are very unprepared in this eventuality. So, if there is a bail-in of your high street bank, it’ll be sold to the people on masse saying; “Hey listen, only those people over a hundred thousand are going to be tapped to pay this bill. But those people who include entities which are corporates and those corporates will be tapped as well and that’s…..

Dave: What’s the knock-on effect of that? People listening are going to are say oh that’s okay as long as it’s corporates and it’s not me.

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Stephen: Yeah, so who do the little guys work for? They’re the SMEs, they’re the people who actually you know, keep the lights on and keep money moving around the economy and keep people in jobs and pay mortgages through their employees. So, they’re gonna be hit up. They’re gonna have a massive haircut and I don’t know even how…. if this has been planned out. How they’re going to manage it all. So, this is this is going to affect every single family in all of those major states that have had you know, totally unsustainable debts. And it’s coming, and I can absolutely say that it’s going to happen at some point. You’re going to see it. I don’t know which economy first it could be somewhere like Italy it could be France, it can be Spain, Portugal, even Ireland. All of these economics are creaking under the burden of debt. And much of that debt has been hidden off balance sheet by the central banks. And it’s going to come back onto the market at some point. We’re gonna see higher interest rates and when that happens then that debt becomes very much unsustainable even at the rates that use…. You know the some of the ratios you see on banks they say; ”Hey you know, we are safe, we have passed a stress test, we can manage in a difficult time”, but I don’t buy it. I think a lot of this debt is still there and I think it’s unmanageable.

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Dave: So, as good as money in the bank is no longer a good thing?

Mark: Not exactly. What’s the expression; “As safe as houses”! And that’s the expression in Ireland regarding our property market that it’s “as safe as houses”, and we know what happened there.

Stephen: I was talking to a chap who works at a major bank in Europe, I’m going to say. And they were talking about their credit risk. And they said; “Listen the bank it’s completely fine you know we’re safe as houses”. And then they all have a big laugh about it because they know damn well what would happen to the house prices if interest rates go up.

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Mark:  Yeah and that narrative: “Cash is king”, can become “Cash is trash”, very quickly if inflation, ticks up and just some recent data in the US and UK and particularly the US and UK where the inflation pressures are building in quite a big way. And it looks quite a stagflation area which is the condition of the 1970s, 1980s where we saw gold prices go up twenty four times. So, but just one last point that, cash is king, and we can move to cash is trash and on the bail-ins thing as well, people think that they have that the government guarantee in each country, which is €100k now, £100k now. It used to be £250k in the UK. And very quietly and surreptitiously that was reduced to 100k pounds there about a year…

Stephen: It’s 75 now, in keeping with the Euro.

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Mark: So, yeah well, I’m surprised. I must check that. It was very quietly done and the thing about that is that people think:“Oh well I’m fine you know up to a hundred thousand”. And what they do is to put…..  If they’ve more than that they put it into two or three different banks. Yeah, but what would happen in that scenario, the government’s will need to get a certain amount of money to bail-out the banks. And therefore, the guarantee could be reduced overnight with the stroke of a pen. So, the hundred thousand guarantee or seventy five thousand euro guarantee or whatever it is could go back to fifty thousand.

Dave: It’s just a figure of revenue that has to be raised?

Mark:  Exactly.

Dave: And tell us how does this then…… this going to drive the gold priced because effectively people will be taking the cash out of the bank and putting an in to gold.

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Mark:  It will be one of the factors that would drive it yes.

Dave: And is this widely-held or is there a wide understanding of this bail-ins issue at this moment in time or do you think that there’s still a lot of education to be done around this?

Mark: The people have no clue. You know the majority do not have any understanding whatsoever. It’s rarely covered in the media. So, people are not aware about this huge…. just a lack of information in effect you know. I think people in our circles in the precious metals industry, tend to focus on these risks and sometimes we’re accused of exaggerating them. But they’re very real risk. We’ve done very in-depth research on this. And the research cannot be argue with. The facts are all there. It’s all laid out if you choose to look into the legislation.

Stephen: In Ireland that the “Bail-in Tool”, as the regulators called it, was brought in about two years ago. It was signed into law by the Minister for finance at the time. And I was like this is such a landmark piece of legislation. If it came in through Europe through a regulation the bank resolution directive. And I did a search in our Parliament, where our elected representatives, discussed the matters of the day. And I couldn’t find one single reference to bail-ins as being a point of discussion at all in the record. It just came in, it was signed into law as a statutory instrument, no discussion in any local political level. And yet it has a massive impact on every man, woman and a child in this country.

Mark: Yeah interesting we got an email from his clients this week. He’s talking about, I think a similar thing happen Australia just in the last week or two weeks, that it was passed in Australian Parliament. And again, there was very little debate and I want to look into it a little bit more in depth and I think it’s something that we might cover in the market update in the next week or two weeks.

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Stephen:  I would say though when… we don’t want to labour the bail-in point but if you manage the treasury policy of a company I think it’s absolutely your duty to look into the risk that you have across institutions. Like banks do this themselves. They look at the amount of money they have at risk across institutions they have certain levels. I think now even SMEs need to do that with their reserves. They need to have that money…. even it might be more difficult to manage. They need to have that money spread across as many banks as possible, banks that are safe, and they need to look at the balance sheets of those banks. And lending practice they need to look at where those backs are located.

Mark: The safest jurisdictions.

Stephen: The safest jurisdictions. And they and they need to do this today. There’s no time to waste. We don’t know when it’s going to happen. It could happen in ten years it could happen next year. We don’t know but the fact is the bail-in tools are there, the scene is set for higher interest rates, debt burden is going to become difficult to manage and we think that there’s going to be market events that these Treasury officials are going to have to answer for. And also, for people like “high net worth’s” and people who manage their family’s affairs they also need to be more discerning as to where they bank.

Dave: You raise a point there, the scene is set for higher interest rates. Now, a number of people listening to this they’re gonna think right okay well gold’s yield is zero. Okay interest rates are going higher. Surely that’s gonna be bad for gold?

Mark: Yeah that’s very much the perception out there and that’s the narrative and you see the media saying rising interest rates is bearish for gold. But if you look at the history and look at the data, interest rates rose continuously throughout the 1970s from below at the 10-year US Treasury, 10-year bonds below 5% in 1970, to up above 15% in 79-80 and gold prices went up from $35 to $ 850 in those nine years. So, rising interest rates weren’t a negative for gold whatsoever.

Same thing happened again more recently. Obviously some people might say; “Oh well that’s ancient history and we’re a long way from the 1970s”.

Okay, fair enough well let’s look from 2003 to 2007. I think interest rates went from roughly 3/3½% to 5/5½ %and the gold price went up from $ 400 to $700/800. So, the narrative is incorrect. Rising interest rates are actually bearish as you can imagine for assets that are bought with debt and with leverage. So, property would be particularly vulnerable to rising interest rates absolutely. Even stocks to an extent because a lot of stocks are bought on margin. The wider economy is vulnerable to rising interest rates. Gold is the least vulnerable to rising interest rates. Where gold is vulnerable as there’s always a degree of truth to these narratives… where gold is vulnerable is towards the end of an interest rate tightening cycle when you get a real rate of return. So, if interest rates rise for a long period of time and you get a decent rate of return over the actual inflation rate then gold becomes vulnerable. And that’s when I would be nervous about gold  and I would be very strongly telling clients it’s time to reduce allocations to gold. I mean we would always have a view that you should have a bedrock of financial insurance in your portfolio of maybe 5% allocation to physical gold. But in that scenario whereby you are getting you know you have a decent bank and you’re getting a decent yield on your deposits. Now that’s a good time to put some money into the bank and reduce allocations to gold you know.

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Stephen: When interest rates are rising, it causes and people to rotate from one investment strategy to another and that creates volatility in the market. And that’s the case for gold. So, a changing interest rate cycle is very bullish for gold whether it would be falling or rising. When interest rates are high and static, everything is steady, the market is doing okay. Interest rates are high we’re getting a decent rate of return on their savings then the argument for other type of investments that don’t pay as high an interest rate decreases. And that’s the same with stocks because you know you have more risk and you have a fairly boring in rate of returns sometimes. If you’ve interest rates up around from you know five six percent and that’s a fair return for the risk you’re taking. So, you buy bonds, you might you might go heavily into bonds and gold doesn’t look attractive. But if interest rates are rising to five percent quickly and then falling from five percent that creates anxiety in the markets that creates a need for risk mitigation and the argument for gold. So, it’s not so, much high interest rates but high steady interest rates. And I don’t think we’re there and we haven’t been there for a while. So, I think that that’s the counter-argument.

Dave: What about the quantitative easing issue?

Stephen: Yeah, obviously you might say the rug is being pulled from under the market because central bankers using their godlike powers are printing money. So, they’re changing the rules of the game to suit their own political purposes. And they say they’re not political but they absolutely are. And they answer to political masters in Europe on a national level. And so, when you print money you’re inflating asset prices, you’re selling that you’re selling a good story.

Dave: Artificially inflating?

Stephen: Yeah but it doesn’t look that way. So, that because it’s happening on a fairly steady basis.

Dave: On one side you’ve got a stock market where it’s very highly publicized that the stock markets are increasing the whole time. But you don’t hear about the increase in the amount of cash that’s being printed and the correlation between the two, the connection between the two.

Mark: Absolutely and it was a real correlation. If you look at the central bank’s balance sheets in the stock market, it’s amazing the correlation there. There was a correlation with gold up until their 2011 you know and that’s one of the theories. There’s a variety of different ways that you can look at the gold price and say right well you know what fair value for gold price is.  Let’s look at these different correlations and compared the ratios of different things. And one of those is the increase in central bank’s balance sheets. And it was going like one-for-one throughout the 2000s and then more recently 2011 that’s when the gold price fell very sharply but the central bank balance sheets continued to increase very significantly.

Dave:  And why did that relationship decouple. Because obviously we’ve had such printing of money over the last number of years. Why are we not seeing the gold price continued to rise significantly as it did back then?

Mark: Well I mean there’s a number of reasons. One is that it had such a huge increase in the first place. I mean it gone from $ 250 in 200, to $1,900 in in August 2011. So, I mean that’s a big move.

Stephen: That’s 10% a year isn’t it?

Mark: Exactly and it’s about 600 percent total return over those 10,11 years.

Stephen: On a 20 year basis it’s actually beaten most other asset classes which it again they don’t talk about in the media.

Mark: Yeah exactly there was great research from PWC just a week or two weeks ago. And it was publicized by the World Gold Council and it should have gotten picked up more widely. And they basically said,  PWC one of the biggest accountancy firms in the world in an advisory piece for sovereign wealth funds, who are some of the wealthiest and the institutions with most amount of money in the world. These sovereign wealth funds have been advised by PWC saying gold has actually outperform stocks and bonds over the long term . So, our argument has always been in our space, gold is a hedge gold is financial insurance, it’s a store of value and it is all those things. But now there is actually research that gold has actually outperformed stocks and bonds over the last… it’s a 10 year and the 20 year timeframe. And then actually over a 40 year time frame, so the lifetime of your average investor. If some prudent young man in this mid 20 start to save for his pension today and there’s probably not too many Millennials doing that, but we’re always advising that you should start saving for your pension early.

People are retiring much later so, it could be 40 years, it could be the lifetime of your investment horizon, your pension horizon. You know so, over 40 years since 1971 gold returned 10.5%per annum. And it’s outperformed stock markets and bond markets. You would think that the actuaries out there and the pension funds and all these people would suddenly gone “Okay!” You know and they’re desperate for return. So, I think they gradually will but the narrative is so, strong against gold that it’s slow to turn, the psychology towards it I think will to turn and I think that that returns argument is quite an important one.

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Dave: Yeah so, from a monetary policy point of view there’s been three key areas that you’ve discussed there. There’s the bail-in issue. There is the fact that in an upward interest rate environment gold actually performs well. And then the third thing we’re talking about is the quantitative the easing issue and how that continues to be very bullish for gold? So, on your list of criteria to look at the gold price. Monetary policy was the first one. Your second most important is?

Mark: The macro environments. You know whether it’s inflation, deflation stagflation is probably the next most important one yeah and then and then the geopolitics and then the systemic is very important too, the health of the overall system .

Dave: So, from the macro point of view in an inflation deflation environment we’ve seen very low inflation over the last number of years. Is that set to continue? Are we actually going to start to see more of an inflationary environment? And which is more bullish for gold?

Mark: Yeah, it’s a big question. High inflation and deflation are bullish for gold. Stagflation is bullish for gold, that’s inflation and then low economic growth. Benign inflation or low levels of inflation are bearish and that’s what we’ve seen in recent years. Because your previous question was “why did gold decouple from the central banks balance sheets from 2011.?”

And part of the reason was that it had become overvalued and one of the key things there was in the last few months it went up 20% from $1,300 to $1,900 in the matter of a few short months. And we went on Bloomberg TV and we said this gold is fundamentally overvalued and it could fall sharply, it could fall by 50%. Because it had gotten very overvalued in the short term. But at the same time I think a lot of people were surprised that it has fallen by as much as it did and that it stayed as low as it did for as long as it. Did I think part of the reason is you know…. coming full circle…..inflation has remained relatively benign.

Dave: What’s your view on then on inflation going forward? Are we starting to see inflationary pressures come in?

Mark: Yeah, we are we are, and it certainly looks like we were in the early stages of that. It’s a long time coming though and who’s to say that if you get a massive sell-off in stock markets, we could get a bout of deflation. And then central banks will probably respond to that in their usual manner by printing more money. And the Federal Reserve would likely go back to printing more money and QE would be started again in the US rather than the tapering. So, possibly the inflation may take off the slightly later than we think but it’s very difficult to tell why.

Stephen: I look at it and it’s really, really powerful arguments for inflation and deflation. And you know you go to central banks and they’re like “You know all of our policies they are not creating inflation at the targeted rate of 2%”, was the conversation last year and even in the last two or three years and because they see inflation as being related to growth. And  I liken it to an elastic band that’s been stretched. Okay and on one side you have the inflationary pressures building up and pulling the elastic band one way and on the other side you have the deflationary pressures.  On the deflation side you have technology feeding in price reductions on an awful lot of services and products around the world. And then on the inflationary side you have money printing. You have employment rates falling, more people in the employment market being paid, and more money moving around. It’s chasing the same kind of products.

And so, these things, these forces are pulling each other. And So, I think the theory goes that once you get to full employment, the employment market then heats up quite quickly as whereas employers start to vie with each other to pay more money to those employees. And then they spend more money and that raises the prices. And so, the US just hit full employment basically at four point one percent. We’ve met in this last month. And the thinking is that that’s going to really transmit in to inflation numbers very quickly that means interest rates are going to go up. Which means it’s the end of cheap money, which means the market, the stock market becomes very anxious about this and that’s one of the reasons it started to sell off was it was based on employment numbers. And we saw that last month and you’re seeing it in markets right across the world. European inflation rates are starting to rise and the UK is far ahead of everyone else, it’s over 3% now and it’s rising much faster than they thought. And so, and you know the stage is set for higher inflation rates, thereby higher interest rates and more risk when it comes to debt burdens in the future. That’s where we are at. That elastic bands and stretch in the in favour of inflation.

Dave: I like that analogy. So, let’s touch then on the geopolitical issue and we’ve seen an awful lot of increase in geopolitical tension particularly over the last 12 months. How is that going to now start factoring into the gold price?

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Mark: Well, I think it’s surprising people that it hasn’t factored in as much, but I suppose there’s been a lot of saber-rattling and a lot of threats but thankfully war hasn’t broken out.

Stephen: Well not in the west. But in other parts of the world.

Mark: Well, yeah! I’m talking in terms of the US and North Korea primarily, which has been the biggest geopolitical threat of war. But yet there are proxy war zone and obviously recently we see what’s happening Syria. The Middle East is massively destabilized and has been for a long period of time but it looks more destabilized now than you’ve seen in a long time and it’s getting to the stage now where you can very much see that the parties aligning against each other in terms of a you know in Syria now, and with Turkey they seem to be allying themselves with the Russians and the Chinese in the background, seem to be quietly supporting the Chinese and then Turkey. And then as obviously there’s the Israelis and the Americans. And it’s….. I don’t know I think it’s one the most uncertain…. and I mean my background in his history. When you  study history, you know you see these things and I think it’s as uncertain as it’s been for a long a long time and it looks like we’re building up to quite a significant, major, major military confrontation between world powers, particularly Russia. You see the demonization of Russia. And the Russians have done lots of naughty things that they shouldn’t be doing you know, but the dialogue is…. it’s not about dialogue. There’s no one sort of saying that we should sit down and talk to these people that as was seen after the Cold War. You know, we realized it’s not good to demonize nuclear powers and we should all sit down and you know deescalate and decommission arms and you know the whole nuclear arms race, people realize that’s not a good thing. We have a lot of hawks, neoconservatives in the States and the Pentagon is quite hawkish. And they see Russia as an emerging power and they don’t want the Russians emerging as powerful. They are trying to keep them down and then you have Trump come in and he’s…

Stephen: The great an antagonist.

Mark: Yeah, he’s crazy and he’s just he’s a perfect fall guy. And he can be manipulated to do anything and he’s doing all sorts of things that are creating huge instability in the world. And just even the… everything is the military, it’s always an aggressive response. Never sort of stepping back. Even when we were talking briefly before this the tragic school shooting in Florida you know…. And you know and the issues with gun control in the States. And the response from Trump is we need to arm the teachers you know and it’s just it’s just crazy. So, everything like it’s aggressive.

Stephen: At least he didn’t say “we need to arm the students”.

Mark: Because that’s the next step.

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Stephen:  And if I could come in there and you know I look at the geopolitical backdrop and what I see is a lot of saber-rattling. So, as Mark just said but I do think we have is a generation of leadership who has forgotten what that what the cost of war is and how you have to fight for peace. And you have to always be on guard, you have to maintain diplomacy, you have to have those institutions of diplomacy. And you’re seeing the United Nations being attacked all the time and it’s losing power.  Nationalist agendas are becoming back into vogue and I think that’s happening. Again I harp back to the same theme. I think that’s happening because it’s an easy answer. It’s an easy drum to beat nationally to blame a bogeyman for the woes of the people because you’re deflecting from yourself, you’re deflecting from the inherent weaknesses in our systems, which is down to monetary policies and the thieving that’s going on there. And you’re able to point to somebody else you’re saying; “Hey it’s not us, it’s not us that are destroying your livelihoods and giving you no security in your employment.” And you know you haven’t had a pay rise in thirty years is the average of American worker. “It’s the Russians, it’s the it’s the Chinese”

Mark:  “It’s the Mexicans, build a wall”.

Stephen: Yeah, it’s Al Quida, it’s the Mexicans. So let’s blame anybody but ourselves. So, it’s not because they don’t feel it’s their fault it’s that they don’t have any responses. They don’t have a planned a strategy to do that, to deal with this. They’re just going to…. you know it’s like Goebbels… like this is just as straight from the book the you know, World War II Goebbels. You blame, you make a bogeyman you blame him, you distract people from it and then you maintain control. Eventually it ends in tears. And it’s going… you know, I don’t know how this is gonna work itself out but you’re seeing it right across the world and right now you have the disintegration of NATO. You have Turkey going off-piste, you know invading countries, taking on mili