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Man on the margin

Mike Kendall

Dec 13, 2020 | Podcast | 3 comments

mike kendall man on the margin

Mike Kendall is the author of the Man on The Margin blog and a prodigious writer on classical economics, gold price signals, gold standards, supply side theory, cryptocurrencies and so much more. Mike is a former military and commercial pilot and brings a wealth of life experience and deep research to the crucial topics of macro-finance and political economy that are shaping the 21st century.

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Jonathan Doyle Nathan Lewis    


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Jonathan Doyle: [00:00:00] Hey everybody, Jonathan Doyle with you. Once again, welcome aboard to the supply side podcast episode two of season one, we had the fantastic Nathan Lewis last week back in episode one. So if you haven’t heard that and you want to hear from one of the people who has pioneered our understanding in recent decades of the central place of gold in our economies around the world, go and check out episode one.

[00:00:26] But welcome to this episode because we have a fantastic guest. Somebody I’m really looking forward to sharing with you. this is Mike Kendall coming to us from Dallas, Texas. It’s a funny story. How I first came across Mike’s work. I was training for an ultra marathon and I was listening to a George Gilda’s audio book.

[00:00:46] And he mentioned in passing Mike Kendall and his, important work on the man on the margin blog. And I somehow held this in my mind. It was like four 30 in the morning, freezing cold on this training run. And it stuck with me and I looked up Mike’s work. Discovered his man on the margin blog and have never looked back his writing on a whole bunch of topics related to economics, particularly gold price signals is something you really need to discover.

[00:01:16] So please make sure. After listening to this episode, you go and check out Mike’s blog@manonthemargin.com. Calm. So in this conversation, we’re going to cover a whole bunch of important topics. We’re going to talk gold standards. We’re going to talk macro, we’re going to talk MMT. We’re going to talk crypto a whole bunch of things in Mike’s wisdom.

[00:01:38] His depth of knowledge is just extraordinary. This is a man who has really devoted a great deal of time to truly understanding the supply side, the predicted. Give classical economic model, the work of guys like Jude Wanniski. So if you want to learn from somebody who’s really gone deep on these topics, then you are in for a treat in this episode.

[00:02:01] So that’s it for me for now. Please make sure you’ve subscribed to this episode. I’ll touch base with you again when we’ve finished, but for now, sit back, relax and enjoy this fantastic competence conversation with Mike Kendall coming to us from Dallas, Texas. Enjoy.

[00:02:19]Mike Kendall, welcome aboard to the supply side podcast. Thank you so much for making some time to join us.

[00:02:27] Mike Kendall: [00:02:27] Thank you. Thank you, Jonathan. Thank you for connecting with me and for starting this thing,

[00:02:34] Jonathan Doyle: [00:02:34] yeah, look, it’s been great. I appreciate you. And, last week we spoke to Nathan Lewis and you guys are both doing this in the evening. Your time you’re in Dallas, Texas. I’m here in Canberra, Australia. And. I, I’m not a, no, I’m not a night person. I’ve tried for decades, but by about seven, 7:38 PM.

[00:02:51] I wouldn’t be making any sense. So I appreciate you joining us in the evening.

[00:02:56]Mike Kendall: [00:02:56] 17 hours difference. We got to work at some way. So no problem for me, I can still make it past seven.

[00:03:02] Jonathan Doyle: [00:03:02] Yeah, I just wonder one day, if I will have my circadian rhythms will just make, magically change. We are going to talk about a whole bunch of great stuff. we’re going to talk a little bit. About, the work of Jude Wanniski. We’re going to talk about supply side.

[00:03:17] We’re going to talk about gold. I think you’ve got an incredible amount to teach us about gold, about price signals. I’m really looking forward to learning from you in that space. And we’re going to talk a little bit about crypto and whether it’s just this, The whole world of emerging crypto’s I’m.

[00:03:34] I had a conversation with my wife this morning. I’m just convinced that, central bank, digital currencies, I cannot convince myself that central banks are going to allow free play cryptocurrencies, such as Bitcoin to win. But we’re getting to that. What I wanted to do was I was reading something last night and I thought he, you, because I’m going to read you this short quote and, this, you could go any way with this.

[00:03:58] But this comes from Ross. Douthat’s new book and listeners might know Ross. Douthat’s a op-ed writer at the New York times, and he’s allegedly the only conservative left there, but, in his new book, the decadent, society. He says this on page 192, he said the fear that we’re printing and spending our way to disaster is confined to a dwindling band of deficit, Hawks and goldbugs and professional profits of catastrophe.

[00:04:33] So I read that last night and I was thinking, I’m not sure which one of those groups I fit into, but, I want to ask you based on that as an opening gambit, I’m not that sophisticated in this space. I just have deep concern that MMT and the vast growth in stimulus and the other stuff we’re seeing is unsustainable.

[00:04:55] Do you think that’s the case of being a gold bug or a prophet of doom or what’s your read on the waters that we’re sailing into?

[00:05:03] Mike Kendall: [00:05:03] well, based on that quote, I think it’s a, A factor of inherently understanding the world around you. like trees don’t grow to the sky and neither does debt. at some point it becomes unsustainable and you can go on forever like this, with trillion dollar deficits and there’s a cycle to history, you can go back as far as you want and the monetary world and the economic world, and you can look at empires and you can look at their collapse and they follow a pattern.

[00:05:30]and we’re repeating the pattern now, but they start out with stable money, low taxes. Then they get into the valuation. Then the taxes start rising. And then the collapse comes. And if you look at the Roman empire, for example, that went on for three centuries or something that collapse, and then you, pretty much had the British empire, end with a whimper.

[00:05:49] It wasn’t a catastrophe, but they went, there three, 300 year gold standard. Almost or 200 year and, in a world war one, they abandoned it, that their taxes raised, kept going up. they became more solution socialist in that empire follow the same cycle. And now we’re seeing it here in the U S we started in 1792 with our gold standard and lasted until 1971.

[00:06:17] And we Rose to the top of the economic pyramid. And, we became the, a unit. the sole economic power on, in the, global world. And, and now we’re watching our, decline in front of us. So I don’t think it’s a matter of, doom or books. I think it’s just understanding economic history and watching it repeat itself.

[00:06:39] And you defined it very well in your previous podcast with Nathan that. there’s a magic formula for this and these empires begin with the magic formula and they end with the magic formula or the abandonment of the magic formula. And this cycle, is just constantly repeats itself and we’re watching it play out in front of us.

[00:07:02] It’s not inevitable, but it’s, where we’re going.

[00:07:05] Jonathan Doyle: [00:07:05] so what is it about humans? That, for an example, we have a really beautiful pool here on the front of our house, and often have to go underneath the pool deck to do something with the filter system. And there’s these low beans. And several times I’ve gone under there and just smashed my head into these wooden beams.

[00:07:22] And eventually after doing this enough times, I figured out, you know what, next time I’m going under there, I’m just going to be real careful. I want to ask you, what is it? I asked Nathan this, what is it? What is it about us humans that we just, or not way, but the cabal of central bankers and their enablers globally, what is it that.

[00:07:46] We don’t learn this lesson of history. What I’m interested in that dynamic is it based on the idea that if the most of the population just doesn’t understand the system or the way the world works? For example, how do you explain this forgetfulness?

[00:08:01] Mike Kendall: [00:08:01] I suppose it is a inherit to human behavior in the sense that, we’re not perfect beings. we don’t always learn. We, there is a, a. Element of society that attains power and uses it for purposes other than the benefit of everybody else. And, I don’t know how you, change that human element.

[00:08:22]we’re always trying attempts to restrict that human element or behind a lot of things that happen. I w I would say that’s why cryptocurrency came along. The advent of cryptocurrency is an attempt to create a monetary system that humans can’t screw up. because cryptocurrency it’s mind is CRA cryptography is behind this magical formula.

[00:08:46] It’s, it. You can’t touch it from a human standpoint. And this is a evolution in economics and, and in humans too, it’s a evolution that we do constantly try to get better, but we also keep making mistakes, the same mistakes, but we do progress, if we didn’t, we would still be where we were two centuries ago or three centuries ago.

[00:09:08] So it’s a trial and error, evolutionary process.

[00:09:12]Jonathan Doyle: [00:09:12] you mentioned that I was reading one of your emails today and you made that point about off the backside of these collapses. We do tend to progress. That is another evolution. Is there anything about this current set of circumstances? Whether that means the global connectedness, the, the speed of global connectedness.

[00:09:34] I understand that always would have been global connections in trade going back centuries. But the speed at which markets are connected, the sort of MMT stuff, the technologies we’re using. Do you think this is going to be another case of collapse and evolution? Or is there something bigger about these current set of circumstances?

[00:09:54]Mike Kendall: [00:09:54] in a sense, it’s like social media, when you look at social media, there’s, Positives to it. we can connect with people, we haven’t seen in years, but there’s also negatives. It can be used, negatively to affect how we behave. How do we communicate, how we interact with each other.

[00:10:11]but that’s true of all technology. So we have this huge, leaps in technology that occurring and there’s tremendous upside to it. But on the other side, there’s tremendous downside, and it’s a balance we’re working our way through. We’ve never had social media before we’re working our way through these technological leaps and trying to figure it all out.

[00:10:33]it’s really gonna come down to how we deal with it. Are we going to deal with it, properly? If we do then on the other side of this, with the technology, we can have tremendous, Tremendous growth come out of it on the backside. On the other hand, it can be turned into a totalitarian state quite easily.

[00:10:50] And we’re seeing that happening right now with COVID, there’s the great reset is being broadcast to us and it’s coming on the back of COVID. so you have these pluses and minuses and how we deal with it, is gonna determine how all this comes out. I think.

[00:11:08] Jonathan Doyle: [00:11:08] Yeah, it’s interesting. And it’s, while I have really enjoyed do thoughts book, cause it’s a, quite a scholarly. Exploration of decadence and his take on decadence. Isn’t the way we classically understand it in terms of, headend ism, it’s more societies running out of energy, declining birth rates as part of it.

[00:11:26] But it’s more than that. The cultural project loses its energy and he alludes to what you’ve just mentioned in terms of the technology side. He makes two good points. One is that surprisingly our technology. He, his argument is it hasn’t actually, or it isn’t actually moving that fast. He said, if you look back at the moves in technology around the 1940s, fifties, and sixties, in terms of things like space travel and that sort of stuff, he said back then, people were convinced that we’d all be traveling to Mars on passenger ships very soon, but he makes the point that our technology is actually. Really haven’t increased massively. Like we get a new iPhone every few years, but he makes that point. But the other point he makes is in terms of things, like what you’re saying, the totalitarian impulse, if you look at China’s social credit system, so I’m interested in what happens when central bank digital currencies.

[00:12:17] Merge with a Chinese style social credit system. when the government knows everywhere you’re spending a dollar and a, and can control access to that. So ask you, yeah,

[00:12:29]Mike Kendall: [00:12:29] can I respond to that point? Oh, at that point, I think, you have to look at AI or artificial intelligence. it’s expanding massively. The broadband is expanding massively and it’s enabling the artificial intelligence and the artificial intelligence is creating all the algorithms and all the advances we could see from, autonomous cars, they were unimaginable a year or so ago, but it’s the.

[00:12:53] Capacity of broadband, the artificial intelligence, the algorithms that’s making all that possible. So in that sense, we are seeing tremendous, leaps in technology and it’s occurring very fast. And our artificial intelligence is used everywhere from a revolution, revolutionizing the medical establishment.

[00:13:15] To autonomous vehicles to a totalitarian state. If if that’s where we go. So I would say, I would disagree that, these leaps aren’t happening fast, I would say they’re happening in our current period within the last year or two very fast.

[00:13:30] Jonathan Doyle: [00:13:30] think that the benefits of those technological improvements and things like AI machine learning, are they concentrated in the hands of a few? And what I mean by that is I think the point he’s alluding to is that if you look at things like the steam engine, which was a truly revolutionary breakthrough, and that particular piece of technology created things like railways, which had a massive impact on.

[00:13:56] Commerce and living standards and trade and all this sort of stuff. And that filtered down to the masses. It really impacted in the entire society. Now. Yes, AI is impacting us all. But do you think the benefits are concentrated in the hands of a few, or do you see those technologies is benefiting a large number of people?

[00:14:19]Mike Kendall: [00:14:19] right now they’re, I would say they’re concentrated in a few, Google has the resources and the money and the research to really advance the stuff it’s happening in China, too, that China is advancing in AI, at a, as great a pace as anybody in the world. and. and there’s a sense, we’re looking at a totalitarian system, as you mentioned, social credit score and negative implications for it.

[00:14:46] But, we have the same tech silos in the U S that are consolidating this power here. So it’s hard to see where it all goes, whether it will, if we break up those texts, maybe it will filter throughout the economy and, more to the, entity level and enterprise level.

[00:15:04] Jonathan Doyle: [00:15:04] absolutely. let me ask you now. I want to talk about. Jude Wanniski his work. But I wanted to ask you first, tell us a little bit about how I say this to Nathan of all the things you could have done with your life. Like you’ve had a professional career outside of what we’re talking about, but of all the things you could have done with your time, what led you into this area of interest of macro finance of gold, of what’s the background to the backstory that led you into the space?

[00:15:30] Yes.

[00:15:31]Mike Kendall: [00:15:31] I listened to your, same question you posed. Nathan and I have almost the same answer, although I’m not at the level of Nathan, I haven’t done the research and written the books he has, but it was something that I started learning. And I had this a moment where I, in 2013, I decided I was going to sit down and read, Jubilant Minsky’s archives.

[00:15:51] He has supply-side university, which you’re familiar with. It’s this massive, educational, archive that he created and built over time. And I started reading it and the effort took me well over a year. I don’t even, I can’t even call it. It took me two years, but I went through the entire archive in chronological order.

[00:16:10] And at some point doing that a light bulb just came on. I started. I think I started understanding the world the way Jude, understood it. And it started making sense to me. And I started achieving some clarity on how I could see economic Vince in what’s happening in the world. And as a result of that, I started trying to write a book and it didn’t really get anywhere with it.

[00:16:34] And so then I, I had all these, this. product for my book. And then I got a website and I start and I transitioned it to my website, which I’ve been doing for almost four years now. like Nathan, it’s almost like this isn’t really something I want that, I’d much rather like you got to be out on a bike or playing guitar or whatever, enjoyment I have.

[00:16:59]why am I beating my head at beating my head around writing these pieces and putting out and getting very few views, but it’s progressed, the sense that we’re talking right now shows that it’s making, some different somewhere and, I’ve gotten response.

[00:17:13] Other people have connected with me. And so it’s a beneficial thing. And ultimately, it’s you look around and you see the world and you say, boy, there’s. this shouldn’t be happening. There’s a lot of misery in the world and there’s no reason for it. There’s no purpose. There’s a simple solution to it.

[00:17:30]economic wise, like you’re the magic formula is you talked about there’s this simple solution, but there’s all this misery. And none of it is being explained by academics, by politicians, by economists. And the misery is just a compounding. And the point I’m trying to make is like you see this stuff and you want to make a difference.

[00:17:52] So that’s kinda how it started from me also.

[00:17:55] Jonathan Doyle: [00:17:55] so just on that, Having read Nathan’s magic formula and talked to him last week. And why does it seem that so many economists, just fundamentally disinterested in the supply side? Nathan would say that the vast majority, it just things seems to be such a simple concept.

[00:18:20] Why do you think that the Academy. Is not talking about it or how do you explain that?

[00:18:29]Mike Kendall: [00:18:29] I think there’s various reasons, but I think if you want to. Get to the origination. You go back to the late 18 hundreds. When the economist profession started, coming into being, we didn’t really have the economists, going back to the classical period who wrote all the great books on, economics, w they were all citizen economists, but as a profession, it began in the late 18 hundreds.

[00:18:50] And as increased exponentially. But the idea was that. The economics profession wanted a hard science, the same as mathematics or physics or anything else. And to get a hard science, you needed mathematical equations. and it went from, economics is a behavioral science, it’s incentives is how we respond to incidents as human behavior.

[00:19:15] It’s how we react, but the economist, wanted a hard science and. A formula mathematical formulas, and it’s evolved over the years. and to a certain extent, they’re just, mouthpieces for politicians. they justify what politicians want to do anyway. So the economics profession, acts in the interest, not of the masses of people who want a better life, in my opinion.

[00:19:41] And I’m not saying they’re bad people, I’m just saying, this is the way that. The profession has evolved. They act more in the interest of, as political, opportunities that, they get their grants, they get their money. so it’s the whole economics profession in my view is, a regression.

[00:19:59]we can look at the world around us. Everything is progressing, but economics is regressing. they figured it out back into the 17 hundreds. And we were going backwards. It’s this cycle I’m talking about it. We’re regressing as the whole world advances economics is going backwards. So it is a, a weird concept to try to figure out.

[00:20:22] Jonathan Doyle: [00:20:22] so at the root of it all must be some kind of expediency. And Nathan and I met talked about this. So most of our politicians will have one to two terms, depending on which country you’re in, somewhere between, six to eight years and. Peter Schiff used to say that you don’t go into politics to make money.

[00:20:43] You go into politics to make money after politics. So I don’t want to be overly cynical, but you don’t want to be the politician that introduces austerity, right? Because it seems that these decisions, the hard decisions about deficits, about spending about programs are not taken because. in a term or two, you’re going to be out of there anyway.

[00:21:08] And what does that mean for our wider political economy for our culture in general, when that sort of expediency means no, one’s going to make those hard decisions.

[00:21:19]Mike Kendall: [00:21:19] I th I think that, builds on the cycle you were, we were talking about earlier is, that’s a point that why that cycle progresses and then things start collapsing is because people aren’t willing to make the hard decisions and they build on themselves. But. You know what you learn, from the magic formula.

[00:21:39] Once you start, understand ending how stable money works, how low taxes work is that they can, if they’re adhered to, they can prevent this type of thing, because you can’t have the monetary creation on a gold standard. Say the gold standard is democratic because, gold is meted out by. Earth, it’s preciousness.

[00:22:04]you can’t say, I want production. A goal to go up to 20% is annually is 2%. It’s been that way for centuries. And that’s what defines its value. The fact that it’s production remains stable relative to its total stock, which is 200,000 tons now, and it’s not consumed. So all the gold that ever created is still there.

[00:22:24] And it has this minimal stock flow every year. That’s consistent. You can’t mess with it, you can’t. Even the capital component. it doesn’t have one. So it negates that. So technology advances in technology population don’t increase. Gold production. It remains stable relative to the stock as it has for centuries.

[00:22:45] And that defines its value. So it’s democratic. you can’t mess with it. Okay. But if you take our Fiat’s system, which Jim grant, cause a PhD standard, because it’s what seven or 12 guys at the federal reserve or. Women men and women get together and decide, basically by whim on the economic theory, does your, Whether they’re going to create dollars or how much, or what’s going to happen.

[00:23:11] And that’s elitist, it’s a bunch of elite guys who work for somebody. the federal reserve is a private institution it’s privately owned, whose interest are they representing? And so with a gold, you have a democratic system and it prevents a lot of these, issues that, you’re talking about dealing with because it’s a.

[00:23:32] A system that you can’t mess with?

[00:23:35] Jonathan Doyle: [00:23:35] and is it true that governments don’t like gold because they can’t print it.

[00:23:41]Mike Kendall: [00:23:41] yeah, absolutely. but, it’s a question of, again, of, who’s interested in representing. and as power evolves to the top and what we’re seeing in the U S now is more crony capitalism, versus, real capitalism and people don’t distinguish it. it’s there’s a big push toward socialism in the U S right now.

[00:24:01]we don’t really have capitalism. We have crony capitalism. that’s, just. Benefits the few and the wealthy. And Jude Wanniski, he had a great statement. He said, a good socialism is better than bad capitalism. And so people, if you’re getting screwed by capitalism, you at least get something from socialism.

[00:24:20] So that’s the movement we’re seeing and you have to distinguish what’s happening with capitalism and why it’s happening to understand these other moves like towards socialism on a, in the U S and probably on a global scale, too.

[00:24:35] Jonathan Doyle: [00:24:35] Yeah, I feel lately it’s I feel a little bit. The way you might feel, if you found out you were adopted, I was like in the last sort of 12 months of starting to study this space, I think my whole life had always been like, what is Churchill said that capitalism is the worst system ever invented except for every other one that’s ever been tried?

[00:24:56]I always thought that it was just. The ordained system of quasi perfection, but you start to dig deeper. As you’re saying with the crony capitalism, the evisceration and the middle-class, you start to go, wow. It’s like finding out you’re adopted. Then what you, a lot of the beliefs that you held about how the system operates, you start to see a built on a pretty flimsy basis of evidence. yeah, go

[00:25:21]Mike Kendall: [00:25:21] to understand that you really need to have a model. And this is what I call the whisky and model that I learned for him. That’s a foundation, there’s an economic foundation when you have stable money to find, buy gold. And that’s a big discussion. why does gold work? But let’s just assume we’ll accept that in history, we’ve had gold standards and they worked okay.

[00:25:42]we’ll just make the assumption that gold is stable and value and they work. Okay. So you have a monetary foundation that. Is stable and value and it prevents all these other problems that lead to the chronic capitalism that we’re experiencing because you can’t devalue the currency. prior to 1971, you didn’t have the rotors, you didn’t have interest rate derivatives that all came into being to manage this system, the Fiat system, because interest rates were going all over the place and you had to put risk premium and the contract and derivatives came and they’ve expanded and expanded.

[00:26:17] And, Gilder calls it, the hypertrophy of finance. it’s basically our entire system is based on churning currency rates and stuff to keep some semblance of stability to our system. and, the top people profit off of this. And meanwhile, the bottom people that are trying to produce stuff or, they’re completely messed up by it.

[00:26:42]they can’t get a footing because there’s no foundation for them of stability upon which to start their production and everything.

[00:26:50] Jonathan Doyle: [00:26:50] Yeah, this is what I understood is that as the Cantillon effect, which is that when money is. When currency is created and dumped into the economy, it’s the people closest to that money tap that benefit first. So it’s big corporations it’s but by the time it actually reaches the pockets of the poorest in society inflation’s usually kicked in.

[00:27:12] So whatever benefits there were to currency printing are usually they usually accrue to those mostly connected. To those printing the money in the first place. So I wanted to ask you, can you take us into the winning scheme models? So for those who aren’t familiar, Jude Wanniski wrote the book the way the world works, which is so hard to get I on Amazon yesterday.

[00:27:37] There’s a hardback copy available for $600. I think it’d be great to see. Yeah, I think it’d be great to see someone buy the rights, reprint it and get it out there. Cause you can’t get it on Kindle. And the copy that I managed to get. It arrived in an original format and then just fell apart. So I’m sitting there at my son’s cricket game and it’s windy.

[00:27:57] And I’m trying to read this read Jude’s book and pages are flying everywhere. so Mike, tell us about, you tell us about, his model of the way the world works, help us understand who he was and what he was trying to communicate.

[00:28:11]Mike Kendall: [00:28:11] what you did is, first of all, the guy was quite brilliant. extremely brilliant. he was a political science major, became a reporter, ended up at the wall street journal in the early seventies. With no background in economics, and that’s when the great inflation started.

[00:28:25] And as a economic writer for the editorial page of the wall street journal, he started trying to figure this out and he hooked up with Robert Mondell, Arthur Laffer, Robert Bartley, and other people. And by 1978, he had written his book. Yeah. Which is, national reviews, a hundred best books of all time.

[00:28:43]Interestingly, he was writing his book under Irving crystals, a foundation at the same time, George Gilder was writing wealth and poverty, which also became a bestseller at the time. they were actually in the same, foundation writing their books at the same time. So his book came out in 1978.

[00:29:02] He quit the wall street journal and he started an economic, institutional client consulting firm called Polyconn Nomics. And, it grew from there, but he is a prolific writer, just a tremendous amount of output. And, his, his wife, Patricia has, made it available for everyone under  dot com, the entire archive, everything I used to pay to get, it’s all there right now.

[00:29:28] And so I, like I said, I went through, I read it and I started. getting what he’s talking about. Cause what he did. He w you know, he w he wasn’t locked into classical economics. He read Karl Marx. He, he adapted the good, the things that Mark’s got. He adapted the things that Adam Smith got, That Keynes got. all the economists, going back to the classical economists, even back, to, middle Eastern economist, I probably can’t pronounce his. His name probably, but it had been Khaldoon, a, Muslim person who was running back in the 15 hundreds or something, so he sent that, he distilled all this, he sensitized it into a model. He basically got everything that works properly from all these different people and synthesized it into his own model. And, And it’s basically, at its simplest, it’s what Nathan Lewis has written. It’s the magic formula.

[00:30:21] It’s stable money and low taxes. Okay. But it’s extremely complex in the sense that. what affects stable money? Why does it work? What affects tax in the only closed economy is a world economy. So you can’t just look at what the fed is doing. You can’t just look at tax policy in the U S you got to look all around the world.

[00:30:39] You gotta look at what China’s doing. You gotta look at what Russia, what Europe, Japan. So all of this synthesize into this foundational model, which is able to look at all these different things and understand what’s happening. And the reason. The, the primary reason why this works on the monetary side is because gold is a foundational, monetary.

[00:31:06] A unit of his model and so gold. If you accept that gold is stable and value that its value doesn’t change. Okay. When we look at post 1971, people look at the price of gold has gone up, gone down, whatever. It’s not the, when you look at his model, gold is stable. It hasn’t changed.

[00:31:26] It’s the dollar that goes up that goes down. So gold signals all these errors. That the fed is making. And if you understand this model and you understand the gold signal, you can start seeing what’s happening in the world. And then as your analysis progresses, as you get better at it, you can start distilling all this stuff that’s happening into your model and understand why it’s happening.

[00:31:51] And then on the flip side of that, you have fiscal policy, taxes and everything else. So it’s the same. So let me give you an example. in the seventies we had the high inflation, right? we had chaos all over the world. Every standards of livings were collapsing, the price of oil, everything.

[00:32:05] Alright. So Greenspan came along in the eighties and started to restabilize the price of gold at basically $350 an ounce. It previously had been $35 an ounce on Bretton woods and Brit and Greenspan kept it stable from. About 83 to 2006 when Bernacchi took over. So we had the foundational, semi mostly stable monetary platform under those years.

[00:32:35] And for example, in Jude’s model, you would recognize this. okay. So the way to look at the model is you have stable money in taxes. if the Mo. On the monetary side, if it’s stable, if monetary policy is going away from that stable, if it’s becoming unstable, that things are going to get worse. If monetary policy is moving back towards stable money, economic things are going to get better.

[00:32:58] The same with taxes. If they’re going towards higher taxes, it’s going to get worse. If they’re going. Towards lower taxes, it’s going to get better. So on and the eighties under Greenspan, we had relatively stable money. So that was the beginning. We could start saying, Hey, things are going to get, we’re getting stable money here.

[00:33:16]we have the, we have what in place to have high economic growth. the next thing Reagan cuts taxes, the brackets came down from 70% to 28%, a huge fiscal, incentive for production. And so you take those two elements. You had stable money, the money was moving towards stability.

[00:33:34] You had lower taxes, it was moving towards, fiscal growth. And we had the subsequent explosion and anybody who understood those principles back those in those days in Jude, he. He bought a house when interest rates were at their peak, because he saw that stable money, those rates were going to come down.

[00:33:54] Yeah. And, it’s a foundation for understanding the economic world and it’s very basic in its simplicity, but it’s very complex in its nuances and trying to put everything together. Does that make sense?

[00:34:08] Jonathan Doyle: [00:34:08] felt that trying to rate it on a sort of a, I was reading it and just having to really concentrate on, you need to do that when you’re reading something important. So the area that you’ve got a real expertise in is this concept of the gold price signal. Can you help us understand that better?

[00:34:26] Cause I, I think you’re right. And I’d like to understand it better. I know people listening would, can you give us some insight into how you understand the signaling price of gold?

[00:34:37] Mike Kendall: [00:34:37] Yeah. my view is that, the problems in the world today, the fiscal policy is not that bad ever since Reagan brought down taxes, the world realized that low taxes are better than high taxes. They haven’t gone back up to CapEx because the story rates around the world. And so I concentrate more on the monetary side because I don’t think we can get.

[00:35:00] Where we need to be until we returned to stable money. And, and so the gold signal, like I said, it’s a, it’s the idea that gold is stable and value now for me, it’s not an idea. I’ve. Looked into it. I understand why it’s stable and value for the reasons I stated before that it negates a, technical, logical Vance’s population of answers and it’s it start to flow and, and the negation of capital.

[00:35:26] Component in other words, to make this clearer, like in the old days, Placer gold, you’d go to a stream with a pan. You’d find gold right in the stream. Okay. It was that available as time goes by, as population increase that gold disappears and then you have to start digging. Then you have to have mines.

[00:35:44] Now we have tunnel bores that go deep into the earth. We have satellite imagery, we have all kinds of geographical. systems that can look into the ground and find, expedite the finding of gold and drilling. So all these advances have not increased gold production at all. Okay. That is how gold negates a capital component.

[00:36:06] You could throw money at all this. Technology, but it doesn’t change the production of gold and that’s why it remains stable and value. And that’s a unique concept. I came across a really digging into the weeds on all of this that I would say most people don’t grasp.

[00:36:26]Jonathan Doyle: [00:36:26] that’s truly fascinating as I listened to you, I haven’t heard it explained like that. So to summarize your, you talk about golden negating population growth and technological advancement. Your thesis is surely. If we were able to throw exponential new amounts of technology and capital at gold exploration, we would see a corresponding rise in gold flow, but you’re saying there’s something truly unique about gold that no matter how much we throw at it, it still seems to yield pretty much the same stock flow.

[00:37:02] Mike Kendall: [00:37:02] Yeah, not only that, but the way the gold mining works, when the price of gold, there’s a cutoff in gold mining, a grade that’s profitable or unprofitable, the greatest, how many grams of gold per ton of, or that they can extract from the earth. So there’s a cutoff grade.

[00:37:19] So what happens when the price of gold goes up? They go to the lower grades because they then become profitable at a lower price. Those grades aren’t profitable and they have to go to the higher grades, for profitability. So this all works, in the same favor of negating a capital component.

[00:37:37] Like I was talking about before the way the mining industry is very unique in the sense that, The price of gold determines the grade and how much gold gets mined and where it gets mine and how gold miners approach their mining. So grades of gold that may not have been mined in 2015, when the price of gold fell, down to 11, 10 50.

[00:37:58] Announce now become very profitable at, 1800 announced. So they shift the mining into these mines and they don’t mind the higher grades. And that also regulates the production in the same way. And so when you combine this with all the Gold’s properties, gold, natural properties are all monetary, everything about gold, it’s limited industrial use.

[00:38:22] It’s preciousness it doesn’t corrode. It’s malleable. it’s, there’s not much, industrial use for it. And it’s not consumed, it’s the only, commodity that it’s not consumed. That’s why all the gold that’s ever existed is still there. So all of these properties lend to its monetary properties.

[00:38:40] But what I was talking about previously is what defines its value and people cannot comprehend why gold has value. that’s always a big question. Whenever you talk to anyone about gold, is it based on trust? It’s just a shiny rock. It has no value whatsoever, but. I submit from the discussion we just had.

[00:38:58] There absolutely are reasons why gold has values and they’re almost providential. why is it that gold is found on every continent that it’s supply is very limited and that it negates, capital components and technological improvement. It’s almost, divine inspiration. I would say, if you wanted to go that direction.

[00:39:20]Jonathan Doyle: [00:39:20] yeah, I remember recently hearing Warren buffet likes to call it a pet rock, but then he just bought a massive stake in Barrick gold. But, I’m pretty sure he sold that off. I remember tracking something recently where they were trying to figure out what his move was because he bought a big steak, but then I think he’s actually a lot of it’s a lot of it’s been

[00:39:39]Mike Kendall: [00:39:39] the interesting thing about Warren buffet was his father was a huge coal proponent, And Warren, my belief is Warren understands gold, but it’s like an act for him,

[00:39:48] Jonathan Doyle: [00:39:48] okay.

[00:39:49]Mike Kendall: [00:39:49] for whatever reasons, but the guys no dummy. And, the things I just talked about, you can’t ignore Gold’s history.

[00:39:56]and my view is just an act on his part.

[00:39:59] Jonathan Doyle: [00:39:59] So to jump ahead a little bit. You take us to your thoughts on the crypto gold sort of relationship, because did I read you right recently when you were saying that crypto is going to work, they just haven’t figured it out yet. Or do you think that ultimately we will see gold returned to its cultural dominance?

[00:40:27]Mike Kendall: [00:40:27] when you look at the Genesis of cryptocurrency, it’s always related to gold, and anytime crypto people are talking about cryptocurrency there, they related or talk about in terms of gold. and really, if you want to look at how this came about, you can go back to Austrian economics.

[00:40:47]and Murray Rothbard, you said you were reading a book of his and the idea Mary Rothberg had the idea that he wanted a gold standard free from human interference. Basically that gold standard that would run on autopilot that, humans couldn’t mess up because he looked around the world and saw that we had gold standards and eventually they fall apart.

[00:41:07] And the reason they fall about is because they have to be managed by humans. And his idea was a hundred percent reserves, all money has to be backed by gold, but that, that’s ridiculous. there’s not an, there’s not enough goal to act as a currency and you can’t expand it to meet economic needs, but cryptocurrency evolved from this same idea.

[00:41:29] Cryptocurrency is an idea. That a new monetary system that politicians economists nobody can mess with, because it works on the same automatic system. And so there’s this huge correlation with the evolution of cryptocurrency, as it relates to gold. And the idea that we want to create a system that is free from human interference and that will work on its own and cryptocurrency does, but.

[00:42:00] If gold, if you have a 2.5% increase in production every year, cryptocurrencies basically, it’s fixed, Bitcoin has its 21 million units and there, I don’t know what percent over 80% there right now, and that, 120 years for the next 15% or whatever. So it’s basically fixed in value.

[00:42:21] And, I have this little Quip I came up with, You can put crypto in front of currency, but it doesn’t change the history of money, just because you add cryptocurrency, you don’t suddenly get a new monetary system. Money works away. It’s always work. And there has never been a fixed supply of money anywhere in the world, in history of economics or any country.

[00:42:44] It’s it makes no sense. You simply can’t have a fixed supply of currency that can’t meet the expansion of. Economic growth.

[00:42:55] Jonathan Doyle: [00:42:55] so I was. Hearing this week that there’s nothing to stop the inner sanctum of the blockchain guys just rewriting the code for Bitcoin and saying, Hey, we were just joking about the 21 million thing, guess what? And keep going. Would that change much if they developed a model for increasing supply

[00:43:20]Mike Kendall: [00:43:20] yeah, absolutely. the thing with a cryptocurrency is there’s two elements to it. One is the blockchain, the other is the currency again, and they both have to work for the other to work. In other words, the blockchain is there as a ledger for economic transactions. that’s submitted into perpetuity once they’re on the blockchain, but nobody’s using cryptocurrency for anything other than speculation, really, or maybe some money transfer.

[00:43:53]so there’s this disconnect between the promise of cryptocurrency. And the blockchain and what’s actually happening in the reason is because of this flaw, this fixed supply flaw. So yeah, absolutely. take Craig. in my view, he said, Toshi, he came up, he created a Bitcoin and then moved on to his Bitcoin Satoshi vision.

[00:44:15]he’s got, scalability, unlimited block sizes, all the things to make this happen. Except people need to use it. For the transaction of goods and services, who’s going to go out and buy a Starbucks with their Bitcoin when it just went from, in the course of six months, from $6,000 to $18,000, that’s ridiculous.

[00:44:36]and now they’re, they’re saying it’s going to go to 50, a hundred thousand, whatever. So nobody’s ever going to use it for anything. So it’s never going to achieve it’s perfect. The blockchain is never going to take off as a decentralized. Ledger that the promise of a Bitcoin created, when it started with this and that’s not going to happen until at some point, either think lapses or somebody comes along and says, Hey, this isn’t working.

[00:45:02] How do we fix it? And, honestly, I think I know how it could be fixed.

[00:45:06] Jonathan Doyle: [00:45:06] So Peter Schiff sees, Bitcoin as a massive Ponzi scheme, tulip speculation bubble disaster. He’s got a video on YouTube, which is quite funny. it’s an old Sesame street scene where lefty the, the kind of sneaky criminal character in Sesame street is trying to put one over on, on Ernie. And he’s got, he’s trying to sell them a box of air, but every time he goes, I’m going to sell you this.

[00:45:34] They do an overdub of the voice and it changes it to Bitcoin. So he’s trying to sell him Bitcoin as this box of air. I can’t see how it’s a store of value. And as a payment rail, it’s a disaster. the new, the, all the old coins are much faster payment rails, and I’m pretty sure it’s the Swift network had a massive upgrade in the last year or two.

[00:45:55] And it’s just much faster. So I don’t see how it’s a store of value. I don’t see how it’s an effective payment rail. And the question I really wanted to ask you is I cannot see how central banks and. The BIS and all these guys are going to allow a private competitor to, to basically cut their lunch.

[00:46:15]there’s surely going to just take the crypto space themselves. 

[00:46:17] Mike Kendall: [00:46:17] Yeah, I think, what’s happening right now. As far as governments are concerned, is it first of all, cryptocurrency as a proxy or as a proxy for all cryptocurrencies, just say Bitcoin, because there’s actually thousands of these cryptocurrencies, but a Bitcoin is not a threat to any national currency because nobody uses it for anything.

[00:46:41] So it’s not threatening the government. They have no problem with it. Really. the second thing is that. If governments want to go to digital cashless societies based on a, national central bank cryptocurrency or whatever, they come up with. The crypto space now is providing the technology, it’s advancing it.

[00:47:02] All the progress in technology is coming through the private. Space and not, they’ll just, adopt that technology for their own use. And third of all, it’s a, it’s a tax revenue, gainer for countries. So as long as it’s a speculative asset that, they can find in tax, then they got the benefits.

[00:47:22] So basically cryptocurrency cryptocurrencies exists now is just not a threat. it’s really a benefit to government. So they have, I don’t think they. Hey, they probably don’t understand it that well, or they’re just beginning to, and B it’s not threatening them. So I think they’re satisfied to leave it alone for right now.

[00:47:40] And.

[00:47:41] Jonathan Doyle: [00:47:41] I heard some stuff during the week that they’re okay. Like you say, to leave it alone, as long as they can get their cut on the on-ramps and off-ramps right. As long as they can, can take it some kind of tax cut when people onboarding or off-boarding that, their crypto, 

[00:47:55] Mike Kendall: [00:47:55] there’s one other aspect to it is that, like Bitcoin really to shut it down. you can hurt it. You could talk to it, but it’s. It’s a, you’d have to shut down the internet to get rid of it. if you’ve shut it down in the U S it can go to China, or it can go to Russia or, I don’t see the whole world shutting it down.

[00:48:15]so there’s limits to what government can do to it. 

[00:48:19] Jonathan Doyle: [00:48:19] liked originally its original promise of anonymity because I, I did the Oxford business school crypto economics program. And, but as I went further down there, I just realized that. The anonymity. Stuff’s really not there. Like when I bought some Bitcoin, which I’ve sold that position, but I was stunned like to the amount of KYC stuff that I had to do.

[00:48:45]you actually have to stand there with your phone and your driver’s license or your passport and photograph yourself, and then upload that. And I’m not saying. that’s necessarily a bad thing, but I was this idea that you had these anonymous addresses and that you had some freedom from government.

[00:49:01] I don’t think that’s being borne out from what I’ve seen

[00:49:03]Mike Kendall: [00:49:03] no, it’s always been tsunamis and people didn’t understand that in the beginning. And that’s what happened with silk road is that, it became a marketplace for illegal goods and drugs. And, but everybody who made a transaction on Bitcoin it’s linked to an IP address. you have a crypto graphic, a public key that identifies you, but it’s linked to your IP address.

[00:49:24] So anytime that big kind moves, you can trace it from one IP address to another. And it’s and plus it’s in the blockchain forever,

[00:49:33]Jonathan Doyle: [00:49:33] I

[00:49:33] Mike Kendall: [00:49:33] so yeah.

[00:49:34] Jonathan Doyle: [00:49:34] you said at the start, which resonated with me, you talked about fact that the fact that trees don’t grow to the sky, There seems to be these embedded laws in the cosmological order, the structure of reality. I want to talk with you a little bit on about MMT.

[00:49:50] I like to think that if a 10 year old. Sees some logical flaws with the position. It probably has some logical floors cause my kids and I have been watching Mike Maloney’s original series, a hidden secrets of money, which is, I really enjoyed watching with them and. They get this idea that you can’t magically create money out of nowhere.

[00:50:12] My kids are like, but we can’t do that. None of my daughters actually said that to me during the week she goes, but we just can’t print money. I said, no, we can’t. So if a tree can’t grow to the sky of the certain laws to the structure of reality, What is happening with this MMT? what takes us to what you think is going to happen?

[00:50:34] If you just magically keep increasing the currency supply?

[00:50:39]Mike Kendall: [00:50:39] and this, when Minsky had model, I talked about, you can explain it and, but you have to understand the gold signal. You have to understand how the fed works and there’s sort of two demarcation lines. I would say with our economic and the recent pass, the first one goes back to 1971.

[00:50:57] With the, closure of Bretton woods ending at the gold standard, the introduction of a global field system. And the second demarcation line is 2008, the great financial crisis, because, and after that is it fed completely changed how they’ve been operating from their inception in 1913, up to 2008, all of a sudden quantitative easing came into being interests on eggs.

[00:51:22]interest on reserves was passed by law of Congress and act of Congress that allowed the fed to pay interest on reserves. And that changed the entire. Function of how the fit previously worked. And most people miss that demarcation line or that change, they didn’t understand it. All they saw was the fed increasing it’s a balance sheet from eight, 800 billion at 2008 to 4.7 billion up until about two, 2019.

[00:51:52] And then they started normalizing, reducing it a little bit, but so they saw this tremendous increase in the Fed’s balance sheet. And they didn’t see the inflation coming. they w wait a minute, the fed can almost increase its balance sheet, unlimited, create unlimited dollars, and we’re not seeing the inflation.

[00:52:11] So that basically justified an idea of MMT. And it took off from there. MMT didn’t really exist prior to 2008. It’s it may have existed in certain, theoretical circles of monetary, Discussion, but it didn’t exist as a practical application and it’s coming into now. And the reason it’s coming into is because of this idea.

[00:52:34] That seems to be born out in front of us day by day. the Fed’s balance sheet is over 7 trillion right now. since COVID, it’s increased almost $2 trillion in a year, and there seems to be no repercussion for it on the economic front, as far as inflation and everything else. So in my view, that’s the idea where this came from.

[00:52:55] If we were on a gold standard, nobody would think about M and T it would have. It would have no purpose. It would just be a crazy, ridiculous idea. There’d be no point to it. NMT is another function of understanding the monetary world and, what’s happening. And again, I would attribute that to this base model that I, I learned and talked about.

[00:53:16] Jonathan Doyle: [00:53:16] I liked, when you talked about the fed changing its modus operandi so dramatically in 2008, and I was riding this morning, I was on the bike, listening to a long interview and somebody quoted Milton Friedman who famously said, there’s nothing more permanent than a temporary government program.

[00:53:32]I liked that quote. No, it was quite good that, 

[00:53:35] Mike Kendall: [00:53:35] exactly, 2008, as soon as they started quantitative easing, they immediately began to talk about normalization, meaning bring. get rid of the excess reserves, 2.7 trillion later, they finally started normalizing, but now we’re up to over 3 trillion. So you’re right. Once you start something, it spirals on itself, they tried normalization and things started collapsing in 2018.

[00:53:57]because the system is now based on this creation of. More and more dollars to keep everything going, and like you say, it

[00:54:10] Jonathan Doyle: [00:54:10] this is what I’m getting back with your tree analogy. Like how do you magically create something at a keystroke that has such power and influence in a society and it not eventually. It just seems to be subverting. And Nathan said this, the kind of the quantum order of reality, like you just can’t, only God seems to have got the one option of creation from nothing, right?

[00:54:34] Like where does it, where are we going?

[00:54:37]Mike Kendall: [00:54:37] I think, it’s just like people inherently understand the value of gold, and in times of turmoil and chaos, they want to hold gold. people in there, you understand also that this economic Fiat economic system that is increasing debt to unsustainable level, can’t go on forever, In the meantime, you don’t want to miss a party.

[00:54:58]so it goes on, but think about the Soviet union, it was a command economy, millions of people in prison, but that lasted 70 years before it finally collapsed. So these things can go on for economic distortion, capital, misallocation. it can go on for a very long time.

[00:55:15] Jonathan Doyle: [00:55:15] Yeah, this was a, again, going back to Duke that’s book, the decadence society was interesting because in the closing chapters intuitively we think it leads to a. an ancient Roman cultural collapse, but he was making the point that actually decadent cultures can limp on for pretty long period of time.

[00:55:34]Mike Kendall: [00:55:34] there’s an interesting aspect that there’s a social component to, Monetary turmoil. And, there’s a book Adam Ferguson, when money dies about, why Mr. Jeremy, the hyper inflation and it talked about Versailles and all the things that led to the hyperinflation in what went on. But the interesting part was the social ramifications of that, because see, there’s, a bond of trust, the.

[00:55:58] Between the citizens of government, which is stable money. Meaning if I go out and earn work for a dollars worth of wages, that dollar should be worth a dollar. If the government comes along and devalue it, and it’s only worth 50 cents, then the government is breaking that bond. And then the reciprocation by people is that, wait a minute, if you’re cheating me, what do I owe you?

[00:56:19] The government? So there’s a social unraveling that starts occurring through these, devaluations and. And we’re seeing that happening, parallel to all the economic issues that are going on. We’re having, there’s a social unraveling in American and it’s going to get worse as this continues to get worse because, When people lose trust in the government, and now we have election fraud.

[00:56:42]if this doesn’t get sorted out, what’s the point of even voting if, if we can’t believe that the election system works, honestly. So all these things are compounding on each other, the social fabric, the economic, disintegration, and, the chronic capitalism, the rich getting richer, the bridge between the rich and poor and.

[00:57:04] If you look at, deep into the great reset, this is the foundation for what they want, and this is you could say, this is a plan. that’s what the reset is. We’re going to blow this thing up and reset it. there’s a lot of things going on that right now that are.

[00:57:21] Interesting. they’re not pleasant, but they’re interesting to look at as you somebody who studies history and economics.

[00:57:29] Jonathan Doyle: [00:57:29] seems to be a cadence to it at the moment, a pace at which things are moving. my wife, Karen and I talk about that a lot. That just seems to be a cadence to it. Like the, I said to her yesterday that there’s a pretty good chance that cash could disappear really quickly here in Australia.

[00:57:47] I just, you’re seeing less and less of it. And as soon as COVID happened, there was signs everywhere saying, we prefer not to handle cash. We don’t want cash because of COVID. But. There just seems to be, a cadence to the speed at which things are moving that, can you, is

[00:58:05] Mike Kendall: [00:58:05] w they seem to keep it controlled in the sense that it’s not spiraling out of control. it’s a steady degregation and it happens over time and over a decade, you don’t notice it as much. As much, but there will come a point where it will spiral out of control and then, everything will fall apart.

[00:58:23] But, as long as they keep it controlled, they can keep this going. as long as the idea that this is losing control would. one of the primary signals would be the goals. They know what the price of gold started going up 3000, $4,005,000. every advance in the price of gold is an indication that the fed is devaluing the dollar and things, and the monetary chaos is getting worse.

[00:58:45] well, 

[00:58:45] Jonathan Doyle: [00:58:45] poke some holes in this strategy because I had talked about this last week. Like I’ve gone hard on physical gold and silver and some gold ETFs. I started selling equity positions. I got the last few more last few weeks and got it. Didn’t time it perfectly for sure. I still. Check the numbers each day and have a small edge to cry as I keep seeing the equity bubbles expand.

[00:59:11] But can my strategy at the moment is hard on precious metals and a cash position. Should there be a solid correction? can you poke holes in that? What would you be saying to people at the moment? Would you be making a case for owning physical, precious metals?

[00:59:28] Mike Kendall: [00:59:28] Yeah, absolutely. I understand gold and that’s what I’ve been investing in, mainly, but there’s an odd, dichotomy to this model I’ve been talking about and the sense that if you can see things clearly, like you could see, wait a minute, this isn’t gonna be sustainable. on the investment side, In my case, I invested in gold, but I used to be on the technology side, but I pulled it out of it, so I don’t think there’s a correlation and I sent you an email on there’s a correlation between understanding economic model investing. That’s a completely different animal. you can have no understanding of. The macro world, but you can have very good street, smart investment instincts. you have the cold blood to know when to pull the trigger when to get out, when to get in and it’s instinctual and, and those people can do very well without any knowledge base whatsoever of what’s happening in the world or why.

[01:00:26] So it’s hard to give investment advice. when you could say. yeah, this thing’s not going to last, but how long before it doesn’t last, and what am I going to miss out in the interim? and my view, since 2015, when I figured out what was happening goal was to pretty much stick with gold and, in the long run, it’s going to go up, there’s going to be, as there always ups and downs, but they’re not gonna.

[01:00:51] Be able to correct the system. The interesting point is what’s going to be happening if they do go to this digital cashless society, I would have to read how they intend to do that, but. That’s a tremendous upheaval and the global monetary system to get rid of cash. Cause there’s like a, I don’t know, 1.8 trillion of us dollars in circulation around the world.

[01:01:13]what happens to that? And how does it just disappear? How do they get control of that? But I think that’s still pretty far in the future, in my opinion.

[01:01:22] Jonathan Doyle: [01:01:22] I was, I’m trying to get my head around. What happens if we get CBD seas to the banking sector, if the fed can just go around the banking system. And give money to people directly. what’s the impact of that for the banking system. And that got me

[01:01:41]Mike Kendall: [01:01:41] that’s part of the great reset, universal, basic income that. In return for getting you universal, basic income, you’ll give up your property or your private ownership of property or whatever. whether those things will ever come to pass. I’m very doubtful because I think people will stand up and say, no, we’re not going there, but that’s what they’re talking about.

[01:02:03] And that’s, where things are headed right now.

[01:02:05] Jonathan Doyle: [01:02:05] your gut feeling? Mike, do you see us at some point in this historical moment? there’s this epoch of whatever timeframe of the next decades. Do you see us back on a gold standard at some 

[01:02:18] Mike Kendall: [01:02:18] point?

[01:02:21] Yeah, I think, I think so. I think, a template for is why Mar Germany, there. I forget his name. I can’t say it off the top of my head, but the guy in charge of their money after why Mark labs worked from like a janitor’s closet with a telephone by himself. And re-establish a gold standard, Overnight basically.

[01:02:44]and all the production that had gone into a hiding because nobody would bring their producer commodities to market when the money was worthless, all of a sudden started reappearing. they went from desperation, complete collapse, desperation overnight to, return to economic growth and basic necessities.

[01:03:07]do we have to go through the same crisis here? I don’t think so. one of the interesting things right now is Judy Shelton is, nominated for a fed position. Now she’s a big gold proponent. She understands it completely. She’s written books on it. And, maybe there’s a reason for that.

[01:03:22]maybe. I don’t know whether she’ll get confirmed or not, but maybe there’s a reason she’s being put up for that. And hopefully she’ll be confirmed and that’ll add an institutional knowledge based or a federal reserve. And who knows where it might go from there.

[01:03:35] Jonathan Doyle: [01:03:35] don’t you think that the, when you look at the power of the devil CIT BIS world bank, all of the significant players, and you wrote about this really well on your blog, which we’re going to link to, but I struggled to see how they let this correct. this is the nature of the great reset, right?

[01:03:54]they’re hoping to rebuild it in their own image, but they seem so entrenched and so powerful. I don’t see what forces are really a raid against them other than civilizational unrest at some point.

[01:04:10]Mike Kendall: [01:04:10] that’s it, the populace at some point is going to have to figure it out and, truthfully. I didn’t look into this until COVID came along. I, for me, COVID, didn’t make any sense how the heck is this happening all over the world? Nothing makes sense. There’s zero things that make sense, but yet it’s happening all over the entire world.

[01:04:28] And that was a wake up call for me. I’m writing about it. Other people are writing about it. other people are figuring it out. And The populace is going to have to stand up to stop that’s the only stop. This that’s the only way it’s going to happen. And I, yeah, revolutions happen, things change, only takes one person with an idea that other people, grandpa to change the world, for example, your, my website is met on the margin, but you’re the man on the margin.

[01:04:55] You starting this supply side podcast, nobody’s ever done it before. You’re going to add greatly to the library. you can change the world just through this, podcast. It could get picked up by somebody influential. It could affect a politician books, that’s the way things happen.

[01:05:09] Jonathan Doyle: [01:05:09] Yeah, I keep thinking to myself, I keep asking myself this one question. I’m like, how did I get here? I’m like, I’m talking to Mike today and I like talking to you and I’m like, Hey, this happened. It’s it’s interesting the connections and, this, because COVID affected my ability to travel and all that stuff.

[01:05:26] And, I just started reading and I’m like, you don’t want to turn into that. road to Damascus, living in your basement, convert. That’s seeing the great reset in every corner of reality. But yeah, I think there’s a strong sense for me of, this system is very skewed to privileging a very small number of people.

[01:05:46] And when I read Nathan’s the magic formula in those early chapters, he’s making a strong link between. The magic formula and the moral nature of a culture. So if you have low taxes and stable money, you tend to get much better, social cohesion, less poverty, less social dysfunction, and violence.

[01:06:11] And for the first time, I thought I really saw the link between economics political economy and human flourishing. So I’m hoping we can get back there without too much civilizational suffering.

[01:06:24] Mike Kendall: [01:06:24] Yeah, like I mentioned before, the, The greatest bond between government system, government and its people is stable money, And once you break that bond, society phrase, and you’re right, you’re absolutely right. We’re seeing all that happen and it’s distressing and it’s hard to be optimistic about the future because this has gone quite far right now, the fed with a $7 trillion, balance sheet.

[01:06:48] In the space of one decade, which is, a seven times increase and growing next year, I assume they’re going to, monetize the entire depth issue. That’s a 3.5 trillion, so it’s only gonna get worse. So the further it gets out there, the harder it is to correct, without. disaster happening, but I think there are solutions.

[01:07:10] I think there are people that, understand the solutions and, Reagan came along when people had just about given up on the world, inflation, chaos, everywhere, standards of living collapse. And. and he turned it turned around, almost overnight, as soon as he got the tax cuts and the Greenspan stable money.

[01:07:29]that potential is still there and it can happen.

[01:07:32] Jonathan Doyle: [01:07:32] stops the fed, just riding it off their balance sheet. Like they’re monetizing the debt, but what stops them from just.

[01:07:38]Mike Kendall: [01:07:38] I mean that eventually that’s, the, wire Mar solution, it just collapses and, there’s no value to it. And everybody’s white town. but what stops them from doing it is they can’t do it unless somebody is wiped out. And if they wiped them out and make them hold, they’re just going to increase, they’re going to monetize everything.

[01:07:56] They just wiped out. So there’s no, you can’t wipe somebody out. And, in our non austerity a world without, Without funding them to keep them going. that’s what I had in 2008, the banks all collapsed basically. And the fed came along and just, pumped into the money and got them going again, instead of letting things fill in.

[01:08:18] And so we’re at that point now where they, it starts building on itself. You just have to keep it going because there’s no other, there’s no other solution other than to keep it going.

[01:08:27]Jonathan Doyle: [01:08:27] let me ask you something just on that related back to that sort of naturalist analogy we’ve been discussing about, a tree not growing to the sky back in 2008, when the banks were too big to fail, like the naturalist argument for me was often like a storm going through a forest, like when a big storm.

[01:08:45] Goes through a forest. It takes out all the dead wood. Anything that isn’t strong and grounded is exposed and destroyed or damaged. So do you think back in 2008,  just should have been allowed to do what they would have naturally done or do you think it was necessary to prop those banks up to stop more suffering for more people?

[01:09:10]Mike Kendall: [01:09:10] I think, eventually. A lot of the banks should have been allowed to fail, not to the point that it causes system systemic collapse of the entire global economy, but, why did all this happen in the Clint years, they, got rid of Glass-Steagall, which put it separated, commercial banking and investment banking.

[01:09:28]and so there’s a lot of things that led all to this and it was the. Absence of stable money, interest rates, increasing and people buying their homes and all this stuff that led to it. So would you, when you look at a solution, you can’t just say, Oh, we can’t let them fail or we can’t let them fail.

[01:09:47] You have to understand what caused it. And then if you’re going to let somebody fail, you have to come in and repair what’s causing the damage, the economic damage and this never gets looked into because we’re on this Fiat’s system and nobody, understands or believes in stable money really based on gold or few do.

[01:10:08] And so th so you can’t have. You can’t create the necessary repair unless you understand the system that can repair it, so just to let it fail, have all these people, hurt and then go on with the same system. Doesn’t make any sense, but to keep the system going as it is for another decade, like we’re at now, it makes it worse too.

[01:10:31] Jonathan Doyle: [01:10:31] we’re just delaying the pain.

[01:10:35]Mike Kendall: [01:10:35] yeah, we’re kicking the, can kicking the can down the road every day, this politician and that politician, the next politician, this president, they’re all kicking the can.

[01:10:45] Jonathan Doyle: [01:10:45] I don’t want to have an overly cynical view of our politicians. Cause I know there’s many good men and women who do enter public life hoping to be agents for positive influence. But it just seems that the structure now, like I said before, is that you don’t want to be the person who breaks the bad news.

[01:11:06] You don’t want to be that politician going. I was thinking today after riding that the social program set up, in the U S in the 20th century, I remember reading in Nathan’s book that in, I think it was nine 44, 1943, there was 44 us workers for every retiree. Now you can build, a pension system on those kinds of numbers, right? But today it’s I think it’s are the three or two us workers to every retiree. You can’t fund it. It’s it’s almost as if the political promises we made 50 to 70 years ago just can’t be sustained by a current economic reality. 

[01:11:45] Mike Kendall: [01:11:45] Yeah. would you, when you look at that, whether it’s wage growth or supporting social security or whatever it is, there’s an interesting thing you can look at. You can look at a graph of any major economic event and go to 1971. And that’s when things start going haywire. That’s when the wage growth started declining.

[01:12:04] That’s when standards live, that’s when the price of oil shot up pretty much every economic indicator. That means anything. started going haywire in 1971. And, but nobody, or, politicians economists, they can’t make the connection. they can’t make the connection with stable. A lot of people can, but.

[01:12:25]our economic profession can’t they can’t make that connection with stable money. So when we talk about, 44 people, there’s a natural evolution, 44 people supporting each a retiree. There’s a natural evolution with technological product, progress that, it takes less and less people who support one because we’ve become more productive, technologically.

[01:12:47]so that’s not that big of a worry when you have a stable economic foundation to build on. All that on, but when things go haywire, like 1971, then they all come to the surface and it’s a huge problem. And it’s, it’s part of the collapse because they’re not going to be able to maintain the social net that they promised the pensions, all that kind of stuff.

[01:13:09] At some point, the only way to keep it going is to create more money to pay for it, which elevates the pro this is the spiral that Walmart, Germany got in

[01:13:18] Jonathan Doyle: [01:13:18] why do you think we’re not seeing inflation at the moment?

[01:13:22] Mike Kendall: [01:13:22] Because it goes to the demarcation. First of all, I think we are seeing inflation, but it’s subtle. And I determine inflation by the, gold signal. I w look at the spot price of gold, but there’s also an optimum price of gold, which defines the price level. And you have to understand that.

[01:13:40] And you can see where the spot price of gold is in relation to optimum price of gold, which is around optimism around $1,400 now. there is some inflationary effects out there, but it’s being curtailed. This demarcation. And I talked about in 2008 when the fed started paying interest on reserves, because what happens is it creates the, in the seventies, every dollar excess dollar, the fed created, went out into.

[01:14:06]peoples went out into the world and people didn’t want to hold that dollars because it was coming less worthless. And the more the fed created above what people wanted to hold the greater, the inflation and it got worse and worse. what we’re seeing after 2008 is the fed creates these dollars, but they go into depository accounts, fed depository accounts of the, Institutions the two big to Phil’s.

[01:14:31] So basically what the fed is doing is it’s going out, buying bonds, driving interest rates to the zero balance. And, with zero interest rates is causing all this misallocation of capital because some entity that should be bankrupt now has access to unlimited cap capital because there’s no cost to it.

[01:14:51]So this. Misallocation causes all these economic distortions. But the reason it works is because this excess money goes into excess reserves that the fed then turns around and pays interest on to these banks. So they have an incentive to hold it. So unlike the seventies where all those excess dollars, were resulting inflation, the fed since 2008, with its quantitative easing excess reserves interest on reserves has changed the system.

[01:15:20] That does that excess money is not getting into the economy either through, cash or through loans into the economy. so that’s what people are missing, that’s what the people are missing when they look at the Fed’s huge balance sheet. Yeah. It’s got a huge balance sheet, but also look at the excess reserves.

[01:15:36] If there’s a four, 4.5 trillion fed balance sheet, but 2.7 trillion of excess reserves, then that difference, What is that a $2 trillion difference is just a natural extension of the Fed’s balance sheet from 2008.

[01:15:55] Jonathan Doyle: [01:15:55] so in summary,

[01:15:56] Mike Kendall: [01:15:56] And with the inflation that we’ve had with the change in GoPro. See it when this happened 2008, the price of gold was $1,000.

[01:16:03] Right now, it had moved up from three 50 where it stabilized under Greenspan up until about 2004 or something, or 2005. And then with the financial crisis, gold fell to about 700. it went up to 1900, and so what happened was everybody was looking at this dollar creation, the fed dollar creation after 2008, they were saying, this is a repeat of, the seventies, a dollar creation, inflation that go together.

[01:16:32] The price of gold is going up. That’s what happened in the seventies. It went from 50 up to eight 50. And, this happened up until 2011. And then all of a sudden the price that goes started collapsing, my theory and I’ve written about this and I have to find it on my website is that they finally realized these excess reserves are getting locked out of the economy, this extra, monetary creation.

[01:16:56] And it can support a gold price of, $1,900 because it’s. Different than the seventies it’s being locked out of the economy and the price of gold started falling and it fell down almost it fell down exactly to the equilibrium point between what the optimum price of gold was, until it intersected with the spot price of gold, which was $1,100 in July of 2015.

[01:17:18] Now, does that make any sense to you? I’m curious because that’s a, I’ve had these discussions with other. Supply side friends and, they agreed to some point they don’t all agree a lot. I don’t think most even understand what I’m saying. I’m just curious if you understood what I was saying or.

[01:17:34] Jonathan Doyle: [01:17:34] take on it is that banks have realized under this current system that they make more money by leaving these funds. with the fed get interest on reserves rather than that money actually going out and finding productive places in the economy to be used.

[01:17:53]Mike Kendall: [01:17:53] yeah, there was, one of, there was a scar tissue from the 2008 financial crisis, they had to recover and the excess reserves did have helped them recover. But the next thing that came along with all of these regulations, I can’t off the top of my head. I can’t list them all, but all these capital requirements and.

[01:18:10]that didn’t exist before. Bazell three, all these different, requirements that they had to maintain about. balance sheet to satisfy certain requirements, which required a tremendous amount of capital to be held. So we’re seeing that now, the fact that the fed has a $7 trillion balance sheet, but these depository institutions too big to fail is they’re under all these capital requirements that, forced them to hold vast sums of excess reserves to meet them.

[01:18:41] And the other thing is. there’s no real economy to go out and long into. we don’t have a dynamic. In fact, we have the opposite of a dynamic economy. what we do have is we have extremely low interest rates. We have almost zero cost of capital and that’s, keeping everything going right now.

[01:19:00] Jonathan Doyle: [01:19:00] so there’s almost two separate economies. There’s a financial economy with everything that takes place between the fed and the big banks. And then there’s what. We would have called the real economy. Which is laboring under historically unusual conditions right now.

[01:19:14] Mike Kendall: [01:19:14] exactly. And that’s the big divide. That’s the inequality issue that everybody talks about, but the salute, the solution, For most people or economist or whoever when they talk about this chasm between those with the money is to tax taxes, raise tax rates. instead of looking at all the negative aspects that are causing this, problem.

[01:19:38] And that’s how things always work, it’s for example, you. You take a pill and it causes side effects. So your doctor gives you another pill, which calls it another side effect. So now, eventually you’re taking 12 pills to counteract the side effect of every other pill. That’s the way the economy world works.

[01:19:54]we do have bad policy, whatever, and it causes a side effect. And then, a negative economic event. So then we Institute another policy to counteract the negative event that we just created. And then it expands on itself. We ended up where we’re at right now. We have a world where, everything is just completely distorted and makes no sense.

[01:20:16] And we keep throwing on new solutions for all the. The other economic problems that we’ve created and, that’s one of the issues that I see with the economic world.

[01:20:28]Jonathan Doyle: [01:20:28] do you see a future where, gold was. Banned for private citizens from, I think what 33 to 74 is that right? 1933 to 1974.

[01:20:40] Mike Kendall: [01:20:40] yeah, that’s correct. In the us.

[01:20:42] Jonathan Doyle: [01:20:42] Can you see that? Could you see that happening again?

[01:20:46]Mike Kendall: [01:20:46] anything’s possible. we’re looking at, locking people into their homes and forcing vaccinations in the healthy people. So I think, anything’s possible these days. again, One of the things that happens is 1933 is there’s been, huge advances in education and learning and looking at history and seeing how things work and people aren’t necessarily, satisfied to go back to old things that.

[01:21:12] They didn’t like previously, it’s much more difficult for the government to ban gold now than I think it was in 1933. So whether they may attempt to, I think it’s entirely possible, they could do it under the ages of some crisis, which certainly could occur. And, so I think that’s a possibility, but I think.

[01:21:34] Anything really is a possibility right now. It’s hard to see where we’re, things may go in the immediate future.

[01:21:39] Jonathan Doyle: [01:21:39] to ask you something you mentioned a moment ago. Can you help us understand the relationship between or how you’re calculating the optimum price of gold and its relationship to the spot price? I was interested when you talked about that.

[01:21:52] Mike Kendall: [01:21:52] Yeah. Yeah. That’s another, interesting concept that most people don’t get because when they look at gold, they only look at the spot price at goal. But think about it when you’re on a gold standard, say Bretton woods for $35 an ounce, the price level, adjust to that stable value. And there’s an optimum price of gold.

[01:22:12] That’s. Completely identical to the spot price of gold because the price level is stable and it doesn’t change. Now. Fast forward to 1971. Okay. Spot price of gold within a decade, went from $35 an ounce. To $825 an ounce before it fell back down to the two hundreds and eventually stabilize it three 50.

[01:22:36] Okay. That was the spot price of gold. Now the ultimum the price level is based on contracts. we have employment contracts, we have wage contracts. We have bonds that are issued. They’re all issued under the terms of stable money based on $35 price of gold. So they have to unwind right. For that price level to start moving up.

[01:22:59] To wherever the new spot price of gold is. And that unwinding is what I call the duration of debt. I estimate, or I learned this from Jude Wanniski that at the end of Bretton woods, the duration of death and the mallet time, it took these bonds to unwind and then re. B reading negotiated at a new level based on how the price level has changed was like 25 years today because there’s less trust in the dollar because it’s been devalued so much.

[01:23:30] I estimate that duration of debt is about 10 years. an interesting point from that book I talk about when money dies is at the height of why more inflation, somebody could go in and order lunch. At a certain price. And by the time it came out and had paid for it, the price had changed because their duration of debt was, 30 minutes.

[01:23:54] That’s how bad the, the instability of their currency was in places like Mexico, F constant, peso, devaluation, they have much smaller duration of debts. And our duration of debt is decreasing right now also. So when I talk about the optimum price level, I’m talking about. How contracts wages, everything on wines based on this duration of debt in readjust to a new price level based on the spot price.

[01:24:21] So when you, when you started in 1970, one $35 an ounce, and then Greenspan came along and restabilize the dollar gold price at $350 an ounce, we got a new, eventually those. contracts, unwounded got read negotiated three 50 and we had a new optimized, optimum, gold price in line with the spot gold price, which was around three 50, but it took about 25 years for that to happen.

[01:24:54] It didn’t finally catch up till about nine in the early 1990s. And that’s only because Greenspan kept the price of gold stable. today we don’t have a stable price of gold, 

[01:25:06] Jonathan Doyle: [01:25:06] have you written on this, on your website?

[01:25:09] Mike Kendall: [01:25:09] Yeah, extensively. It’s I’ve I’ve got, my website. If you go on the right hand column, there’s a category, Designation and I’ve got listed, for example, cryptocurrency, you can not, one of my categories is understanding gold. And if you go, if you click on that, all my posts that come up explaining gold, which talks about all this, you’ll find on that category, but I’ve talked about it quite a bit.

[01:25:35]Jonathan Doyle: [01:25:35] those of us were interested in the supply side. It’s just interesting. What we, the lengths we go to read and the polar X, Jude’s website and the SSU stuff like, yeah. I just, people have all sorts of interesting hobbies. Mine lately has been to restart reading through these back catalogs of, of your stuff and Nathan’s, and Jude’s, it’s, it’s fantastic that stuff’s available.

[01:25:58] Mike Kendall: [01:25:58] let me make this comment about Jude. I was a client of his from 1993 until he, he died in 2006. So weekly, he was a prolific writer. I got all kinds of stuff, client letters, everything. So during this whole time period, when I was learning economics, I would, everything Jude wrote, I would look at it in hindsight.

[01:26:23] And say, and try to find errors, where he got something wrong, where he missed something, where it didn’t work out. Like he said, the entire time I could never, the only minor thing I ever found was he was worried about Y2K. He thought it might have a big impact on the economics, but it, but he only worried about it.

[01:26:42] He didn’t say this is going to happen, but all his economic forecasting, all his prediction, everything. He talked about how he analyzed the economy. I could never find error. Not once. And when you look at our, people predicting economics today, Larry Summers with, secular stagnation, all the nonsense that comes out, they could, they couldn’t predict their way out of a paper bag, because their model has no.

[01:27:10] Foundational basis for the economic world. So that was one of the things I understood when I got into my process of trying to work my way through his archives that, yeah, I didn’t have to go somewhere else. I didn’t have to all look to this person, looked at that person. Because I had been a client for a long time.

[01:27:30] I had seen the efficacy of his, his model and how he, he analyzed it. And I knew that, if I could comprehend this model, then. The same efficacy would work for me. And, and so that’s kinda how this evolved for me. and I know that when I started, do you want to look everywhere? you want to go look to see what this person has, see what this person has say, see what this person has to say.

[01:27:56] And at some point you start getting some confusion, because everybody’s saying. Something different and you can’t sort it out, what’s true. What’s not true. I had the benefit of being a client and being able to look for 13 years for any era in an economic model and never found any.

[01:28:12] So I basically, I stuck with that.

[01:28:16] Jonathan Doyle: [01:28:16] so here’s the big question. We are not offering financial advice to anybody, but, I asked Nathan this, where do you see the gold price going?

[01:28:27]Mike Kendall: [01:28:27] the one thing about gold that you have to understand is it’s a function of how the fed works and what the fed does and all the other factors that affect the demand for dollars. Okay. And, so in the near term, I can’t say we’re, we could have another economic crisis. I think that’s very realistic.

[01:28:53]the price of gold could collapse with the economic crisis because that’s what happened in 2008. That’s what happened.

[01:29:00] Jonathan Doyle: [01:29:00] there was just so much stimulus. So people figured out 

[01:29:04] Mike Kendall: [01:29:04] in 2008, there wasn’t the stimulus, but what happened was. okay. In 2008, there was a cert the say that there was a certain supply of, of dollars in a certain demand, And then 2008 happened, let’s say they were an equilibrium at $1,000 an ounce in 2008, then the financial crisis happened.

[01:29:25] All right. The whole world during that financial crisis was demanding dollars. Okay, because everything was collapsing, they needed dollars to stay solvent. So there was a huge demand for dollars. the price of gold is determined by the intersection of the supply and demand for dollars. The supply didn’t increase, the demand, increased it.

[01:29:46] So the price of gold fell, which is the opposite of inflation, but it was temporary. As soon as the fed started QE. In other words, increasing the supply as soon as a demand stabilized because people were, stabilizing their solvency and everything. Then supply outstrip demand, and you saw the price of gold start rising, which it did until 2011, up to $1,900 an ounce.

[01:30:13] Jonathan Doyle: [01:30:13] So back to that other

[01:30:15] Mike Kendall: [01:30:15] But to get, I’m sorry to get back to your question. Where do I see gold going? I don’t know if that realistic, I don’t think you can say anything, but the fed has to continue to devalue. we’ve been on a feedlot system since 1971 and what’s happened. We’ve gone from 35,000 or $35 an ounce.

[01:30:33] So up to almost 2000, what’s going to change in the future. we talked about it. You talked about with Nathan, the fed is trapped in this cycle where it has to keep printing the money to keep things going. So I w I can’t predict an exact price, but I can predict that if you get into gold and some correction at a good price, it’s going to go up.

[01:31:00] So 

[01:31:01] Jonathan Doyle: [01:31:01] to wrap up, as you look at this current moment, the MMT COVID do you, is your gut feeling that we’re heading for a precipice in terms of something dramatic, a huge correction hyperinflation, or do you see us just limping along like this for the foreseeable future?

[01:31:22]Mike Kendall: [01:31:22] yeah, it’s a fascinating time. We’re actually in a point of history that there’s no precedent for, so most of the times. like the seventies inflationary, you can go back to other inflationary periods and say, this is what happens when you have inflation. we’ve never had a period like this, where you’ve all of a sudden have a pandemic that is instigating, global authoritarian control and, all these economic forces at work in a digital economy that’s, coming on the rise and that can change everything.

[01:31:59]yeah, I don’t know. I just, I find it an interesting time, what of the, one of the things that is true of history is sometimes somebody of great import steps out of the shadows and, changes the world, and, some people might think Trump’s that person. I don’t know if I’d go there, but we’ll see what happens.

[01:32:16]he possibly could, he certainly, reinvented a populous movement in the world in the same way that Reagan, invented a, economic movement in the world of stable money and low taxes. 

[01:32:26] Jonathan Doyle: [01:32:26] it true that

[01:32:27] Mike Kendall: [01:32:27] so we can only look.

[01:32:29] Jonathan Doyle: [01:32:29] that Trump, out or encouraged huge amounts of money printing as well? Like the broad idea was that he would not have done that, but he, the amount of stimulus and QA and stuff under his watch was, there were the tax cuts, but he wasn’t exactly, an abstemious, or, stare at econ guy.

[01:32:47] Right.

[01:32:49]Mike Kendall: [01:32:49] exactly, he actually campaigned on, Hey, a gold standard might be a good idea. they worked well in the past. And then of course, as soon as he got there and the fed started normalizing and then stock market industry started falling, it was all about, lower interest rates and get more money into the system and everything.

[01:33:06]but then again, he points, Judy Shelton, I, one of the premier. gold proponents in, in our country to the federal reserve board. for me, it’s hard to, it’s hard to tell where Trump’s at, where he’s going, what he actually believes in. we’ll just have to see.

[01:33:21] Jonathan Doyle: [01:33:21] a president Biden, you just see. Business as usual, you just see?

[01:33:26]Mike Kendall: [01:33:26] yeah, I just see, a, another puppet for the, I don’t even think, I think he has cognitive issues that he’ll very early drop out and we’ll have a president Harris if it comes to that. And and she doesn’t have original thought or idea about anything. So she’s, wherever they want to take us with Harris, that’s where we’re going to go.

[01:33:47] Jonathan Doyle: [01:33:47] Just that all Chinese proverb, may you live in interesting times? It’s, I read Plutarch and, each night I’ve been reading his Roman lives. And one of his quotes was that the greatest cause of suffering and empires is the gap between the rich and the poor. And, I’m not arguing for a quality of outcome, but.

[01:34:09] This stuff is helping me say that when a system gets imbalanced to this degree, then the social cohesion that holds us together, it comes under enormous pressure.

[01:34:21]Mike Kendall: [01:34:21] see, that’s the great thing of America, besides our. Our mineral rights are property rights, all the, our rights and shrined in the constitution. in the period, we had stable money, which was most of our history up until 1971. We developed a huge, strong, vibrant middle class. And it’s the middle class that competes with the upper-class and creates all the progress in the wealth of the country.

[01:34:45]we’re seeing that middle-class decimated right now. if you look at the goals of the great reset is basically an elitist, a very small elitist globalist class, and whoever’s left, serving them. And the, and that’s the way it is the most third world countries. You have a ruling governing class and everybody else is poor and there’s no middle class.

[01:35:06] And if that happens, America, we wipe out the middle class. Then we’re basically a third world nation.

[01:35:12] Jonathan Doyle: [01:35:12] so to finish up, what’s next for you? What areas of reading inquiry? what’s getting your interest at the moment. What’s next,

[01:35:21]Mike Kendall: [01:35:21] I’m fascinated by you coming out of the woodwork. you sent me an email and, I ignored it cause I’ve had some bad emails, but, once I realized, Who you were and what you wanted to do. I can’t tell you how wonderful I think this series that you’re promoting and creating is.

[01:35:39] And I literally think, it could change the world, this type of thing. This is how, small events started in, spiral into great events. it’s very positive that you did this and this, this is what, I’m, what I’m seeing happening around the world. People are starting to stand up, but they’re starting to realize that things aren’t right.

[01:35:58] And they’re coming to their own ways to deal with it, and you, are new to learning this, but you’re running a podcast on it, And a fantastic job. And, I can see, I could see this taking off, and everybody wanting to do a podcast with you because it’s, the first one was really good.

[01:36:16] And hopefully you can somehow make this one. Good.

[01:36:18]Jonathan Doyle: [01:36:18] I, you may have heard this in the last week’s episode, but I think I was listening to an audio book from George Gilder and cause I’ve run ultra marathons. I was, it was about 4:30 AM. It was seven degrees below zero and I was running and. I just heard, he mentioned your name and, in the audio book.

[01:36:36] And I thought I said interesting and I tried to hold it in my head cause I was like, 35 Ks into a run. I thought, I hope I can remember that guy’s name. And then I looked drop and, it went from there. So look, it’s great to be doing this. I think. For me, I just have a couple of basic beliefs.

[01:36:52] I think there’s an incredible inherent dignity in work and in creating goods and services that people want. I think that when we lose that as a culture, then. w it’s a really bad thing. and yeah, and I think I’m a kind of, I think, rights to privacy and minimum minimal intervention from governments.

[01:37:13] A good thing. I think I’m pretty convinced of that, that we need to have some freedom, to pursue our lives. Keeping the social contract of course, and seeking to do good. But, yeah, just those things interests me. I

[01:37:26]Mike Kendall: [01:37:26] I think that’s where. some 90% of the populations that now they may be different ideas on how to achieve it. But, every human being is born with an inherent desire for Liberty, nobody’s born, it wants to be enslaved. I wouldn’t think there might be a few, but in general, we’re all have the same makeup.

[01:37:46]we desire Liberty. we desire freedom. And that’s, the conflict that’s coming is how this inherent Liberty is going to be dealt with between the populace and the governing. And

[01:37:56]Jonathan Doyle: [01:37:56] we had, 

[01:37:57] Mike Kendall: [01:37:57] we’ll see how this plays

[01:37:58] Jonathan Doyle: [01:37:58] we had a bunch of people I’ve my birthday last Sunday. And one of them is a Senator. And, and there was a robust conversation at some point during lunch. And somebody was asking about the difference between. political factions and some of the forces we’re seeing in the world.

[01:38:14] And I, I don’t remember where I got this. I’ll have to remember where this mess of principle came to me from. It’s not my own, but the point was that the fundamental tension in culture at the moment is between freedom and control that the global forces, if you had to be reductionist you’d say that there’s an impulse for freedom and.

[01:38:38] This seems to be a drive towards centralism and control and how those forces resolve in the next decade aside is going to be very interesting, right? Yeah.

[01:38:48] Mike Kendall: [01:38:48] exactly. Exactly. I agree with that. and we’re seeing it play out in real time, And 

[01:38:53] Jonathan Doyle: [01:38:53] boredom. Boredom will

[01:38:55] Mike Kendall: [01:38:55] we’ll see what happens.

[01:38:56]Jonathan Doyle: [01:38:56] I want to thank you for joining us from Dallas, Texas in the evening. It’s about two o’clock here in Australia. And, what have I got ahead of me? School pickups? Like I said before, we got kids soccer. this evening. For my many sins, I get to stand on the sideline in the wind and cheer on a bunch of ten-year-olds running in the wrong direction.

[01:39:14] So it’s, it’s going to be a busy afternoon, but Mike, listen, I want to thank you. I want to thank you for making time for us today. And, I know people are going to get a great deal out of what you’ve shared with us, and I’m going to be listening to this. Again myself, just to go deeper on what you’ve said, we’re going to direct everybody to man on the margin.com.

[01:39:33] You got to go check out Mike’s blog. He writes brilliantly. There is just a huge archive there. So join me down the rabbit hole of, the great stuff that Mike’s sharing with us. So once again, Mike, thanks so much for joining us on the supply side podcast.

[01:39:49] Mike Kendall: [01:39:49] thank you, Jonathan.

[01:39:52]Track 4: [01:39:52] Hey everybody, Jonathan, with you again, I really hoped you enjoyed that special discussion with the one and only Mike at Kendall. I know it’s going to be one of those interviews that I’ll be listening to several times, Mike and I both have a great shared passion for cycling. And I just love listening to these kinds of interviews, because I think that the more you listen to them, you just find new insights and depth.

[01:40:15] Especially when you’re listening to somebody like Mike, who similar to Nathan is what Mike doesn’t know. About these topics may not have been written. He’s, he’s gone deep and I want you to head across to his blog@manonthemargin.com man, on the margin.com. Make sure you subscribe, sign up for his list because he’s putting out some great stuff on a regular basis.

[01:40:37] Really interesting topics, check out some of the archives. I think he’s got so much to teach us on these topics around the optimum price of gold price signal. The, the level of knowledge that he has, I think is going to be really important for many of us in this challenging moment of global macro, what do we say?

[01:40:57] Upheaval tumultuous. Nearness. Is that a word? It is now. It’s definitely interesting times. So I think having people like Mike doing this kind of thinking and research is a huge blessing to all of us. for me here at the supply side podcast, please make sure that you’ve subscribed to the show. give it a rating at a comment.

[01:41:16] That’s a huge help to us, but obviously the most important thing you can do to help us gain traction is to just grab the link, reveal this into this incentive, to some like minded people who have an interest in global macro hard money, low taxes, gold standards, all the things that we do come to believe can help, political economy and a wider culture to flourish.

[01:41:38] All right, that’s it for me. We’re going to have another fantastic interview next week. We’re going to bring you another great guest. That’s going to take us deeper on this journey of the things that actually work, not the theories that might work, the theories that actually work. That’s what we’re all about here at the supply side podcast.

[01:41:54] My name’s Jonathan Doyle, and we’re going to have another episode for you next week.

Recent Comments


  1. Faisal Iqbal

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  2. Edmund Adamus

    Thank you for an extraordinary and far reaching conversation. I have always sensed that the way the world works vis a vis money and power and the economy isn’t quite right and why most people tend to just feel like cogs in a machine rather than living fulfilling and inherently dignified lives and that includes even those whose financial positions are relatively secure. The warnings are clear – if we want avoid sleepwalking in to a neo-feudal technocratic existence we have to start challenging the way the world works now – one soul at a time, one injustice at a time.

    • jonathan doyle

      Thanks Edmund. Great comments. There is definitely a clear sense that this moment in financial history is different in both kind and degree.


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